Thwaites chief executive Rick Bailey has told MCA that its hotels division will be a key focus of its growth strategy.

He spoke to MCA on the back of results showing a 14% increase in sales in its hotels and spas division in the six months to 30 September.

During the period, the group acquired two new hotels and launched another. The 56-bedroom Middleton’s Hotel in York was acquired in March. The group plans to upgrade some of the rooms next year. In April the group took on Langdale Chase, a 29 bedroom hotel on the shores of Lake Windermere. While Thwaites has plans to develop the site, the size and potential development options, as well as the planning requirements within the national park mean it may be some time before they can be executed. Thwaites’ 54-bedroom lodge, on part of the site of the Solent Hotel & Spa in Fareham opened in August and Bailey said the property as well as the adjacent Parson’s Collar Pub had traded well so far.

He said the group had the firepower to acquire more hotels but was also keen to add to its pubs and inns estate.

Turnover for the period was up 9% to £48m with operating profit of £7.7m up 4%. Pre-tax profits of £6.8m compared to a loss of £300,00 in the same period last year.

Bailey said the level of investment during the period showed the group’s commitment to growth for the long-term.

He told MCA: “We are very confident in what we are doing and that is backed up by many years of experience. We have proved over the last few years – and again in the last six months - that we will put significant investment into our estate and that we will see results from that investment. There are still opportunities for further investment.”

On the hotels estate, he said: “We have added a lot of bedrooms into the estate recently and it is a key area for us. It is a very complementary offer to our skills in pubs.”

He said the company, which has incorporated Starbucks into inns in Bristol and Cirencester and pizza & grill offers and wedding venues in its pubs estate, was still keen to innovate.

He said: “We know that our customers have high expectations and we look at how we can meet those in each individual situation. We introduced the first licensed Starbucks in Bristol and that has been a success. We are not afraid to innovate.”

In the pubs division, the company saw sales growth of 1% in the first half of the year, with operating profits in line year on year. Six “poor quality” pubs were sold for £900,000.

Thwaites spent £2.7m on pub investment projects in the first half year, including the launch of The Royal, in Heysham, Lancashire, in May and the Eagle and Child in Ramsbottom, which was recently awarded the Great British Pub of the Year by MCA’s sister title, the Morning Advertiser.

In the inns division, sales increased by 18% in the period compared to last year, aided by a number of major refurbishment schemes. Operating profits increased by 12% but the group said this had been held back by a number of headwinds, including the National Living Wage, business rates and food inflation.

Chairman Ann Yerburgh said: “The groundwork has been laid over the past few years to deliver this good set of half year results and we are hopeful that this success will carry through into the second half of the year. A number of investment projects were completed in the first half, which will contribute to continued growth.

“There continues to be uncertainty in the market, with consumer spending slowing in areas and some initial signs of distress in parts of the casual dining market. We are vigilant to these trends, however, we have a well invested business that is in a strong position to weather any economic or political storms and take advantage of further opportunities as they arise.”