Tumas Group grows in strength

The decision by Dolmen Properties p.l.c. to redeem the remaining balance of around €5.5m of its 6% secured bonds two years prior to their normal maturity was unexpected but has been described by financial analysts as a confirmation of the strength of the Tumas Group.  The company had already pre-paid €5.5m in November 2010.  

A spokesperson for Dolmen Resort Hotel confirmed that 2011 was one of the best years during which revenue increased to reach an all-time high of €11.84 million, an increase of 8.3% over the previous year.  This was due to a higher occupancy and a marginal better average room rate and very much in line with the continued and gradual recovery of the local tourism industry during 2011.

When Dolmen’s Bond was launched nine years ago, it was the first local corporate bond issue which offered a hypothec over property in favour of bondholders.   The bond was issued to repay the company’s bank borrowings at the time and fund a major refurbishment project, including the construction of new timeshare units.  Others followed in Dolmen’s footsteps. 

The financial performance of the Dolmen Hotel has been strong, especially in recent years.  Revenue growth was around 32 percent over five years.  This contributed to increased profitability, though 2011 profits were adversely affected by higher utility bills.  Dolmen invested substantially in solar systems, without which its utility bills would have shot up by 75 percent instead of by 30 percent.

The hotel has a €3m capital investment budget which has started this year and will be used by 2013. This is mainly focused on public areas and some rooms.

A spokesman for the hotel told Maltastar that, in spite of some early pessimism,  Malta has managed to finish 2011 as a record year in arrivals and “probably 2012 will be the same as 2011 or even slightly better” as the load factors on the capacity available on planes has increased compared to 2011.  The spokesman added that MTA need to keep focusing on seats and spending money well on advertising and marketing.

Asked about pressure earlier this year to reduce prices, Dolmen’s spokesman said that they resisted this as they reckoned that that it was a late booking market and did not need to discount a competitively priced product.