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This report looks at the annual report and accounts for Macdonald Hotels.

Extracts from this document...

Introduction

Kelly Marshall Registration Number 200114751 Hospitality Management Accounting Coursework Submission Date: Monday 31st March 2003 Lecturer: Mr. Erwin Losekoot Contents Page Page 3 Executive Summary Page 4 History and Background of Macdonald Hotels Page 5 Company Information Page 6 Company Directors Page 7 Profit and Loss Statement Page 8 Balance Sheet Page 9 Analysis of Report Page 12 Summary of Macdonald Hotels Page 14 Bibliography Executive Summary This report looks at the looks at the annual report and accounts for Macdonald Hotels. The report is split into sections to discuss the background and history of the company and its current trading and operating data. The report then goes on to look at the profit and loss account and the balance sheet and then looks at the analysis of how the companies strategic objectives have influenced the success of the company comparing the years 2001 and 2002. From the annual reports and from media coverage in publications such as the Caterer, it can be identified that the Joint Venture of Hotels development, has clearly influenced the profits of the company allowing these to be integrated into the company and increasing the brand image of the hotel group. However the company has faced difficult trading markets and from the report it can be identified that the Hotels Groups successes are dependant upon certain locations. Background & history Since its inception in 1990, Macdonald Hotels has grown rapidly from two hotels in Aberdeenshire to become one of the UK's largest hotel groups, incorporating managed, owned and joint-venture properties. The company was established 10 years ago with 2 hotels, which were both free hold properties, and in the first set of results showed a profit of GBP 450,000. ...read more.

Middle

Report and Accounts 12 Months to 3 October 2002 Page 27 Analysis of company accounts Group profit and Loss Account Macdonald hotels have continued to increase in turnover and profits now for the 12th consecutive year, despite a slump in revenues in London Hotels. The profit and Loss Account shows that Macdonald Hotels recorded a 29% increase in turnover to �139.7m, compared with �108.1m for the same period in 2001. There was also a pre- tax profit, which increased by 17% to 16.1m against �13.8m the previous year. The increases were also boosted because of the integration of the Heritage Hotels from Compass of last year. Excluding the joint venture hotels, which comprise of 42 Heritage Hotels, group turnover increased by 13% to �91.4m, compared with �80.8m in 2001. The result of Macdonald Hotels joint-venture acquisition of 46 former Heritage Hotels resulted in overall turnover increased by 77% to �66.7m. This is also reflected in profit on ordinary activities before tax, which on break down shows a significant increase on gain on sale of tangible assets from 185 in 2001 to 560 in 2002. Operating profit also increased by 15.6% from �16m in 2001 to �18.5m in 2002. However high interest costs from the Heritage deal held back the pre-tax profit figure. Excluding interest charges, profits before tax were up by 58% to �12.6m The profit and loss account for Macdonald Hotels clearly shows a significant increase in the group and share of joint ventures turnover for 2002 compared to 2001. Turnover for 2002 has increased since 2001, with share of joint ventures contributing to more compared with 2001, due to the company interest put into joint venture hotels. ...read more.

Conclusion

For example several key areas around the M25 had seen occupancies down by 7% to 59.4% and rates down 13% to �89.27. However the report shows that the company's wholly owned hotels increased by 5%, with a 3% increase in room yields to �40.98 and a 5% increase in total revenues per room to �93.44. Recent Media coverage of Macdonald Hotels in the Caterer 24 February 2003 warns of lower than expected profits in the next six months. However the on going development and acquisition of joint venture properties has to be taken in to consideration. Results show an encouraging start with revenue per available room increasing by 2% in the four months since 3 October 2002 compared with the same period a last year. However it has been identified that trading has since declined, with profits therefore lower than the company would have forecasted. However Macdonald Hotels has always maintained that the "company has always traded well through difficult times." It is clear that the company strategy of Macdonald Hotels, which is to build a portfolio of high quality hotels and resorts is central to every development and investment, to ensure that it fits in and can be integrated into the group. The group believe that they still need to further develop the brand. The company believe that their product today is as good as full service as Marriott or Hilton. However the Hotel Group is not fully known yet. Macdonald hotels believe that because at the moment they are small and agile the company enables them to be more flexible to changing needs, unlike maybe Marriott who have a formula and a format that they don't move from. ...read more.

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