ANGELA Vickers, the chief executive of Edinburgh-based Apex Hotels, is in line for an after-tax bonus of around £2 million after the group’s valuation more than tripled to £200m under her leadership.
The company, which operates nine four star hotels in London, Edinburgh, Glasgow and Dundee, announced the long term incentive plan payout as it reported an 11 per cent increase in underlying profits to £10.6m on group turnover up 2 per cent to £57.2m.
“When the long term incentive plan was agreed in 2008, I had no expectation that the overall growth of the company and financial return would be at the level it is now,” said Ms Vickers, who has been with the family-owned business for 12 years.
“To date, I’ve overseen five hotel openings, including three in London. Being able to showcase the Apex product to a growing customer base, whilst delivering steady financial returns in a highly competitive industry, can bring challenges, particularly during periods of difficult trading.”
Apex Hotels chairman Ian Springford, 43, whose father Norman, 71, founded the business in 1996, said the long term incentive plan had been put in place when the company was valued at £60m.
“We’re now looking at a value of around £200m, so that’s quite significant growth that she’s overseen. It’s a combination of new hotels opening as well as the performance of existing hotels, and that feeds back into the valuation.”
Ms Vickers joined Apex Hotels as finance director in April 2004, moving to managing director in July 2005 and chief executive in January 2015. Ms Vickers said she hoped to use the bonus to “reinvest and support future Apex hospitality talent”, but meantime was being kept busy with a number of projects including the opening next summer of a new £35m, 177-bed hotel in Bath. Apex said the payout would cost the group £4.8m, including employer and employee taxes. No date had currently been set for payment of the plan.
Mr Springford, who is a qualified architect with his own practice, said Apex was also reinvesting heavily into the existing hotel portfolio, with refurbishments planned of the Dundee, Edinburgh Grassmarket and Apex City of London hotels. Dundee had particularly benefitted from the 2014 Commonwealth Games and Ryder Cup events, while the group’s new 104-bed Glasgow hotel, acquired in December 2014, was benefitting from the arrival of the 13,000-seater SSE Hydro venue.
“Glasgow is performing ahead of where we anticipated on the budget – and a lot of that is down to the Hydro, which drives a phenomenal amount of business in Glasgow,” said Mr Springford, whose mother Dorothy, brother David and sister Jo also sit on the board.
Apex, which celebrates its 20th anniversary this year, said successful management of room rates during periods of high demand allowed the group to achieve strong growth in revenue per available room – a key performance metric in the hotel industry – of over 4 per cent. The total number of rooms sold in the year to end April 2015 fell just under 1 per cent to 360,334. Occupancy was also down from 87.2 per cent to 86.5 per cent. However the average room rate grew almost 5 per cent to £126.17.
During the year, the company generated finance of £5m from a sale and leaseback arrangement to add a 30-bed extension to its City of London hotel. The new Bath hotel is also being financed by a £29m facility from Bank of Scotland, together with a 150 year sale and leaseback transaction, agreed after the year end. The arrangement fee for another loan to develop the group’s London Temple Court hotel generated an exceptional interest charge of £1.2m which was repaid in full in September 2014.
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