A huge jump in profits at Irish hotel group Dalata Hotel (DAL:AIM) sends shares in the £685 million cap up 4% to 372.3p.
Pre-tax profit leapt from €4.2 million to €28.5 million in 2015 while revenue surged 185% to €225.7 million, driven by higher room rates and its acquisition of 15 hotels in Ireland and the UK.
Group RevPAR (revenue per available room) increased by 21.4% as the company was able to take advantage of the uplift in the Irish hotel sector and increased consumer confidence in the domestic economy.
Dalata, one of Shares’ top stock picks for 2016, acquired nine Moran Bewley hotels in February 2015 and a further six hotels in Ireland and Northern Ireland. The integration of all 15 new hotels has occurred ahead of schedule.
Dalata says trading in the first two months of 2016 has been stronger than expected in Ireland and in line with expectations in the UK.
‘We do note the slowdown in the London market and the impact on our two London properties. However, the construction works at our Clayton Chiswick hotel are close to completion and we expect that property to make a significant contribution for the remainder of 2016,’ says chief executive Pat McCann.
Dalata is expected to announce new hotel build projects in the UK by mid-2016 and launch two hotels per year from 2018.
The shares have risen 57% in the past 12 months.