MF Wells (Hotels), one of Scotland’s biggest independent tour operators, surged back into the black at the operating level and said it was planning to build a new £8 million hotel by Loch Long, defying what its directors described as a “challenging year”.
The Dunbartonshire-based, family-owned company, which trades as Lochs and Glens Holidays and already operates six hotels across Scotland, posted operating profits of £2.2m for the year to the end of March 2009, compared with a loss of £104,115 last time.
Neil Wells, the group’s managing director, told The Herald: “Trading has been very good, despite the recession. We have always been price-conscious, but in the last couple of years we have kept them as keen as we can, and that seems to have paid off.
“I think the key is that we have built up a large and loyal customer base, and they keep coming back for more. Loyalty is crucial in tough economic times.”
Pre-tax profits at the company came in at £2.4m, compared with £236,223 the previous year.
However, Wells said: “The downturn in the economy and the increase in the costs of fuel and food made this a challenging year for the hotel sector.”
Nonetheless, MF Wells also benefited from a $1.1m tax break from a change in legislation related to the hotels building allowance.
The company’s hotels are the Loch Long and the Inversnaid, near Loch Lomond, the Loch Achray in the Trossachs, the Loch Awe Hotel, the Loch Tummel, near Pitlochry, and the Highland Hotel in Fort William, in which the company recently invested around £3.5m after buying it in the Swallow group break-up.
Turnover at the group climbed 11% to £19m, compared with £17m the year before. Wells said the turnover rise was the result of the “extra capacity provided by a full year of trade at the Highland Hotel and from the reduction in reburbishment expenditure”.
He also said the company’s planned new hotel at Ardgartan, on the shores of Loch Long, was going through the planning process but he expects to break ground on its construction early next year , with a schedule to open in 2011.
Wells said the £3.2m dividend noted in the company’s accounts would be put toward the planned £8m investment at Ardgartan.