Thistle Hotels gave out some encouraging full-year figures when it reported on 5 March. Ope...
Thistle Hotels gave out some encouraging full-year figures when it reported on 5 March.
Operating performance was good, particularly in London. Underlying profit before tax for the 12 months to 31 December was up 12%. Earnings per share rose 6.3% to
5.1p. The company is two years into its £180m three-year programme to upgrade all rooms to four-star standard.
This refurbishment is paying off. Last year's rise in available room revenue (revpar) of 6% has risen to over 10% in the first two months
of 2001, fuelled by a buoyant London
market. London's revpar was 12.5% in the second half.
London's strength helped Thistle's UK occupancy rates rise 2.5%. Regional occupancy and revenues were depressed because of increased competition.
Thistle, the largest London hotel group, has now turned its attentions to tackling its regional problems. It is also to upgrade and roll out branded restaurants and health and fitness clubs, to achieve the company's goal of appealing more to the corporate market. Business demand now accounts for 53% of rooms sold against 47% the previous year.
Away from trading, Brierley Investments' 50% stake in the group is a drag. A weak bank balance is another handicap.
Without access to more capital it has some way to go before it catches up with the performance of the four-star operators. Analysts forecast pre-tax profits for 2001 at around £72m, with earnings per share at 12p. At 144p the share price has been inflated by bid speculation. The group is operating on a forward P/E ratio of 12 and is now fairly priced given 2001 economic uncertainties. There's more value to be found elsewhere.