Hilton to buck sector's gloomy trend

0 Comments | Sunday Herald, The, Aug 26, 2001 | by John Phelps

GAMING and hotels group Hilton, which has bought Edinburgh's Caledonian Hotel last year and also includes the old Stakis chain, could lighten some of the gloom surrounding the hospitality sector with news of surprisingly buoyant profits.

Mark Finnie, at the Edinburgh branch of Deutsche Bank, has broken away from the pack of analysts following the company to predict a 25% increase in underlying half-year profits to around (pounds) 136 million on Thursday - well ahead of other expectations of around (pounds) 130m.

"I believe the company has done exceptionally well, particularly in view of foot-and-mouth, and am a buyer of the shares in anticipation of further progress," he said.

The figures will take little account of the group's (pounds) 612m purchase of Scandic Hotels in April but will show further integration benefits from Stakis and increasing returns from internet gaming. It will also show that the company's decision to offload part of its property portfolio to fund further hotel building and acquisitions has been a shrewd move in the current climate. The group makes about one-third of its profits from its Ladbrokes gambling operation and is looking to see big gains from a recent link with Sky Sports to provide interactive services (if the deal receives regulatory approval).

In contrast, few are expecting anything too exciting from Millennium & Copthorne Hotels, when it reports its interim results on Friday following cautionary remarks from chairman Kwek Leng Beng.

Despite its expansion programme which now sees it with 88 hotels in major cities - including branches in Aberdeen and Glasgow - most analysts expect profits before tax to dip from (pounds) 53.6m to around (pounds) 48m.::::::::::::::smt26p2learning::::::::::::::