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Crieff Hydro reports steady performance as Peebles revival plan kicks in

Crieff Hydro
Crieff Hydro, Scotland's oldest registered trading company, has released its 148th annual set of accounts for the year ended 29 February 2016.
In addition to the results for Crieff Hydro Limited (Crieff Hydro Hotel and the Murraypark Hotel), the accounts include the results of Peebles Hydro Limited (Peebles Hydro Hotel and The Park) and its management company.

They show a steady performance against tough trading conditions for the sector generally. Significant investment has continued, with £1.8 million spent in the Peebles hotels and £900,000 in the Crieff hotels.

A strong performance in Crieff combined with a year of transition for the Peebles hotels resulted in consolidated revenue of £24.3 million and profit before tax of £265,048.

Stephen Leckie, CEO of Crieff Hydro, said: "This was a tough year for the industry generally with the shrinking of the oil and gas sector, which may seem a long time ago now, impacting on conferencing business and the strength of the pound.

"Despite this, Crieff Hydro and Murraypark delivered revenues of £19.9 million and an operating profit up 6% on last year of £877,554. This was achieved through a targeted marketing campaign and focussed cost control as we knew from the start that Peebles would not be contributing this financial year. Our guest reviews for the Crieff hotels remain consistently high and are still on an upward trend. Over the last couple of years the percentage of guests rating their stay as "Excellent" has increased by 11% based on over 3000 reviews on Trip Advisor.

"Alongside our rolling bedroom and public areas investment programme, this year we installed improved guest wifi and a new property management system to make it easier for guests to reserve the 63 activities available on site at the same time as booking rooms."

Revenue for the Peebles Hotels was £4.2 million, down 3.7% on last year. Explaining the reasons behind it, Stephen continued: "In Peebles, this was a year of transition. Both hotels were closed for a combined period of 17 weeks at the start of 2016 to refurbish their public areas, resulting in a creative new look and feel but with an impact on revenue. We've also been refurbishing bedrooms at Peebles Hydro with nearly half now benefiting from a complete makeover and we're doing many more in the coming year.

"Behind the scenes we've invested significantly to modernise and improve the heating, water supply, electrics and fire alarm system. We've also installed a new biomass boiler to replace the steam powered museum piece that's been there for many years and also reduce our impact on the environment. This has taken its toll on profits, resulting in an operating loss of £703,821.

"So what are we doing about it? New menus, bars and activities are now in place at both Peebles properties - including a tempting Gin Palace offering over 100 varieties - and we plan to invest a further £1.1 million this year, mainly on bedrooms and public areas. We always knew we were investing for the long term when we bought the two hotels in 2014 and remain confident they'll prove to be an excellent long-term acquisition. Indeed, this year is looking good and our future bookings pipeline is encouraging too."

Freedom Hotels (Management) Limited received management fees for The Yorkshire Hotel in Harrogate, The Ballachulish Hotel, The Isles of Glencoe Hotel, and The Oban Caledonian Hotel. Crieff Hydro bought The Ballachulish Hotel and The Isles of Glencoe Hotel in June 2016 and The Oban Caledonian Hotel was sold to new owners in September 2016.

Stephen continued: "We were delighted when the opportunity to buy the hotels came our way given that we've been running them for two years now and can see their potential. Revenues are up this year despite very little capital investment over recent years and we're excited about the prospect of owning and investing in them.

"This is a business full of potential anchored by the stability of Crieff Hydro and these results paint that picture. We're settling into being a larger and more complex business and it's not without its challenges but the great people I have throughout the business makes me confident and optimistic we can fulfil the potential of the fantastic and unique hotels we now own and manage."

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