Copthorne's rates have room to grow

The Investment Column

The hotels sector has been under a cloud recently due to the City's concerns over growth in capacity and the effects of the strong pound on overseas visitor levels to London.

But while these reservations have hit shares, the operators themselves have stayed jolly about prospects. Stakis reported good figures last month and yesterday Millennium & Copthorne did the same.

The 24-strong hotels group, which has proved to be one of the best of last year's crop of new issues, enjoyed a 53 per cent increase in pre- tax profits to pounds 19.9m in the six months to June.

On a pro forma basis, which assumes the group owned its New York hotels for the whole of the previous year, operating profits rose 37 per cent to pounds 27.3m.

The figures are particularly impressive as they include pounds 1m of closure costs for the Commodore hotel in Paris, which will undergo a nine-month revamp.

So far Copthorne seems to be shrugging off the worries of the sector's doomsters.

Finance director David Cook says that as 75 per cent of its customers are business travellers, the strength of the pound has a limited effect. And 60 per cent of visitors to its London hotels come from the UK.

Copthorne disagrees with reports that suggest an additional 10,000 beds are coming on stream in the UK over the next few years and says most of the additional capacity will be in the peripheral areas of London rather than in the centre of the capital.

Occupancy on a pro forma basis increased by 3 percentage points to a healthy 76.9 per cent, which provides limited headroom. But the upside is that the group is able to increase room rates, with the average rising by 5 per cent to pounds 80.70.

Expect more rate hikes and some selective acquisitions from the new managing director, John O'Shea.

On upgraded forecasts of pounds 48.5m for the full year, the shares trade on a forward rating of 15.

At 378.5p, up 10p yesterday and a full 100p on the 278p issue price last April, the shares are worth a look.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Investment Analyst

£25000 - £30000 per annum: Recruitment Genius: This leading provider of financ...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Are you looking to take your ...

SThree: Trainee Recruitment Consultant

£20000 - £40000 per annum + competitive: SThree: Exciting career prospect for ...

Ashdown Group: Trainee Consultant - Surrey / South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Day In a Page

A groundbreaking study of 'Britain's Atlantis' long buried at the bottom of the North Sea could revolutionise how we see our prehistoric past

Britain's Atlantis

Scientific study beneath North Sea could revolutionise how we see the past
The Queen has 'done and said nothing that anybody will remember,' says Starkey

The Queen has 'done and said nothing that anybody will remember'

David Starkey's assessment
Oliver Sacks said his life has been 'an enormous privilege and adventure'

'An enormous privilege and adventure'

Oliver Sacks writing about his life
'Gibraltar is British, and it is going to stay British forever'

'Gibraltar is British, and it is going to stay British forever'

The Rock's Chief Minister hits back at Spanish government's 'lies'
Britain is still addicted to 'dirty coal'

Britain still addicted to 'dirty' coal

Biggest energy suppliers are more dependent on fossil fuel than a decade ago
Orthorexia nervosa: How becoming obsessed with healthy eating can lead to malnutrition

Orthorexia nervosa

How becoming obsessed with healthy eating can lead to malnutrition
Lady Chatterley is not obscene, says TV director

Lady Chatterley’s Lover

Director Jed Mercurio on why DH Lawrence's novel 'is not an obscene story'
Farmers in tropical forests are training ants to kill off bigger pests

Set a pest to catch a pest

Farmers in tropical forests are training ants to kill off bigger pests
Mexico: A culture that celebrates darkness as an essential part of life

The dark side of Mexico

A culture that celebrates darkness as an essential part of life
Being sexually assaulted was not your fault, Chrissie Hynde. Don't tell other victims it was theirs

Being sexually assaulted was not your fault, Chrissie Hynde

Please don't tell other victims it was theirs
A nap a day could save your life - and here's why

A nap a day could save your life

A midday nap is 'associated with reduced blood pressure'
If men are so obsessed by sex, why do they clam up when confronted with the grisly realities?

If men are so obsessed by sex...

...why do they clam up when confronted with the grisly realities?
The comedy titans of Avalon on their attempt to save BBC3

Jon Thoday and Richard Allen-Turner

The comedy titans of Avalon on their attempt to save BBC3
The bathing machine is back... but with a difference

Rolling in the deep

The bathing machine is back but with a difference
Part-privatised tests, new age limits, driverless cars: Tories plot motoring revolution

Conservatives plot a motoring revolution

Draft report reveals biggest reform to regulations since driving test introduced in 1935