The country's largest hotel group Dalata Hotel Group has reported higher revenues but lower profits for the six months to the end of June after what it called a "challenging" period for tourism in Ireland.
Under the terms of the deal, Dalata shareholders will get €6.45 in cash per share, representing a premium of about 12% to the closing price on June 2 - the day before the Scandinavian hotel investors first disclosed their interest in the Irish company.
The company today reported half year revenues of €306.5m, an increase of 1% on the €302.3m reported the same time last year.
But its profit after tax sank by 45% to 19.6m from 35.8m on the back of Strategic Review related costs and an increase in non-cash accounting charges.
The hotel group said its like for like revenue per available room (RevPAR) came to €109.78, down 2% on the same time last year, with its Dublin hotels outperforming the Dublin market.
But it said the UK market has been more challenging, which impacted on its RevPAR performance there with a 3.5% reduction on last year.
Dalata said it delivered strong execution of its expansion strategy, securing four hotels in prime capital city locations during the six month period, which will add over 1,000 rooms to the portfolio with an additional extension potential of more than 250 rooms at Dublin Airport.
These included The Clayton Hotel Tiergarten in Berlin, the Clayton Hotel Valdebebas in Madrid, the Radisson Blu Hotel Dublin Airport, which will be rebranded as a Clayton Hotel next year and the Clayton Hotel Morrison Street in Edinburgh.
It also reported "excellent" progress on the construction development works at the Maldron Hotel Croke Park in Dublin, the Clayton Hotel St Andrew Square in Edinburgh and the extension of Clayton Hotel Cardiff Lane in Dublin extension.
Dermot Crowley, Dalata Hotel Group CEO, said the first half of 2025 was certainly a busy one for everyone in Dalata.
"After announcing a strategic review on March 6, the Board and executive team worked tirelessly in ensuring that the best result was achieved for shareholders. On July 15, the Board recommended an all-cash offer of €6.45 per share from the Pandox Consortium which represents a 49.7% premium to the 12-month volume-weighted average share price up to March 6," he said.
"I believe that this represents a very positive outcome for shareholders which is why the Board is unanimously recommending the offer," the CEO stated.
He said that despite the external commentary of a challenging year for tourism in Ireland, on a "like for like" basis, its RevPAR in Dublin and Regional Ireland is at the same level as the same period last year.
"However, continued increases in costs and especially pay rates puts downward pressure on our margins. The UK market has been more challenging, and this has impacted on our RevPAR performance with a 3.5% reduction versus last year," he added.
The CEO said that growing a development pipeline whilst in the midst of a strategic review and formal sales process is challenging.
"In that respect, I am especially pleased that we secured a second hotel opportunity in Edinburgh and our first hotels in Berlin and Madrid. We also completed the purchase of the Radisson Blu hotel in Dublin Airport which will be rebranded Clayton next year," he said.
"Construction continues at our new Maldron hotel in Croke Park, our new Clayton hotel in Edinburgh and the extension at our Clayton hotel in Cardiff Lane. For the first time in the history of Dalata, when you include the pipeline rooms, we will have more rooms outside the Republic of Ireland than within it – we truly have become an international hotel company," he added.
"If shareholders approve the recommended offer on September 11, and the other regulatory conditions are satisfied, this is likely to be our last financial results announcement as a PLC," Mr Crowley said.
"While in some ways that is a sad occasion, I am happy that the Board is recommending a strategy that is in the best interests of shareholders. This strategy will also allow the people within Dalata to continue to deliver the heart of hospitality to our guests whilst growing the Clayton and Maldron brands within a powerful international hotel company," he added.
Looking ahead, the company said it continues to monitor the economic backdrop and market uncertainty, as demand levels are supported by strong levels of flight volumes and an event schedule that will drive international interest particularly in Dublin.
"The second half of the year will also benefit from the acquisition of Radisson Blu Hotel Dublin Airport and the full year impact of the four UK openings in mid-2024," the company said.
"Looking ahead to the rest of the year we remain confident in our ability to continue to perform strongly as a business," it added.
Dalata shares were flat in Dublin trade today.
