Old Course Hotel owner posts dramatic reversal of fortunes with £110m profit

Kohler Scotland Ltd, the owners of St Andrews’ five-star Old Course Hotel, and the town’s Hamilton Grand luxury apartments and Duke’s Golf Course, have reversed a £8.7 million loss in 2013 after posting a £111,000 profit for last year.

The firm’s improved financial performance followed exceptional costs of £7.7m in the 2013 which was accompanied by a Duke’s Course depreciation charge of £4.6m and land value adjustment of £3.1m.

The Scottish company is backed by the ultimate parent undertaking of US plumbing magnate Herb Kohler.

Kohler Co was described as having “considerable financial resources, with business activities diversified across a number of sectors and geographies.”

It provided financial investment to the Scottish company as and when required and for major development projects.

Herb Kohler and his family are reported to have a fortune of $6.4 billion (£4.07bn) and are 65th on the Forbes 100 list of richest Americans.

He also owns the Whistling Straits course that hosted last weekend’s US PGA Championship.

Last year Kohler Scotland’s turnover was up 17 per cent at £18.6 million, but sales costs and administrative expenses produced an operating loss of £238,000.

That was considerably less than the previous year’s loss of £8.7m which included the exceptional items.

Without such charges in 2014, Kohler Scotland made a pre-tax loss of £273,000 which, after a tax credit, became a profit for the year of £111,000.

Director Martin Agard said the group has redeveloped Hamilton Grand, formerly Hamilton Hall, into premium apartments complementary to the hotel leisure facilities. The costs of these projects accounted for £32.8m in 2014.

The underlying trading revenue of the hotel, golf resort and spa increased as a result of a 4.4% rise in occupancy and luxury apartment sales.

Refurbishment, sales and marketing activity costs plus higher wages to service the increased occupancy levels offset the revenue rise.

Most of the 383 staff work in the hotel.

Mr Agard said St Andrews hosting the Open Championship this year would provide further opportunity to grow revenue and gain more exposure to the marketplace.