Crieff Hydro Ltd, Scotland’s oldest registered trading company has today released its 146th annual set of accounts for the year ended 28 February 2014, reporting a 6% growth in revenue from £17,713,775 to £18,845,916, with its core profitability before deduction of exceptional costs £663,615 – an increase of 4.8% on the previous year. The company say that the “overall growth has been driven by continued re-investment and focus in placing product, people, customers and responsibility at the heart of the business.”
Over the last twelve months the company has increased the number of rooms being operated from 236 in 2013 to 644. In addition, the company operates 55 self-catering units, representing a further 137 bedrooms.
The increase in rooms was due to the company pursuing a number of strategic opportunities in the course of the year. It secured a management agreement to operate four additional hotels. The Yorkshire Hotel in Harrogate (80 rooms); The Ballachulish Hotel (53 rooms); The Isles of Glencoe Hotel and Leisure Centre (59 rooms) and the Oban Caledonian Hotel (59 rooms) were incorporated under a wholly owned subsidiary company, Freedom Hotels (Management) Ltd.
Crieff Hydro Ltd also completed the purchase of all the shares of Peebles Hydro Limited (formerly The Peebles Hotel Hydropathic Limited) which owns and operates Peebles Hydro (132 rooms) and The Park Hotel in Peebles (25 rooms). Peebles Hydro Limited is also a wholly owned subsidiary company of Crieff Hydro Ltd.
Capital investment continued at Crieff Hydro in the year with a spend of £1,742,561. It opened a new family oriented food outlet, Piccolo, launched its aerial adventure course, Aloft!, and continued its rolling programme of bedroom and self-catering refurbishment and continued improvement in staff facilities.
Stephen Leckie, Chief Executive of Crieff Hydro said, “Crieff Hydro has undoubtedly had a milestone year and I’m delighted that our continued investment has resulted in a significant increase in revenue and a healthy dividend for our shareholders. However, there remains uncertainty and risk around the pace and trends in the wider economic recovery and there is no room for complacency. Although we are currently outperforming our competitive set in many areas, we will remain committed to controlling and reviewing our variable costs and improving efficiency to allow us to be flexible and responsive to changes in customer expectations, trends and events in the economic landscape. Our independence and our ability to remain nimble and flex with the environment is one of the key attributes of the company and one which currently sets the Crieff Hydro Family apart from most of our competitors.”
John Jennett, Managing Director of Crieff Hydro said, “Investment has been key to our success in the past 12 months, both in relation to our capital spend and our growth strategy, moves which have now consolidated Crieff Hydro Limited’s position as one of Scotland’s leading operators for the business and leisure market. A similar capital spend is planned for 2015 with continued reinvestment to improve longer-term efficiency, business performance and overall customer experience.”
He added; “Having the drive and commitment to providing great hospitality and the best customer experience possible can’t be underestimated. This is why we’re in business. We now have eight hotels as part of the Crieff Hydro Family, all very different in their own ways but each one joined together by our glue, which is real enthusiasm and commitment for delivering our unique brand of hospitality with emphasis on quality, personality and in continually exceeding customer expectations. We continue to be motivated to surprise and delight and this year offers us a whole new opportunity to do in each of our new hotels, extending the unique brand of Crieff Hydro hospitality.”
Crieff Hydro has announced that it has agreed terms to acquire Peebles Hydro and the Park Hotel, also in Peebles, from McMillan Hotels later this month. In a separate deal, the business has also kicked off a joint venture with Freedom Hotels to manage a further four Hotels: three on Scotland’s West Coast – The Isles of Glencoe Hotel & Leisure Centre, The Ballachulish Hotel and the Oban Caledonian as well as The Yorkshire Hotel in Harrogate. The moves will add over 400 bedrooms and £10M of revenue to the long-established business – consolidating its position as one of Scotland’s leading hotel operators.
Speaking about the news, Chief Executive of Crieff Hydro, Stephen Leckie commented, “This is a significant opportunity to develop travel, tourism and leisure opportunities in some of the country’s most important tourist areas. Over the coming years, our approach will be to develop and enhance the existing facilities in these hotels and build on their individuality and personality. They are all very different from Crieff Hydro as a destination resort. In time, they will all share the same warmth of hospitality and independent thinking we have at Crieff. Apart from investing to develop facilities, we’ll have a particular focus on bringing together all of the local elements. Engaging with partner businesses locally and understanding what local customers want from these hotels will be really important to us. These are great destinations and while we aren’t setting out to make these the most luxurious hotels in the area – we do want them to stand as real advocates for their villages and towns. What we are interested in is generating more new visitors to each of the areas.” The change in ownership will have no effect on the team working in Peebles Hydro; there will be no redundancies, nor will it affect any customers with existing bookings or gift vouchers.
Stephen Leckie said, “The trade press is full of hotels that are based on uniform formulas that work brilliantly in the cities. Taking on a mixed bag of country hotels is hardly fashionable. But once you’re away from the cities, it’s hotels like this that are the real heart and soul of Scotland’s tourism product and tourism is increasingly recognised as being amongst the biggest economic drivers for the country. So for the sake of the prosperity of our own business and the wider tourism picture I believe we’ll make a success of these. I’m looking forward to working with the Tourism Partnerships, local businesses and suppliers to partner and promote local attractions, eateries, shopping experiences, history and heritage and effectively do all we can to add to the quality visitor experience.” Part of the Company plans are to launch a Community Engagement programme in each hotel area, inviting local stakeholders to participate in developing the way ahead.
John Jennett, MD of Crieff Hydro added, “We’ve been working on these deals in a different transaction climate to the one we’ve been used to in the past. Whilst the approach is different, we have had a positive experience with most lenders and were delighted to get competitive offers from four major banks.” The end result is that the company has re-banked from Lloyds (Bank of Scotland) to Santander both for the core business and to fund the acquisition and development of Peebles Hydro. According to Jennett, “Santander were able to offer a real understanding of our business, short lines of communication and sharp commercial rates – something that was quite different from what was on offer elsewhere.”
He added; “Even with bank support, a good track record and a brilliant management team, deals like this require the best expertise alongside creativity and sheer stamina to bring to a conclusion. We decided at the outset we wanted the very best professionals to advise us and the deals have been facilitated by the experienced leisure/hospitality team at bto Solicitors Glasgow, and the Corporate Finance specialists at Campbell Dallas, also in Glasgow.
Stephen Leckie added, “Investment isn’t something that will happen overnight as it will need careful planning to get it right. What we do think can happen over the next few months is that we can bring a flavour of the service for which Crieff Hydro has become renowned and generate real momentum with our vision of what can be achieved in the longer term for the new hotels and tourism in the area.”
Colin Johnston, owner of the four Freedom Hotels said, “Although I’ve owned these hotels for a number of years, the setup has never been quite right. I’m delighted to enter a new type of joint venture with the team at Crieff Hydro whom I have known for many years. Having been through the hands of a few operators, it will take time for these businesses to stabilise but I know they have great potential. This is about the long-term for me and for Crieff Hydro. In time, I am sure that the teams in the hotels, the customers, Crieff Hydro and myself will all feel really proud to be part of this story.”
With years of low investment to catch up on, Jennett is quick to point out that the hotels may never return to the 4 Star standard they once were, but he believes this is less important than re-focussing on the business basics. “Running hotels is about hospitality – in other words looking after people first and foremost. Whether those people are your customers, your team or other people you deal with.” He says, “It has to be commercially sound, but if you come at it from a belief and a pride in hospitality then you are on the right track. It’s because of that belief that Crieff Hydro has thrived for nearly 150 years.”