Cash flow problems hit Maypole hotel group

Hotel operator the Maypole Group today revealed it is in talks with its lenders after a poor fourth quarter of 2008 raised doubts over its future.

The group, which owns six hotels in the UK, admitted that it was experiencing “significant pressures” on its cash flow.

In a statement, Maypole said: “Trading in the fourth quarter of 2008 was disappointing and considerably below our expectations and the equivalent period in 2007.

“This has resulted in significant pressures on the group's cash flow. We are in discussions with our bankers with a view to agreeing a solution and it is expected that decisions will be reached by the end of March 2009.

“Our strategy is being reviewed, particularly with a view to reducing costs meaningfully, and fund-raising options are being considered to secure the company's position going forward.”

The company was founded in November 2003 and, in February 2004, it raised £607,798 by way of a private placing to assist with its first acquisition,  the 32-bedroom Wroxton House hotel near Banbury in Oxfordshire, for £2.15m.

The acquisition of The Lifeboat Inn and Old Coach House, both located in Thornham, Norfolk, was completed in April 2005 for an aggregate price of £5m.

In March 2007, Maypole completed the acquisition of the 15-bedroom Wayford Bridge Hotel, Norfolk for a total consideration of £1,950,000.

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By Gemma Sharkey

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