Trading at hotel group Dalata was "ahead of expectations" during the first quarter of the year the company said on Tuesday, as it expressed its interest in the impending sale of the former Jurys and Berkeley Court hotel sites in Dublin's Ballsbridge.
At the company's first agm as a public company in Dublin on Tuesday, chairman John Hennessy said that the markets in which it operates were strong in the first three months of the year, and the outlook remains positive.
“We are very satisfied with progress on integrating our acquired hotels into the group. First quarter trading was ahead of our expectations, an encouraging start to the year,” he said.
In a “transformational” year since its flotation on the Irish stock Exchange in March 2014, the company has acquired eight hotels in Belfast, Dublin, Derry, Galway and Wexford for € 106m in total, as well as the Moran Bewleys portfolio of nine hotels in Ireland and the UK for € 453m.
“ We have now invested all the equity raised at our IPO almost a year ahead of schedule, and we have also invested additional equity of € 48.6million (net of costs) and debt of € 282million raised in February,” Mr Hennessy said.
The group now has a portfolio of some 7,480 rooms across 46 hotels, some 45 per cent of which are in Dublin.
Speaking at the agm, chief executive Pat McCann said that the group’s portfolio of hotels under management, which currently numbers 18, will likely decline. Nine of these hotels are currently under the control of banks or receivers, so will likely be put on the market over the coming year or so.
He said that the hotel group would be interested in acquiring some - but not all - of those that may be put up for sale.
“Some of them we would; some are very fine assets and we would love to be part of it,” he said.
Ballsbridge site
With respect to the impending sale of Ireland’s most expensive development site, the high-profile landbank occupied by the Clyde Court and the Ballsbridge hotels in Dublin 4, Mr McCann said that Dalata is “absolutely” interested in the sale.
“We’d love to be involved,” he said, adding, “Our view is that there is definitely opportunity for a larger hotel on the site”.
Mr McCann was chief executive of the Jurys Doyle Hotel Group at the time of the sale of the site, for €375m, to Sean Dunne back in 2005.
The Dalata board will be setting out its strategy in May, which will include assessing how it can extract value from all the hotels it has acquired. Also on the agenda will be the company’s funding options.
“If we want to buy anything significant we will have to look at more equity,” Mr McCann said, noting that if you looked at the group’s balance sheet today, you wouldn’t see the capacity to do a big deal.
“But we have very supportive investors,” he added.
On the broader Irish market, Mr MrCann said that there are still opportunities - for now.
“By the end of 2015 we’ll have acquired all we need to acquire in the Irish market,” Mr McCann said, adding that the company will in time look to increase its presence across the Irish Sea.
Dalata currently has just under 1,600 rooms across nine hotels in the UK, and is preparing to broaden its reach in this significant market.
“We already have a strong foothold in the UK, and we’ll look more at it in the next phase of development,” Mr MrCann said.
Dalata will pay no dividend to shareholders in 2015, but Mr Hennessy said that the board is in favour of paying dividends “when the time comes”.
“As soon as it makes sense to pay dividends, we will do so,” he said.
