28 June 2006

The Web
Business Today

Suncrest’s interim results highlight tourism’s stark reality

The barometer for tourism has gone into negative territory and the unaudited interim results published by Suncrest Hotels plc yesterday are confirmation of the bleak period hotels are passing through.
The unaudited interim results for Suncrest, covering the period November 2005 to April 2006 considered to be the low season for the tourist industry are a confirmation of the stark reality exposed last week by the Deloitte study compiled for the MHRA.
Four star hotels have passed through a difficult period and according to the Suncrest accounts, although demand in the summer months is expected to increase this is not expected to be enough for the company to register a profit.
The profit warning is clear. However, it is good to know that the company’s management is doing all that is possible to control costs.
The turnover for the six month period reached Lm627,000 as against Lm802,000 for the same period in the previous year. This dramatic decrease of 22% in turnover was partly offset by a reduction in staff and operating costs, together with net interest charges.
The increase in the loss is only four per cent but still a loss nonetheless. And if this is a reflection of what is happening in the tourist industry, it is bad news.
Suncrest sustained cost pressures and weak demand which reflects what we have read on other four star hotels that are dependent on tour operators. The balance sheet shows that the total assets of the company are enough to meet the liabilities.
The entity registered some success in sales of week stays at the Suncrest Beach Vacation Club and the directors used proceeds to buy back Lm118,000 in bonds, which can be considered to be a smart move.

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