A turnaround in UK and US operations boosted results at Jurys Doyle over the first half, but growth was held back by continued sluggish trading in the firm's Irish four-star hotels.
The mixed performance saw pre-tax profits rising by 1.5 per cent to €21.96 million, while turnover climbed by 9.1 per cent to €135 million.
Jurys chairman, Mr Richard Hooper, described the performance as "satisfactory", and flagged a similar performance in the second half "in the absence of any external shocks".
He said Jurys would pay an interim dividend of 8.4 per cent, which is 3 per cent ahead of the first half of 2003. The market failed to be impressed however, with Jurys shares ending the day 30 cents weaker at €10.25.
The negative reaction came on the back of what Mr Hooper described as the "subdued" performance of the hotel group's three four-star properties in the Republic. These hotels - Cork, Jurys Ballsbridge and The Burlington - saw profits fall back by 24 per cent over the six months to the end of June.
This came as the firm's Irish five-stars held profits steady and US hotels saw profits rise by 30 per cent. London hotels also put in a solid half, with profits ahead by 29 per cent, while the Jurys Inn chain posted a similar increase.
Jurys chief executive, Mr Pat McCann, said that while the group was moving away from a "perceived" dependence on its Irish properties, it would be taking steps to address the decline in Irish four-star profits.
He said the properties had been hit by higher costs for staff and utilities, with an increasing customer focus on value eating into rates.
He said the firm would be concentrating on cost management over coming months, while also considering how it might draw better value from the sites occupied by the hotels in question.
"We're working on a number of projects which hopefully will bear fruit over the next number of months," said Mr McCann.
The firm has already decided to demolish and rebuild its Cork property in conjunction with O'Callaghan Properties and Bowen Construction.
Under a sale and leaseback deal, which is subject to planning permission, the site would accommodate the construction of 300 new apartments.
This would see the hotel closing between February 2005 and late 2006, affecting about 110 full-time staff. The workers are expected to be offered redundancy, early retirement or relocation.
Mr McCann said Jurys was preparing to consider investments elsewhere too, having spent some €400 million on development initiatives over the past four years.
A similar sum will be spent over the coming years, he suggested, with the construction of a four-star hotel at Croke Park in Dublin among current projects.
A Jurys Inn is due to open at Heathrow Airport in November, and the group expects its Inns chain to grow to 19 properties by 2005.
Mr McCann said Jurys had very strong cashflow for investment purposes. As well as developing new sites, the firm is considering acquiring four-star properties in London, he added.
Expansion could also bring the group to central and eastern Europe within the next three years, Mr McCann suggested.
