The Courier & Advertiser (Fife Edition)
Hundreds of staff leave Crieff Hydro
Crieff Hydro has lost hundreds of staff and taken on a multi-millionpound debt as Covid-19 decimated its revenues.
Chief executive Stephen Leckie said the decision to make redundancies had been “incredibly tough” but a “harsh reality”.
A year ago the group – which has seven hotels including Murraypark in Crieff – employed 1,050 staff. The impact of the pandemic means just over 600 workers remain on the payroll.
Crieff Hydro began redundancy talks with 241 staff in June and at the time Mr Leckie estimated 80 staff would have to go.
“In the end we had to make very few redundancies,” he said.
“A lot of staff found other work. In the end we had to make 60 redundancies, which was very tough.
“Furlough has been a huge help to us on one hand.
“But the national insurance and payroll contributions also cost us a lot of money. The wages costs for furlough presently are £40,000 a month.”
Mr Leckie, who is president of Perthshire Chamber of Commerce, said the business was losing £25,000 a day while its premises remain closed to the public.
He estimated the loss in revenue over the past year at more than £20 million.
“We had plans this year to take in £100,000 a day every single day to make enough profit to look after our people and to reinvest back into our business,” he said.
“We’ve gone from £100,000 in revenue every day to nothing.
“But it’s worse than that. We’ve had to borrow money to stay closed, which goes against every bit of business acumen I’ve learned. We have an additional £6m of unplanned and unwanted debt.
“While closed we are losing £25,000 a day – more than £1,000 every hour.”
The group’s financial year runs to the end of this month. It expected to record revenues of £15.4m instead of a budgeted £35.5m. A loss of around £1.1m is expected instead of a profit of £3.7m.
Despite the challenges, Mr Leckie has no doubts Crieff Hydro will survive the Covid-19 crisis.
He said traffic to the group’s websites indicated pent up demand and it was likely additional workers would be hired this year.
“When we can open – which we hope will be March – we know we’ll be busy and need to hit the ground running,” the chief executive said.
“Around 35% of our trade comes from international business, groups, tours, functions, conferences – we probably won’t see that this year.
“The good news is we will survive this with the bank’s support. They like the management of the company and I applaud our leadership team for that.
“We believe in the business – we think we are sturdy and stable.
“It’s the case that for a year we’re going to have to take a massive drop in income and take on debt that will take years to recover.
“But we will get back on our feet and back to trading successfully.”
Newly filed accounts for the year ending February 29 2020 show a successful year of trading before the pandemic.
Turnover increased to £32.9 million from £31.2m in 2019. Pre-tax profits were flat at £1.2m.