Dalata shares surge 8% as it eyes UK expansion

Shares in Dalata Hotel Group have risen almost 8% as it reports an 80% rise in half-year, pre-tax profits of almost €33m.

Dalata shares surge 8% as it eyes UK expansion

Dalata said it was eyeing more expansion in the UK’s major cities as its six-month revenues to the end of June increased by more than 24% to €161.8m.

Earnings before interest, taxes, depreciation and amortisation amounted to just under €45m, an increase of 27%.

The firm, which owns the Clayton and Maldron chains and is the largest hotel operator in Ireland, said its hotels in Ireland and the UK had performed strongly. Revenue per average room grew almost 10%.

Dalata said it had agreed to lease a new Clayton hotel to be built in the centre of Manchester with 300 rooms, but ruled out a move for the Gibson Hotel in Dublin, of which it is a tenant.

Deputy chief executive Dermot Crowley said the group was focusing on the UK for “further opportunities” in the hotel market, but ruled out a move into the rest of Europe for now.

“For now we are focused on the UK. We are always planning four or five years ahead but would we look at something in Europe in time? We probably would. We would look at countries that best suit us but it’s not for today or tomorrow,” he said.

He said that Dalata wanted to continue as a tenant at the Gibson Hotel, which went on the market for €87m last week.

“We want to stay on as a tenant at the Gibson Hotel. A number of potential purchasers have spoken to us about potentially renegotiating the lease. We’re a very interested bystander in that process but we won’t be bidding for it,” he said.

Mr Crowley said an increase in air routes to the US has boosted its Dublin and regional performances.

He said that the drop in guests from the UK had been offset by an increase in US and European visitors, as well as a strong domestic take-up.

“Access is really important for the hotel industry so when you get new routes into Dublin or Cork, you see the impact of visitors. The UK is important to us, the US is important to us, but Europe is growing. We have more European guests than North American at this stage,” he said.

Mr Crowley said Dalata would not become complacent in its domestic market on the back of the latest results.

“One thing we will never get is complacent. We monitor it all the time. What we have done differently than the competition is that we have a higher percentage of tour groups, which is coach-based tours.

That gives us better occupancy at lower rates. We also would have a higher percentage of the corporate negotiated business with the likes of Google and Microsoft in Dublin and your Apples and EMC Dells in Cork. That may be at lower rates but it gives you year-round business,” he said.

Cork was crucial to Dalata’s regional business, he said. “The Oliver Plunkett St and South Mall area is thriving along and we will be appointing a contractor next month for the Maldron at Beasley St.

“We expect construction to start in late October or early November with the view to opening in late 2018.

“That will be one of the most central hotels in the city,” he said.

The hotel was bought by Dalata for €10.2m in early 2016. It will become the third biggest in the city centre with 165 bedrooms.

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