Elegant Hotels posts drop in revenue but remains committed to expansion strategy

17th Jan 2017 08:04

(ShareCast News) - Elegant Hotels Group, the owner of six hotels and a beachfront restaurant in Barbados, reported a fall in revenue due "challenging market conditions" in the luxury hotel industry but said it remains committed to its expansion strategy. The AIM-listed company said acquisitions and management agreements on hotels in Barbados and in other parts of the Caribbean will be key to its long-term growth.During the year, it bought Waves Hotel & Spa for $18m and signed a management contract for Hodges Bay Resort & Spa in Antigua, its first property outside Barbados.Revenue dropped 5.2% for the year ended 31 December 2016 to $57m compared to the previous year, due to a fall in demand in the second half, which the company attributed to a weak sterling against the dollar.Revenue per available room fell 6.7% to $238, while average daily rates for a room increased 1.3% to $378, with occupancy falling by 5.5 percentage points to 62.9%.Chief executive Sunil Chatrani said: "Against a backdrop of challenging market conditions, the group has delivered a solid performance and made good progress in key areas during the year."Despite the current challenges that the group and the wider Barbados luxury hotel market are facing, we continue to be confident in our long term growth prospects and remain committed to our expansion strategy in both Barbados and across other parts of the Caribbean."Adjusted earnings before interest, tax, depreciation and amortisation fell 11.6% to $19.6m, and adjusted operating profit was down 14.5% to $16.3m.During periods of high demand, the company has managed yields by maintaining headline prices and reducing discounts, and it was able to hold its rates during the peak winter trading months as demand for luxury holidays in Barbados held up.Earnings per share decreased to 13.1 cents from 14.7 cents and the company declared a final dividend of 3.6p per share, resulting in a full year dividend of 7p.Its year-end net debt expanded to $61.8m from $40.8m.The shares were down 1.4% to 79.65p at 1447 GMT.