G3 Group, which owns and operates the four-star Solana and Pergola hotels, along with their spas and food and beverage outlets, in Mellieħa, is in the middle of a shopping spree worth an estimated €3.7 million that will see it take ownership or stakes in three other establishments it already operates in the northern tourism hub.
Its acquisition of Palm Beach Resort, formerly known as the Armier Lido, was initially announced last year, but the group only revealed the price tag this year, saying that it is “expected to be in the region of €2 million.”
The transaction is set to be concluded in December 2024. The group is operating and managing the property throughout the promise of sale period.
During 2021, G3 Group entered into an agreement to rent a bar in the centre of Mellieħa known as the Square Gastro Bar, with the option to acquire the bar by the end of 2024. The group has announced that it aims to conclude the final deed of sale in December 2024 for a consideration of €1.45 million less the rental payments already made as at the date of final deed.
In October 2023, G3 Group also entered into a 15-year agreement to manage and operate a property comprising an eight-room boutique hotel known as DOMS and a brasserie, in the parish square of Mellieħa. In February 2024, group subsidiary G3 Hospitality Ltd acquired a 20 per cent stake in the property for €250,000. Half the amount was paid that month, from internal cash resources, with the balance to be paid in December 2024.
The group said that the deals will partly be funded through bank financing.
The acquisitions follow the completion of a 55-room extension to the Solana Hotel, completed in March 2024. Another site next to the Pergola Hotel was acquired in 2022, with the aim of developing it as an extension, although the group did not provide a timeline.
G3 Group is also eyeing potential expansion outside of its Mellieħa base. In April 2024, it entered into an agreement with a third party which would allow G3 Hospitality Ltd to take on the finishing of a premises situated in St Julian’s, from which it intends to manage and operate an 88-rooom hotel including spa amenities, fitness and health facilities as well as food and beverage establishments. This transaction is still subject to bank financing.
Interim results
G3 Group reported an upturn in its results over the period, achieving above budget occupancy levels and exceeding budgeted revenues.
It expects revenues to improve by 14.3 per cent to just over €14 million for the year, but costs are expected to rise at a more rapid pace, leading gross profit to grow by nine per cent to €5.9 million, reflected a contracting gross profit margin.
The group is also expecting to face greater cost pressures across its selling, general and administrative expenses
Therefore notwithstanding the expected increase in revenue, EBITDA is expected to decline from 2023’s €3.5 million to €3.4 million.
Factoring in higher finance and depreciation costs, the group expects to register a pre-tax profit of €1.2 million in 2024, as compared to €1.6 million for the previous year.
Main Image:Palm Beach Resort
