North East hospitality company Cairn Group has posted record results with turnover topping £100m for the first time - beating pre-pandemic levels.
The Newcastle based leisure property owner and developer – which owns the Station Hotel in Newcastle – has toasted a rapid return to profitability, after a successful year of trading saw turnover jump from £34.1m to £109.4m in the year ended April 2022.
The group now owns and runs 32 hotels and a string of bars and restaurants across the region and beyond, including Elmbrook Hotel and Cairn Hotel in Edinburgh, Newcastle’s Royal Station Hotel, Redworth Hall and Spa near Newton Aycliffe, the Hilton Doubletree near Newcastle Airport and the popular Sohe, Spy Bar and Jalou bars in Newcastle.
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The increase marks a record sales figure, topping even pre-pandemic levels in 2019 when it brought in turnover of £96.5m, and more than double the £44.6m it recorded in 2015. The company also returned to profit, converting last year’s operating loss of £7.5m, to £16.4m. The overall profit for the year came in at £2.2m, on contrast to last year’s loss of £10.4m.
Its workforce grew substantially over the year too, increasing from 1,710 to 2,124 employees. In line with the longer term aims of the group, last September it sold two properties yielding a profit on disposal of £16.4m. The group also has made bank loan repayments of £50.13m since the year-end, reducing the outstanding bank debt to £139m.
Cairn Group’s business model involves purchasing and developing leisure properties, principally hotels, across the UK, and then reinvesting profits to maintain and improve standards across the portfolio.
Having paused all development activity in the pandemic, the firm last year announced it was restarting its investment programme. In latest accounts the directors say they are now looking to make additions to the portfolio.
In a report accompanying the accounts, the directors said: “The results for the year represent a significant improvement and recovery following the impacts of the main disruptive periods of the Covid-19 pandemic. The directors are pleased with the results for the year and would like to take this opportunity to thank all the employees of the group for their dedication and hard work. The results are based around a core of key high performing assets along with the ongoing investment programme, affecting various properties each year.
“While a property’s turnover and Ebitda is reduced during both the period of refurbishment and during the initial period of relaunch (which together can span more than one financial year), such investments yield medium and long-term value. Further, the directors continue to look for new properties which will fit in to their existing portfolio.
“The recovery from the impacts of Covid-19 lockdowns and restrictions in 2020 and early 2021 has been quicker and more remarkable than was expected at the beginning of the financial year. The opportunity was taken to holistically reconsider business models at every hospitality venue, and initiatives and programmes implemented to deliver value for guests against a more efficient cost base have ensured the group’s current performance and position is ahead of all expectations.”
Cairn CFO and managing director Richard Warren added: “I’m delighted by the results for last year, and to date in the current year. This time last year we stated that we were investing in the in-house sales and marketing team, and further development of leadership and management skills at all levels, and that has worked and will continue. Investment in the properties is ongoing and very important, but ultimately it’s the people that deliver it – our people are vital and we are grateful to them all for their efforts.”
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