MARSTON HOTELS POWERS AHEAD AFTER UNVEILING
Monday 1st May 2006
Marston Hotels has announced plans for a multi-million-pound investment programme following another successful year of business, in which operating profits rose by more than 20%. Following the opening of its £22 million state-of-the-art Nottingham Belfry hotel last month, the company has earmarked a further £22 million over the next two years for investment in its hotel portfolio – work will shortly begin on a £7 million project at signature hotel Crewe Hall to build 45 new rooms, a spa and a leisure club. In addition, opportunities are being sought for new-builds in the M4 corridor and the South East. Marston Hotels’ managing director and chairman Chris Scragg says the company’s progressive and dynamic approach, along with a sustainable financial strategy, have been major factors in its growing success. “In recent years, venture capitalists have made significant moves into the UK corporate hotel sector,” he said. “These organisations generally take a short-term view which may not benefit the hotel sector in the long run. Marston Hotels, however, does take a long-term view – and it’s time people started taking us seriously.” Scragg, a former British powerboating champion, is used to making a bigger splash, and his bold move to mastermind a £125 million refinancing of Marston Hotels – organising the buy-out of several family members – is already beginning to reap its rewards. Marston Hotels, with Scragg as the largest single shareholder, has emerged from the deal as a more focused and forward-thinking operation, selling off properties that do not fit the board’s vision of the future, and investing heavily in a new generation of hotels, boasting the latest in quality four-star accommodation and recreation facilities. The businessman is highly critical of the way some companies involved in the UK hotel and hospitality sector are pursuing short-term policies to “hoover up” smaller hotel chains, squeezing assets and maximising revenue today at the expense of the long-term viability of their hotel stock. Scragg, whose hero is Winston Churchill – there’s a tribute to the great man in every hotel - has spent the last 20 years building the company’s value and when some family members wanted to cash in by selling off the firm last year, he acted swiftly to organise the buy-back of £30 million worth of shares. Now the motor racing fanatic, who will be competing in his 180mph-plus Aston Martin at most British circuits this year, including Brands Hatch and Silverstone, is keen to accelerate Marston Hotels’ development, investing in contemporary design and cutting-edge facilities, concentrating on quality rather than quantity. In 2004, the company unveiled another stylish new-build, the £18 million Cambridge Belfry, and The Nottingham Belfry, boasting 120 bedrooms, conference facilities for up to 320 delegates, leisure and spa facilities, in a modern, open plan design, continues the trend. Turnover has increased from £44.3 million in 2003 to £55 million in 2005 and Revpar (revenue per available room) has increased to £60.30 – more than 30 per cent above the national average (Source: Deloite Hotel Benchmark Survey). Said Scragg: “The current board and management team always believed there was more potential in the business and now we are putting into place a dynamic policy to fulfil that potential. Our focus is on quality, not numbers, and this will be for the benefit of our customers, shareholders and staff.” To arrange an interview with Chris Scragg, for more information, or to receive this release and photo electronically, please call Jeff Sims or Leah Taylor at Edwards Harvey on 01622 604600 or e-mail jeff.sims@edwardsharvey.com / leah.taylor@edwardsharvey.com. BACKGROUND INFORMATION FOR JOURNALISTS: THE BUYBACK In November 2005, the company purchased back approximately 45 per cent of its ordinary share capital at a total cost approaching £30 million. For some time, the company had been pursued by various buyers and a number of shareholders were keen for the company to be sold. John Marston and his immediate family, together with Chris Scragg and the other executive directors, believed the company had much more potential and were unwilling to see it sold. Chris Scragg therefore organised raising sufficient finance through new bankers (Barclays and AIB) to enable those shareholders who wished to “cash in” to be bought out. CURRENT SHAREHOLDER BASE Chris Scragg (largest single shareholder) 26% John Marston and immediate family 66% Executive directors 4% Others 4% CAPITAL INVESTMENT The company now has 12 hotels at key locations throughout the UK. Since April 2005, the company has spent more than £10 million on its hotel portfolio. It is planned to spend another £22 million over the next two years and funding for this has been arranged. The expenditure will include: Stratford Manor - a 50 bedroom extension with conference, leisure facilities and spa; Crewe Hall – 45 bedroom extension with leisure facilities and spa; Oxford Belfry – 20 bedroom extension with additional bar and food facilities and spa. INCREASING PROFITS YEAR 2003 2004 2005 TURNOVER (£m) 44334 48894 55080 OPERATING PROFIT (£m) 8910 8695 10482 Deloite Hotel Benchmark Survey for hotels in England (excluding London) for the 11 months to November 2005 show: Average occupancy 71% Average room rate £65 Revpar £46 Marston Hotels figures for eight months up to November 2005 (the new year end for the company): Average occupancy 69% Average room rate £87 Revpar £60 CHRIS SCRAGG Chris won a scholarship to college in the USA where he formed a rugby and football club. Returning to the UK, he graduated from Westminster Catering College and worked for several hotel companies before joining Marston in 1982. Chris has always been a keen sportsman and from an early age showed ability in a number of sports. He took up powerboating and became national UK champion in the cruiser class in 1989. He stepped up to Class II in 1990 and won the Guernsey Gold Cup in 1990 and came third in the National Championships. In 1991, he won the National Championships in Class II. Chris is an accomplished off-road driver and tennis player and has recently taken up motor racing, competing in an Aston Martin DBS V8 in the Heritage Sports and Saloon Car Series and the Aston Martin Owners Club Championship. MARSTON COMPANY HISTORY 1895 A building company was founded in Fulham, London by Mr WJ Marston, known as W J Marston Ltd. 1938/9 W J Marston's first venture into the hotel industry was when four derelict coastguard cottages were demolished and the Stade Court hotel was built in Hythe, Kent. 1947 The Hotel Imperial, as it was then called, was purchased when the War Office released it after wartime occupation. 1973 The Hogarth hotel was built by W J Marston. 1989 The company opened the newly built Bridgewood Manor hotel. 1990 The hotels became marketed and operated as 'Marston Hotels Ltd', one of three subsidiaries of W J Marston Holdings; the others being W J Marston & Son Ltd and Marston Properties Ltd. 1993 Marston Hotels acquired Coulsdon Manor hotel. 1995 Marston Hotels acquired the Stratford Manor hotel. 1997 Flackley Ash became Marston Hotel's first management contract, and in May 1997, The Oxford Belfry was purchased by Marston Hotels. 1998 The Crown Hotel became Marston Hotel's second management contract. 1998 W J Marston & Son Ltd relocated to Hythe, Marston Properties continue to operate from Fulham. 1999 Two more hotels: The Hampshire Centrecourt and Lansdown Grove joined the portfolio, along with a third management contract, Stoneleigh Park Lodge. April - Marston Hotels demerged from W J Marston Holdings Ltd and now exists as a fully independent hotel company. Stratford Victoria Hotel was added to the portfolio in May, Crabwall Manor was added in August, Winchester Royal was added in September and the management contract for The Crown ceased. In November Hellidon Lakes was added to the portfolio. 2001 Marston Hotels acquired Tankersley Manor hotel and the management contract for Stoneleigh Park Lodge ceased. In December the management contract for Flackley Ash ceased. 2002 In March the contract was signed for The Cambridge Belfry, scheduled to open in June 2004. In April Marston Hotels was awarded the management contract for Eastwell Manor, a 4 star luxury country house near Ashford, Kent. In May Tankersley Manor was awarded its fourth star. In June Marston Hotels acquired Aldwark Manor Hotel in York. In November the Hogarth Hotel was sold; with Marston Hotels developing more hotels in the conference and leisure market The Hogarth in its location had sat less comfortably in the portfolio. 2003 In July Marston Hotels acquired Crewe Hall in Crewe. 2004 In February 2004 the Stade Court was sold. In March 2004 the management contract for Eastwell Manor ceased. The luxury four star Cambridge Belfry opened on 1st June 2004. 2005 Construction work underway on The Nottingham Belfry, due to open in February 2006. The company sold Chester Crabwall Manor, The Lansdown Grove, Coulsdon Manor and The Winchester Royal, continuing the focus on the core brand of 100+ bedroomed 4 star hotels. 2006 The Nottingham Belfry opened 1 February.
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