Activities

Peel Hotels owns and operates eight four-star hotels.

It was set up in 1997 by Robert Peel, the son of a restaurateur, shortly after he quit his role as chief executive of Thistle Hotels, which was then the second-largest hotel group in Britain after Forte.

Peel and his brother Charles hold more than 50% of the equity in the AIM-listed company.

Timeline

• 1997: Robert Peel quits his role as chief executive of Thistle Hotels after it fails to meet profit forecasts following its flotation in 1996. In November, he creates his new company, Peel Hotels.
• March 1998: Peel Hotels starts trading after buying the Bull hotel in Peterborough for £3.8m.
• September 1998: Peel Hotels floats on the Alternative Investment Market. It also wins the management contract for 29 smaller, provincial, three-star Thistle Hotels bought by Grace Hotels, a subsidiary of investment bank Lehmann Brothers, for £62.7m. They are gradually sold off, with most of them changing hands after 2000.
• October 1998: Sixteen Thistle staff defect to Peel Hotels, including key directors Norbert Petersen and John Perkins.
• 1998: In December, Peel Hotels signs an agreement to buy the Pennington Midland hotel in Bradford for £4.25m in a reverse takeover.
• 1999: In September, the group buys the Golden Lion in Leeds and the Caledonian in Newcastle-upon-Tyne for £8.75 from Grace Hotels.
• 2002: Peel Hotels buys two more properties – the Avon Gorge in Bristol and the George in Wallingford, Oxford – after raising £3m in November 2001 through a share issue.
• 2004: Grace Hotels puts its final four hotels up for auction in July, and sells its Merrion hotel in Leeds.
• May 2005: Peel Hotels buys the three remaining leasehold properties it manages for Grace Hotels for £2.75m, along with the freehold on the Golden Lion. To fund the acquisition of the Crown & Mitre, the Strathdon and the King Malcolm, the group places £600,000-worth of shares at 90p apiece and secures a £2.5m loan repayable over 10 years.
• August 2007: The group announces the sale of the Avon Gorge hotel and staff house in Bristol for £15.5m and of freehold land with planning permission in Bradford for £2m.
• September 2007: Peel Hotels exchanges contracts to buy the head lease and two small freeholds on the Bull hotel in Peterborough for £2.35m. It also agrees to lease the basement of the Midland hotel in Bradford for 25 years to Clermont Leisure, which will create a casino there. The moves during the past two months leaves the group free of debt.

Financial snapshot

Full year  
Turnover: £15.9m (2006: £14.9m)
Pre-tax profit: £1.56m (2006 - restated for FRS20: £1.16m)

Half year
Turnover: £8.76m (2006: £8.69m)
Pre-tax profit: £755, 226 (2006: £521,180)

Financial year-end: 11 February 2007
Half year-end: 26 August 2007

Operating data

Number of hotels: eight

In the year to 11 February 2007, revenue per available room (revpar) dropped by 0.6%, average room rate increased by 1.6% and occupancy dropped by 2.2%.

In the half-year to 26 August 2007, revpar grew by 4.2%, average room rate by 2.3% and occupancy by 1.7%.

The hotels
Bull hotel, Peterborough
Caledonian hotel, Newcastle
Crown and Mitre hotel, Carlisle
George hotel, Wallingford, Oxford
Golden Lion hotel, Leeds
King Malcolm hotel, Dunfermline
Midland hotel, Bradford
Strathdon hotel, Nottingham

Strategy

“The sale of the Avon Gorge hotel, after the half-year end, for £15,500,000 and Salem Street, for £2,000,000, has effectively left the company with no debt, net of the acquisition of the head lease of the Bull hotel in Peterborough. The Board believes that the company is in a strong position going forward to consider the merits of expansion dependent upon beneficial market conditions."

Source: interim results, 9 October 2007

Key directors

Executive chairman: Robert Peel
Chief operating officer: Norbert Petersen
Financial controller: Nick Parrish

Contact

19 Warwick Avenue
London
Greater London
W9 2PS

Tel: 020 7266 1100
Fax: 020 7289 5746

E-mail: info@peelhotel.com
Website: http://www.peelhotel.com

Commentary

Robert Peel is best known for turning the ailing Mount Charlotte hotel group into a major player in the UK market, following his appointment as chief executive in 1978 at the age of 29. He turned a £1m-a-year loss into a £38.8m profit by 1989 – the year he bought Thistle Hotels from Scottish & Newcastle to create the UK’s second-largest hotel group after Forte.

His approach at Peel Hotels is altogether different. Peel wants to build the chain slowly, “one step at a time, quietly and modestly” and has no desire to preside over a sprawling empire that would deflect his hands-on approach and legendary attention to detail. “One thing I don’t want to do is to get into a position where I will be a minority shareholder of a huge company and an employee again,” Peel told Caterer in 1998. “With 100 hotels, it was impossible to get into the kind of detail I can now.”

Although the Grace Hotels management contract has come to end, Peel has indicated that he may review other management opportunities. He has made no secret of his desire to acquire a London property, but inflated prices have to date frustrated his ambitions.