Liverpool hotels group Centre Island Hotels, owner of the Crowne Plaza, secures £36m loan facility after auditors warned in 2023 of a ‘material uncertainty’ about the future of the business. Tony McDonough reports
Centre Island Hotels, owner of nine hotels including three in Liverpool, has secured a £36m refinancing of its bank debt.
In November 2023 LBN revealed that auditors of Liverpool-based Centre Island had warned in the company’s annual report of a “material uncertainty” that “may cast significant doubt on the group’s ability to continue as a going concern”.
In the report the directors admitted the business was at risk of breaching its banking covenants. However, director Mark Foster told LBN he was confident it would secure the financial support that would address this issue.
This month the company has posted its annual accounts for the 12 months to December 31, 2023, on Companies House which confirm it secured a refinancing of its debt in spring 2024.
Writing in the report on behalf of the directors, another director Mark Sutton said: “After the reporting date, the existing bank loan was refinanced with existing provider AIB.
“On May 3, 2024 a group-wide facility was entered into to replace the existing facility which was due to expire on December 31, 2024. The total facility for the group was for £36m, over a five-year term, with quarterly instalments and a final repayment date of May 3, 2029.”
Founded in 1995, Centre Island’s first hotel was the Holiday Inn Ellesmere Port. Liverpool’s waterfront Crowne Plaza, one of the most prominent hotels in the city, opened in 1998.
Its other seven hotels are the Holiday Inn Liverpool City Centre, Holiday Inn Express Liverpool Royal Albert Dock, Crowne Plaza Manchester, Holiday Inn Express Manchester, Crowne Plaza Birmingham, Holiday Inn Express Birmingham and Holiday Inn Preston.
In 2023 Centre Island saw a rise in revenues from £34m in 2022 to just under £37m. However, pre-tax profits fell from £2.54m in 2022 to just under £2m. It was hit with high energy costs, although they have now eased, as well as rising food and supplier costs.
2023 was the first full post-pandemic year and Centre Island reported a strong recovery in both leisure and corporate markets. Its Liverpool hotels performed particularly strongly in May and July thanks to Eurovision and the Open Golf Championship at Royal Liverpool.
As revealed in a report in LBN earlier this month, Manchester is by far the biggest magnet in the North West for foreign direct investment and consequently its Manchester Hotels enjoyed a good corporate performance.
“International travel stabilised in 2023 and inbound groups from mainly Asia and India supported the wholesale segments in primarily the Manchester hotels,” the annual report said.
Preston and Ellesmere Port, which benefits from manufacturing sector demand “performed well” with midweek occupancy being strong on the back of “short-term corporate contracts”.
Across the estate RevPAR (revenue per available room) was up 6.2%, occupancy up 1.8% and ADR ADR (average daily rate) by 3.6%. Food and beverage sales rose 6.02% with a strong performance in weddings and corporate events.
There was also “significant capital expenditure” by Centre Island on its hotel estate including lifts and flooring.
“Following on from a successful 20223 the outlook for 2024 remains positive in terms of overall revenues albeit the forward event calendar across all locations is not as buoyant as 2023,” the report added.
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Almost 470 people were employed by the business in 2023. Total directors’ remuneration, including salaries and pension payments, were £487,000. The highest paid director received just over £240,000.
Ultimate parent company of Centre Island Hotels is Travan Services Ltd based in the Isle of Man. The report showed total dividends of £250,000 were paid out during 2023, the same amount paid in 2022.