Ladbrokes-owner Hilton sees 'steady recovery' for hotels
Leisure group Hilton offered further encouraging signs from its hotels arm today but warned it was still too early to celebrate a full recovery.
UK and Ireland proved to be one of the strongest regions for Hilton, with profits from the portfolio up 23.8% to £42.2m (€62.8m) after revenues per available room (revpar) – a key industry measure – lifted 10% to £60.05 (€89).
The group, which also owns the Ladbrokes betting business, said profits in the six months to June 30 improved 72% to £189.7m (€282m), with the figure from the 400-strong hotels estate ahead almost 20% to £67.1m (€99.8m).
Ladbrokes Ireland Ltd employs more than 600 people in Ireland. The company's Irish operation was established in 1986 and has more than 120 betting shops across the country.
Hilton said the overall performance, which bettered City expectations, reflected a “steady recovery” for hotels and further strong growth at Ladbrokes, where profits rose 51% to £153.7m (€228.6m) after the introduction of more fixed odds betting terminals.
But, in the wake of three years of difficult trading – affected by external factors such as the Iraq war and the SARS virus – Hilton repeated earlier warnings that it would not be until next year that it would see a full recovery.
Chief executive David Michels said: “The recent increase in business and leisure traffic supports our view of a recovery in the hotel sector, although it is likely to be 2005 before the real benefits begin to flow.”
Hilton said the provincial market was not as buoyant as London, with the revpar increase of 3.4% in the regions contrasting with 17.2% in the capital.
Elsewhere, the group said travel patterns in Europe and Africa continued to be difficult to predict, with France among areas where trading had been challenging.
In the betting division, Ladbrokes benefited from a good run of results at events including the Cheltenham Festival, the Grand National and Euro 2004 as gross win – the amount left by punters after betting – rose 23% to £338m (€502.7m).
Fixed odds terminals accounted for 59% of the growth in the gross win as the average number of machines doubled on a year earlier to 4,363. The size of the estate increased by 24 to 1,899 shops and more sites opened on Sundays.
