Pre-tax profits of pounds 10.4m were at the top end of forecasts and compare with the thumping pounds 47m loss in 1991/92 that forced Stakis into a radical re-think of its trading and financial structures.
Luck, appropriately enough, has played its part. Stakis nearly sold its casinos two years ago. The business is now generating plenty of cash which is being usefully applied to the group's hotels.
Capital expenditure will probably exceed pounds 11m this year but the group should still remain cash- positive. Gearing, even after yesterday's 10 per cent property write- down, is a manageable 45 per cent and the underlying trend is downwards.
On the trading front, Stakis has reported an increase in hotel occupancy levels from 64.7 to 68.5 per cent and suffered only a tiny decline in room rates to about pounds 40.
Casinos are also doing better. There was an increase in the number of punters, accompanied by a small rise in spend per head to pounds 117 for each visit.
While group profits are expected to top pounds 17m this year, the stock market will also look to Stakis to accelerate its recovery back to full corporate health via acquisitions.
The company certainly has the ammunition, in the form of a fully rated share price, to embark on the purchase trail. A p/e of about 17 is testimony to the pent-up demand that exists for Stakis' tightly held shares. Don't be put off by the high rating. The shares are worth buying.Reuse content