MWB Group, the operator of the Hotel du Vin and Malmaison hotel chains, has reported a widening of pre-tax loss for the final six months of 2010, as it felt the impact of the adverse weather and a “more competitive pricing environment”. At the same time, the group announced it had agreed to acquire the outstanding shares in sister company MWB Business Exchange, in a deal that values it at £33.6m. It currently has a 72% stake in the workstations provider. Pre-tax loss widened from £7.8m to £11.6m during the last six months of 2010, which the company said was principally due to a property impairment of £5m during the last six months of the year. In the six months to 31 December 2010 ebitda was up 13% to £14.5m, on turnover up slightly from £113.5m to £114.2m. It said it had reduced its gearing from 209% to 180% following last year’s £27m share placing and the sale of its retail business Liberty, which raised £42m in cash. The company said it plans further significant debt reduction. The group said it remained optimistic that it's efforts to improve revenue and margins will be rewarded throughout the remainder of 2011 and into 2012. The company said that although its Malmaison chain was impacted by the poor weather in December, average room rate rose by just under 3% to £107 across its 26-strong hotels estate. Revenues across the chain totalled £58.8m, slightly up on the previous year. It said that the bad weather had had an adverse affect on its food and beverage trading, which was flat over the year. Revenue dropped slightly from £48.8m to £47.2m, which the company said, “reflected a more competitive pricing environment”. The company said it continued to look at overseas expansion opportunities for Malmaison. It said its model for expanding Malmaison outside the UK will be based on either operating and management agreements or commercial leases rather “than acquiring freehold properties and the consequent risk”. For its current 14-strong Hotel du Vin chain, it said it will continue to focus its expansion plans on the UK. The company said its initial objective is to open a further six Hotel du Vins although, in the longer term, it believes there is scope to double the current size of the chain. The company opened its first site under its new Bistro du Vin format in London's Clerkenwell earlier this month. It aims to develop a small chain of Bistro du Vin in selected locations across the capital. A second restaurant under the brand is set to open on the site of the former Las Iguanas in London’s Soho this June. The group also operates two sites in Brighton and Birmingham under its Pub du Vin brand. The company said it was currently examining ways of further reducing its gearing as well as providing funds for its planned expansion. Robert Cook, chief executive, said: “The first quarter of 2011 has been challenging with the continuing uncertainty surrounding the UK economic recovery unsettling consumers. That said, we have continued to focus on delivering premium service at value for money prices, and as a result have delivered a modest improvement in rate and occupancy in the quarter over the comparable period last year. “While it is difficult to be confident about the future in these uncertain times, I believe we have the brands, the products and the people to continue to make progress and lead the boutique hotel sector.” The company also announced that it and MWB Business Exchange, which provides over 19,100 workstations from 71 centres throughout the UK, have agreed the terms of a recommended acquisition by MWB of all those shares in Business Exchange it doesn’t already own, in a deal that values its at £33.6m. MWB, through its subsidiary MWB Property, currently has a 72.28% stake in MWB Business Exchange. It said that revenue and occupancy had held firm across MWB Business Exchange during the final six months of 2010 however pre-tax loss widened to £2.8m from £489,000 a year ago. The group said that the first quarter of 2011 “has been encouraging as workstation rates show early signs of improvement”. However, due to the slow pace of recovery to date, the company now anticipates that any significant improvements may be deferred into 2012.

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