Dalata first half revenues jump 31% sending earnings forecast up to €8m

A better-than-expected first half performance has led the Dalata Hotel Group to forecast full-year earnings of €7.5m to €8m for 2014.

Dalata first half revenues jump 31% sending earnings forecast up to €8m

The company — which owns the Maldron chain of three and four-star hotels — yesterday reported a 31% annualised increase in first-half revenues to €34.9m, with earnings before interest, tax, depreciation and amortisation rising from €900,000 to €2.4m.

Group chief executive Pat McCann said the performance was “much stronger than anticipated” and that while the second half of the year will always yield stronger profits than the first, the gap is narrowing, with the first six months now accounting for roughly 30% of Dalata’s profitability.

The full-year earnings forecast excludes recent and future acquisition costs.

The group’s first half revenue increase was driven mainly by additional management contracts and taking over the leases of hotels in Tallaght and at Dublin Airport.

Dalata’s portfolio currently runs to 39 hotels; only 12 of which are in Dublin.

However, most of the company’s growth has been coming from the capital, where it has just seen the fourth year of growth.

It said that the Cork, Galway and Belfast markets are all returning to growth, but there remains an over-supply problem in Limerick.

While Dalata itself is looking to purchase another 25 or so hotels in the next two-to-three years, its management is expecting to see total Irish hotel sector transactions this year amount to almost €1bn in value; both through conventional property acquisitions and the purchase of portfolios and loans from the likes of Nama, the IBRC and Ulster Bank.

Dalata’s business will continue to be spread across owned properties, lease agreements and management agreements (either with owners or receivers).

The company said the owned aspect of that will grow in the coming years, while the managed agreements portfolio will lighten.

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