Troon hotel poised for bumper summer
COSTLEY & Costley, the Ayrshire hospitality group led by prominent chef Bill Costley and family, is looking forward to a bumper summer after the sale of a flagship hotel and wedding venue dented turnover during its most recent financial year.
The company, which owns the hugely popular Lochgreen House Hotel in Troon, sold Brig O’doon in Alloway to the RAD Hotel Group as preparations are made to pass the business on to Mr Costley’s son Andrew, also a chef and long-standing director.
Costley & Costley has also put Souter’s Inn, a luxury bar and restaurant in the heart of Robert Burns country in Kirkoswald, on the market. The firm ultimately aims to focus on two properties, Lochgreen and Highgrove House Hotel, also in the Troon area. Highgrove is currently being refurbished.
New accounts for Costley & Costley show the firm turned over £6.09 million for the year ended September 30, 2023, down 26% on the previous year, with the fall attributed to the sale of Brig O’doon in October 2022. Pre-tax profits dipped to £772,909 from £1.03 million.
However, after a quiet period across October, November, January and February, amid the wider pressures facing the hospitality industry, the current year is shaping up to be extremely busy for Costley & Costley, with wedding business booming and the Open Championship set to place at Royal Troon next month. The R&A, which organises the Open, has booked all of the hotel rooms at Lochgreen for the duration of the event.
Mr Costley, who runs the company with wife Cath and son Andrew, said: “We are very, very busy now March, April, May, June, July, August, and September will be exceptional. We are lucky in the respect that we have got the Open here in July as well. We have a lot of good functions. The weddings business is unbelievable, it is absolutely mobbed. We have a very healthy balance sheet currently. Getting the Brig away sorted us out financially.
“We are probably needing another year just to get things sorted out. We have a very good business in Souter’s. It’s got a huge turnover and I’m hoping that we can maybe get that sealed this year sometime. It’s not the end of the world if it doesn’t go. We’ll see how it is.”
Mr Costley notes in the accounts that the proceeds from the sale of Brig O’doon have been reinvested in the business. He added the group had renegotiated its lending facility, which reduced its net current liabilities to £1.89m from £5.68m.
He said: “The group will continue to explore options to expand and renovate the flagship venues and consider the position of the remaining smaller properties.”
Costley & Costley sold Brig O’doon to Robert & Vivien Kyle’s RAD Hotel Group, which added the venue to a portfolio including Seamill Hydro and Fairfield House Hotel in Ayrshire, the Carlton Hotel in Prestwick, and Dalmeny Park House Hotel on the south side of Glasgow. The deal came after Costley & Costley had offloaded Doonbrae for £1.3m and Eillisland House Hotel for £1m in the year ended September 2022.
The company hoisted the for-sale sign above the popular Souter’s Inn, based in the Ayrshire village of Kirkoswald, in March. The bar and restaurant, which has a thatched roof, was built on the site of the old school yard where Scotland’s national bard Robert Burns studied in the late 18th century.
Selling agent Smith & Clough, which has been instructed to sell the pub, is seeking offers in excess of £995,000 for the freehold interest in the business.
Mr Costley, a former chairman of Kilmarnock Football Club, said: “I have currently got interest in Souter’s, but whether it will materialise or not I don’t know. If not, we will just hold on to it until such times we get it away.”
Costley & Costley’s portfolio also includes the Cochrane Inn at Gatehead, which is currently leased out. The tenant has an option to buy the property in January.
Writing in the accounts, Mr Costley, said the group has “continued to benefit from a strong wedding market”, and the “outlook for weddings and events is particularly strong for the current year” despite a slow start.
Mr Costley, a classically trained chef who attended cooking school in Versailles, said: “The group are aware of a disappointing start to the 2023/24 year. Trading has been slower, but as is always the case business has now picked up as we enter the busy wedding season.
“The restaurants across the Costley sites are well established and will continue to generate a steady revenue stream for the group.
“The business is faced with several economic factors having an impact on the business at the moment, including energy costs and inflationary price increases in several cost areas. The directors are dealing with these and are optimistic that the business will trade through this period with a very limited effect on bank borrowings and future plans.”
The accounts show Costley & Costley employed an average of 141 people during the period, down from 185 the year before.