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AX Holdings registers €25 million post-tax profit

AX Holdings chairman Angelo Xuereb says the group is considering returning to the market next year as it weighs options to expand its hospitality operations. Photo: Chris Sant Fournier

AX Holdings chairman Angelo Xuereb says the group is considering returning to the market next year as it weighs options to expand its hospitality operations. Photo: Chris Sant Fournier

AX Holdings has registered a post-tax profit of €25 million for 2012 as the group enjoyed a positive year in tandem with the record tourist arrivals last year, and following an increase in property valuation in a periodic review, finance director Michael Warrington told The Sunday Times last week.

Every euro which came in at the top flowed down to the bottom line

The group, which owns and operates four hotels and resorts, is involved in construction and property development and holds a stake in Valletta Cruise Port, has posted a turnover of €23 million and an operating profit of €3.5 million. A collection of factors enabled the group to revalue a number of its properties, including strategic assets, leading to the €25 million net profit. Shareholders’ equity now stands at €80 million.

“The group’s accounting policy, like that of most major companies, stipulates that properties are revalued every five years,” Mr Warrington explained. “Last year, we saw significant improvements in value.”

AX Holdings is now considering returning to the market with options for investors next year for general financing purposes as it weighs options to expand its hospitality operations. Its financing arm has been consistently buying back the bond which is due for maturity this December 15 over the last two years, and it will be completely repaid on maturity.

AX Hotels has directed considerable investment to upgrade its tourism offering. The four-star The Victoria and the five-star The Palace hotels in Sliema continue to win online business; the group now plans to upgrade The Victoria to a five-star. The Sunny Coast and Suncrest resorts in the north of the island have carved a niche for themselves in the timeshare and tour operator business.

“The macroenvironment in which we were operating last year was positive,” Mr Warrington explained. “The hotel operations were able to capitalise on the record year in tourism and all our properties increased turnover and profits.

“Every euro which came in at the top flowed down to the bottom line through cost management and efficiencies. Our research has shown that we won more than our fair share of the market increase.”

Chairman and chief executive Angelo Xuereb attributes the hotels’ success to a team of experienced and loyal young managers, led by hospitality director Claire Zammit Xuereb, who excel at maximising capability and managing costs according to travel and tourism trends.

Mr Xuereb added that the group’s construction and project management activity has also benefitted from diversification and increased cost-consciousness. The completion of the Valletta Parliament structure in a record four months, under the leadership of his other daughter Denise Xuereb – a qualified and experienced project manager – won the company a prestigious certificate from project managers Bovis.

The group has also successfully ventured into the more painstaking activity of restoration after proving its capability to reach meticulous standards. The group’s restoration arm has been responsible for six projects in Valletta and Vittoriosa, and has just started work on St Paul’s Catacombs.

Now the group has embarked on its latest major project, the €50 million Simblia Gardens luxury serviced retirement residences and spa in Naxxar. The retirement village, which will be marketed locally and overseas to higher end potential residents, sits on a 1,700-square-metre footprint, of which 43 per cent will be occupied by two blocks comprising 235 apartments with terraces, a pool, spa and chapel. The rest will be occupied by gardens and open spaces. “We submitted our first application for this project in 1991,” Mr Xuereb said. “We are now at excavation stage and we hope it will be completed in 2016.

“Simblia is designed to boast industry-leading green credentials by maximising energy efficiency, capturing rain water and recycling various classes of water. Its differentiator will be a promise to cap residents’ utility bills at nominal levels.”

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