Dalata revenues rise 6% in H1 but softer trading hits profits

Dalata has announced that revenues rose by 6% to €302.3m (£254.8m) in the first half of the year, but pre-tax profits fell by 15% to €35.8m (£30.2m) as trading was softer than expected over the period.The group attributed its profit decline to the like-for-like performance at its hotels, as like-for-like RevPAR was down by 1% to €108.57 (£91.5m), while occupancy fell from 78.4% to 77.6%. Nonetheless, its board declared an interim dividend of 4.1 cents per share, up by 2.5% against the prior year. It also announced a €30m (£25.3m) share buy-back, which the board said was launched in light of the group’s cash generation and strong balance sheet. In its latest update, the group said its UK footprint now exceeds 5,000 rooms, up by 20% since 31 December 2023. This includes four new UK Maldron hotels that opened this summer, and three leasehold hotels in Manchester, Liverpool and Brighton. Dalata also has four projects in progress, primarily in the UK, representing an additional 700 rooms. For July and August, like-for-like RevPAR was 1% ahead of 2023 levels, but trade was lower than expected particularly as a result of “more measured” consumer spending. The group said that demand from corporate and international visitors remains strong, but it is seeing a softening from more “cost conscious” domestic customers relative to last year. Nonetheless, it has continued to see periods of good leisure demand around events. Dermot Crowley, Dalata Hotel Group CEO, said: “Trading has been softer than we expected of late and there is a return to a more measured domestic customer spending behaviour in Ireland and the UK. “At Dalata, we are focused on creating long-term value for our shareholders through careful evaluation and balancing of capital allocation considerations. With this foremost in our minds, we believe that now is the right time to buy back some of our shares.” He added: “We continue to deliver on our ambitious growth strategy, having successfully opened four new hotels in the UK between May and August. I am very proud of the results we have achieved to date which evidence our ability to deliver growth in the UK market, having expanded our UK portfolio from 11 to 22 hotels within three years. “As I look ahead, I remain very confident on Dalata’s future growth prospects as we continue to deliver on our stated growth strategy, becoming a key four-star market player in targeted locations. While the quantum and timing of hotel investments vary from year to year, I am excited by the opportunities we are currently considering. Alongside its half-year results, Dalata announced that corporate development director Shane Casserly has been appointed as deputy CEO with immediate effect. He joined Dalata in March 2014 as head of Strategy and Development and was appointed to the board as corporate development director in January 2020. In addition, COO Des McCann will be appointed to the board with effect from 1st January 2025. McCann joined the group in 2011, and held GM positions at several hotels before he was appointed group general manager of Clayton Hotels in Ireland in November 2018. In January 2022, he was appointed COO.