Hydro Hotel Eastbourne : Year ended 31 October 2022

HYDRO HOTEL, EASTBOURNE, PLC

CHAIRMAN'S STATEMENT

FOR THE YEAR ENDED 31 OCTOBER 2022

Results for year ended 31 October 2022

I report on the company's results for the year ended 31 October 2022.

It was another challenging trading year for the company with the ongoing Coronavirus pandemic, the cost of living crisis and the general effects of Brexit on supply sources. However, I am pleased to announce that sales recovered in the year totalling £4,402,288, an increase of 57.7% on the £2,791,482 sales for the previous year (2021 25.0% increase). Operating profit for the year was £429,300 (2021 £461,312). After interest receivable and the corporation tax charge, the post-tax profits for the year were £336,700 (2021 £362,660). Taking into account the level of post-tax profits for the year and with the company having strong reserves and assets, the Board decided to pay a dividend of 14p per share in October 2022 absorbing £84,000, reinstating the second interim dividend based on the results for the year ended 31 October 2019, declared for payment in April 2020 and then cancelled due to the Coronavirus pandemic. The Board also decided to declare a dividend of 23p per share (2021 20p per share) absorbing £138,000 (2021 £120,000).

The trading environment for the company continues to be challenging. Despite careful monitoring of food and drink costs the gross profit percentage was slightly down on the previous year but increased sales meant that overall profitability was up. Repair costs increased in the year reflecting the implementation of window replacement and general maintenance and refurbishment projects which were delayed during the Coronavirus pandemic.

Capital improvements at the hotel during the year included the refurbishment of the Orangery, the Crystal Restaurant and Wedgwood patio, as well as general refurbishment of some bedroom interiors.

There have been no periods of closure since the last financial year but the Board and management are mindful that future restrictions may be imposed by Government to curb the spread of new variants of the Coronavirus and all necessary action will be undertaken at the appropriate time to protect and maintain the company's business.

Developments since 31 October 2022

New marketing techniques will continue to be developed during the year to further encourage direct bookings at the hotel, which show an increase, year on year.

Further updating of the décor and furniture of the Crystal Restaurant will be undertaken in the coming year and it is planned to instal solar panels at the hotel, in keeping with the company's green policy and to save energy costs. Refurbishment of bedrooms and public areas will continue.

Our Staff

I would like to congratulate our General Manager, Jonathan Owen, on the results achieved for the hotel this year, despite ongoing challenges for the hotel and tourism industry.

I wish also to record our thanks to our management team and all our staff for their dedication to the hotel during these challenging times. All staff continued to deliver a high quality of service to the hotel's customers in difficult circumstances.

Graeme C King, MA, CA

Chairman of the Board

21 February 2023