The Island Hotels Group turned a pre-tax loss of €834,156 into a profit of €445,025, in the financial year ended October 31.

The group last week announced that it was selling the Coastline Hotel for €14 million and that through its investment in Buttigieg Holdings Ltd, it had won an international tender for the exclusive rights to open Costa Coffee outlets in Spain, the Balearic Islands and the Canary Islands.

However, the group requires cash for a number of projects, including the upgrading of its existing hotels and the €80 million development of the Ħal Ferħ holiday village, to be rebranded as the Oasis at Golden Sands.

The group said efforts to raise fresh equity were not proving easy in the extremely difficult international market conditions, prompting it to plan a bond issue on the local market.

In a company announcement, the group said that the turnaround in pre-tax profit came on the back of increased revenue of €35.3 million, up from €33 million the previous year.

The group said that better-than-expected tourist arrivals led to marginal increases in hotel occupancy levels. However, these this did fully mirror the increase in arrivals because more tourists used non-hotel accommodation.

Hotel income improved, and this, together with an internal drive on cost efficiencies, translated to better operating margins. Sales of vacation ownership were at similar levels to the previous year.

The group maintained its market-leading position in event catering and investment, opening more Costa Coffee outlets.

“The effect of this growth area on group profits is expected to be felt when the initial investments take their full effect,” the group said.