Pubs group Innobox, which has seen a big increase in pre-tax loss, is launching a major hotel and health club project at a Shropshire mansion.
Figures to April 30 showed loss widening to £993,335 from £82,902 a year ago. They come after write downs on the group's Aerobox investment and an impairment of the fixed assets of Moss Cottage Hotels.
The group yesterday said difficult conditions continued in the current year but it was optimistic that the next few months would stimulate consumer confidence and result in improved trading conditions in the leisure sector.
The company was continuing to keep a tight control on costs and said it planned to sell two of its operations.
At the newly-acquired Fishmore Hall, a large Georgian mansion on the outskirts of Ludlow in Shropshire, the group had obtained planning permission to convert the main house into a 26 bedroom hotel.
Work on phase one, the completion of the first 15 bedrooms, was expected to be completed in the summer of 2006. Phase 2, the completion of the remaining 11 bedrooms, would commence once the business had become established.
At the same time, the group was also planning to convert the outbuildings into a manager's bungalow and a function room and to convert the gymnasium into a health club.
The board said that, while the project represented an exciting property development opportunity, the trading benefits would not be seen until the 2006/07 financial year.
In addition to the development of Fishmore Hall, the group was currently pursuing a planning application to develop two mews style houses in the old stable block of The Royal Oak.
In the year under review, the group's three trading pub & hotel sites: The Moss Cottage in Ripley, Derbyshire; The Three Tuns in Pettistree, near Ipswich; and The Royal Oak in Leominster, failed to recover volumes as they usually would after the traditionally quiet post Christmas period.
The group said it had now decided to sell The Three Tuns and The Moss Cottage.
The proceeds from the sales would be used to acquire further underperforming sites with good development potential and, therefore, capital growth prospects.