Malhotra Group Announces Annual Results

Leading North East care, leisure and property business Malhotra Group plc has unveiled its annual results for the year ended 31 March 2024.

The Group’s results show turnover growth over the course of the year, partly driven by the addition to its care home portfolio through the acquisition of three care homes in October 2023. 

The Group continues to strengthen its property portfolio through continued work on its planned and extensive expansion programme across all sectors of the business. 

However, the economic climate has presented difficulties, with increasing staff costs and inflationary pressures on utilities and other operating costs resulting in a small drop in operating profit compared to the previous year.

The Group’s turnover for the year ended 31 March 2024 was £57.5m (2023: £47.1m) reflecting a 22 per cent increase on the previous year.

The Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) result of £13.4m (2023 : £13.5m), and the operating profit for the year of £10.3m ( 2023 : £10.4m) remained stable from the previous year.

Care Division

The financial year to 31 March 2024 has seen an increase in occupancy rates from 2023 and the portfolio has increased with the acquisition of three new homes.

The shortage of staff in the care sector continues to be a challenge, but the business has put appropriate plans in place to address this. 

Additionally, increasing costs such as staff, utilities and food have increased the cost base during the year.                                

Work continues on the conversion of the former Rex Hotel at Whitley Bay into the 83-bedroom Bay View House care home which is scheduled to open in early 2025. As of 31 March 2024, the Group has 1019 beds (2023: 805).             

In terms of financial performance for the year end 31 March 2024, fee income increased to £45.4m (2023: £35.0m) and operating profit was £10.1m (2023: £9.3m). 

Leisure Division

The cost of living crisis, which resulted in lower footfall to our leisure venues, particularly impacted the bars and restaurants this year. The hotels, conversely, continued to trade well although slightly below expectations. 

During the year, the creation of a new soft play space at The Three Mile, Gosforth, in some previously unused space has proved very successful and has helped to boost sales across the site. 

As in the care division, staff, utility and food costs increased the cost base during the year, which, combined with lower footfall, led to a drop in EBITDA compared to the previous year.

In terms of financial performance, turnover increased to £10.1m (2023: £9.9m) but there has been a decrease in EBITDA to £2.1m (2023: £2.8m).

Property Division

The Group is the eighth largest property owner in the North East with a 1.1 per cent market share and 68th nationally with a 0.3 per cent market share.

The Group continued to assess its rented property portfolio and disposed of two non-core properties during the year, entering into negotiations to dispose of a third site, which completed shortly after the year end.

Turnover decreased to £2.0m (2023: £2.2m) and operating profit for the year was £1.4m (2023: £1.3m).

Following the publication of the Malhotra Group plc annual results its Chairman, Meenu Malhotra, said he was “proud” of its performance and “that of our colleagues during the year.                                                                                             

“The year to 31 March 2024 was a challenging year for us, along with many other businesses in the sector,” he said, “as we were faced with increases across our cost base, particularly in regard to salary, energy, food and interest costs.

“This had a knock-on effect for our customers, as they looked to manage their personal expenditure and we, along with the whole leisure sector, saw that through reduced footfall in our leisure venues.

“We have continued to make investments where we see the potential to add value to our Group.

“This has included the acquisition of three new care homes, continued investment in our care and leisure sites so these remain of exceptional quality and a further £9m investment into India projects, which we believe have the potential to provide a very strong return and reenforces our strategy of holding diversified assets.

“That we have been able to build on our strong position this year to move forward, is down to several factors; our highly experienced management team, the diversity of our assets and our continued investment in quality across all of our business segments.”

He added: “We would like to thank all our staff for their magnificent contribution during the year.

“They have been outstanding and worked relentlessly to provide a high quality service to customers across all our business segments and we offer our heartfelt thanks for their enormous efforts and dedication.”  

Commenting on the year ahead, Mr Malhotra said: “We recognise significant challenges remain for us to navigate, including the current level of interest rates, which are now starting to fall but remain high relative to previous years and the lack of supply of staff in the care sector.                                                              

“The headwinds we are facing will undoubtedly continue to impact on our profitability, but our resilience, diversified business segments, strong balance sheet and our ability to generate cash across our group, mean we are well placed to navigate these challenges but are not immune to them.”