Forte plans surge in spending

BY JOHN SHEPHERD

Forte will spend an additional £500,000 a week this year on development and refurbishment to reinforce its dominant position in the UK hotel market, and take further advantage of the continuing recovery in the industry.

Capital expenditure of £147m in the year toJanuary, results for which were announced yesterday, will rise to £180m. About two-thirdswill be spent on refurbishment and up to £60m on development, largely opening more budget-priced TraveLodges.

Forte's results conformed to the general recovery and changing trends in the UK and US markets, and also showed that trading in northern Europe remains flat while hotels around the Mediterranean are performing much better.

Underlying group profits before tax improved from £77m to £127m, matching forecasts by most analysts, who areexpecting a result this year of between£185m and £200m.The dividend is being held at 7.5p, although analysts think that a small increase to 7.6p for 1995/96 is likely, with earnings per share predicted to improve from 10.1p to up to 15p.

Forte's share eased 5p to 235p, despite several hotel industry analysts underscoring buy recommendations for the stock. The fall was largely attributed toslightly cautious remarks by Forte on the strength of the recovery in spending by consumers in the UK.

The recently-knighted Sir Rocco Forte, chairman, said: "There was a good performance all round. London was particularly strong."

Increases in occupancy levels enabled Forte to push throughaggressive increases in room rates. Occupancy grew by 6 percentage points in London and international hotels, and by 5 points in the provinces.

Forte declined to break down the figures further. But Paul Slattery, analyst at Kleinwort Benson, reckons occupancies in London were about 83 per cent and the room rate had risen from £60.10p to £65 a night.

For the provincial hotels he put occupancies at 65.5 per cent, up from 61.2 per cent, and room rates at £41, up from £40. TraveLodge occupancy was, he added, about 79.5 per cent, down slightly from 80 per cent, but room rates improved from £27.20p to £28.

Sir Rocco said overseas hotels performed well, albeit from a low base. "There is significant room for improvement."

The recently-acquired Meridien chain had been integrated, withthe loss of only four management contracts in the US. "We have got Meridien under control. There were no surprises in the business."

Stripping costs out of Meridien is well under way, and the last remaining high-cost centre to be tackled is the company's former head office in Paris.Analysts believe that Forte has no need to call on shareholders to fund its developments.

Travel
travel
Sport
football
News
Tim Vine has won the funniest joke award at the Edinburgh Festival 2014
peopleTim Vine, winner of the Funniest Joke of the Fringe award, has nigh-on 200 in his act. So how are they conceived?
News
Jamie and Emily Pharro discovering their friend's prank
video
PROMOTED VIDEO
News
people
Arts and Entertainment
tv
Life and Style
techApp to start sending headlines, TV clips and ads to your phone
Arts and Entertainment
Taylor Swift crawls through the legs of twerking dancers in her 'Shake It Off' music video
musicEarl Sweatshirt thinks so
Life and Style
tech
Arts and Entertainment
Daniel Radcliffe and Zoe Kazan in What If
filmReview: Actor swaps Harry Potter for Cary Grant in What If
News
Our resilience to stress is to a large extent determined by our genes
science
Travel
travel
Sport
sportBesiktas 0 Arsenal 0: Champions League qualifying first-leg match ends in stalemate in Istanbul
News
Pornography is more accessible - and harder to avoid - than ever
news... but they still admit watching it
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Arts and Entertainment
The eyes have it: Kate Bush
musicKate Bush asks fans not to take photos at London gigs
News
i100
Extras
indybest
Sport
Manchester United are believed to have made a £15m bid for Marcos Rojo
sportWinger Nani returns to Lisbon for a season-long loan as part of deal
News
news
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Sales Performance Manager, Gloucester - £290 p/day

£200 - £290 per annum + competitive: Orgtel: Sales Performance Manager, Key Ba...

Junior Database developer (SQL, T-SQL, Excel, SSRS, Crystal rep

£25000 - £30000 per annum + bonus+benefits+package: Harrington Starr: Junior D...

Java/Calypso Developer

£600 - £800 per day: Harrington Starr: Java/Calypso Developer Java, Calypso, ...

Quantitative Developer

£700 per day: Harrington Starr: Quantitative Developer C++, Python, STL, R, PD...

Day In a Page

Ferguson: In the heartlands of America, a descent into madness

A descent into madness in America's heartlands

David Usborne arrived in Ferguson, Missouri to be greeted by a scene more redolent of Gaza and Afghanistan
BBC’s filming of raid at Sir Cliff’s home ‘may be result of corruption’

BBC faces corruption allegation over its Sir Cliff police raid coverage

Reporter’s relationship with police under scrutiny as DG is summoned by MPs to explain extensive live broadcast of swoop on singer’s home
Lauded therapist Harley Mille still in limbo as battle to stay in Britain drags on

Lauded therapist still in limbo as battle to stay in Britain drags on

Australian Harley Miller is as frustrated by court delays as she is with the idiosyncrasies of immigration law
Lewis Fry Richardson's weather forecasts changed the world. But could his predictions of war do the same?

Lewis Fry Richardson's weather forecasts changed the world...

But could his predictions of war do the same?
Kate Bush asks fans not to take photos at her London gigs: 'I want to have contact with the audience, not iPhones'

'I want to have contact with the audience, not iPhones'

Kate Bush asks fans not to take photos at her London gigs
Under-35s have rated gardening in their top five favourite leisure activities, but why?

Young at hort

Under-35s have rated gardening in their top five favourite leisure activities. But why are so many people are swapping sweaty clubs for leafy shrubs?
Tim Vine, winner of the Funniest Joke of the Fringe award: 'making a quip as funny as possible is an art'

Beyond a joke

Tim Vine, winner of the Funniest Joke of the Fringe award, has nigh-on 200 in his act. So how are they conceived?
The late Peter O'Toole shines in 'Katherine of Alexandria' despite illness

The late Peter O'Toole shines in 'Katherine of Alexandria' despite illness

Sadly though, the Lawrence of Arabia star is not around to lend his own critique
Wicken Fen in Cambridgeshire: The joy of camping in a wetland nature reserve and sleeping under the stars

A wild night out

Wicken Fen in Cambridgeshire offers a rare chance to camp in a wetland nature reserve
Comic Sans for Cancer exhibition: It’s the font that’s openly ridiculed for its jaunty style, but figures of fun have their fans

Comic Sans for Cancer exhibition

It’s the font that’s openly ridiculed for its jaunty style, but figures of fun have their fans
Besiktas vs Arsenal: Five things we learnt from the Champions League first-leg tie

Besiktas vs Arsenal

Five things we learnt from the Champions League first-leg tie
Rory McIlroy a smash hit on the US talk show circuit

Rory McIlroy a smash hit on the US talk show circuit

As the Northern Irishman prepares for the Barclays, he finds time to appear on TV in the States, where he’s now such a global superstar that he needs no introduction
Boy racer Max Verstappen stays relaxed over step up to Formula One

Boy racer Max Verstappen stays relaxed over step up to F1

The 16-year-old will become the sport’s youngest-ever driver when he makes his debut for Toro Rosso next season
Fear brings the enemies of Isis together at last

Fear brings the enemies of Isis together at last

But belated attempts to unite will be to no avail if the Sunni caliphate remains strong in Syria, says Patrick Cockburn
Charlie Gilmour: 'I wondered if I would end up killing myself in jail'

Charlie Gilmour: 'I wondered if I'd end up killing myself in jail'

Following last week's report on prison suicides, the former inmate asks how much progress we have made in the 50 years since the abolition of capital punishment