Booming Birmingham's inner-city regeneration has helped two prestigious hotels perform "fantastically".
Marylebone Warwick Balfour group - owner of Malmaison and Hotel Du Vin - says the two city operations have proved integral to the company's business.
Joint finance director Andrew Blurton said: "We are very, very pleased with them. They've done fantastically well, and there's no doubt they've benefited by the transformation of the city centre. They are a core parts of our business and we are exceptionally pleased with them."
He said the 66 bed Hotel Du Vin at Edmond Street and 189 room Malmaison at the Mailbox complemented each other, and Birmingham was the only city where the two brands operated in tandem.
Mr Blurton spoke out as MWB saw its losses widen to £9.8 million before tax in the year to June 30 from a loss of £3.3 million a year earlier but it said its balance sheet remains strong and prospects are promising.
And the group's equity shareholders' funds - which it prefers to focus on - rose to 145p per share in the year, up 46 per cent on a year earlier.
Group net assets now stand at £211 million, of which £89 million is accounted for by the enlarged Malmaison group.
Marylebone has also reduced net debt further to £ 377 million from £468 million following strong operational cash flow and proceeds from property sales.
It said gearing nearly halved over the year to 179 per cent from 311 per cent.
The group's three main business divisions - Malmaison and Hotel Du Vin, the MWB Business Exchange, and Liberty - have laid strong foundations for growth, said chairman Eric Sanderson.
At Malmaison and Hotel du Vin combined underlying profits, EBITDA, was £16.2 million during the year, up 38 per cent year-on-year.
There are three new Malmaison hotels in the pipeline and sites are being sought in London and Dublin.
Robert Cook, chief executive of Malmaison, said: "With substantial funding in place we have the resource to take the group to the next stage in its development and we are confident that during the next five years Malmaison and HdV will become a 25-strong hotel group, cementing its position as the UK's leading lifestyle boutique hotel business."
At MWB Business Exchange operating losses before tax were cut to £1.4 million from £4.6 million. Like-for-like licence fee income was steady at £40.6 million while service income rose 17 per cent to £13.8 million.
Chief executive John Spencer said: "We believe the market for flexible property solutions is maturing and therefore that demand will increase for the services provided by MWB Business Exchange. As a result, we look forward to the future with confidence."
London store offshoot Liberty cut its pretax loss in the year to June 30 to £2.7 million from £6.2 million a year earlier after seeing an 11 per cent increase in sales to £43.8 million.
It is now trading at break even at the operating level. But it remains cautious on current trading after it saw sales in the first 11 weeks of the current year hit by the London terrorist attacks - down five per cent.
MWB owns 68 per cent of Liberty, which is an an AIM listed company and reported separately.