Granada reveals timetable for disposals

Granada has given itself 15 months to sell pounds 1.5bn worth of unwanted assets inherited from its pounds 3.9bn takeover of Forte, Gerry Robinson, Granada's chairman, said yesterday.

The disposal programme, which includes pounds 1bn worth of Exclusive hotels, a stake in the Savoy Group, and about pounds 300m for the Welcome motorway service stations, would bring gearing down to about 100 per cent from the currently high 389 per cent.

Charles Allen, chief executive, said the disposal timetable had been received positively by shareholders. "They share our confidence and frankly are quite comfortable," he said, unveiling Granada's first set of interim figures since the Forte victory.

Pre-tax profits were up a solid 19 per cent to pounds 183m, on turnover ahead 35 per cent to pounds 1.5bn. All main operating units, including media, rentals and the restaurants business, showed gains, fuelled by tighter margins and early benefits from the bringing together of the Granada and Forte assets.

"Forte is showing us very clearly that it can and will fulfil our expectations for increased profit," Mr Robinson said. During the acrimonious takeover battle, Granada promised to increase the profitability of Forte by pounds 100m a year, and Mr Robinson claimed the company was already on track to do so.

Restaurants and services saw profit growth of 46 per cent to pounds 62.3m year- on-year, on the strength of the Little Chef acquisition from Forte, a new menu with higher charges and the introduction of new formats at roadside and motorway service areas. Spending per head has risen by about 7 per cent since the new menu was introduced in late April.

Catering services saw growth in turnover of about 14 per cent, as profits climbed 27 per cent to pounds 26m. The rentals division managed paltry growth of about 5 per cent, underscoring the lacklustre nature of what is a declining business in the UK.

On the disposal programme, Mr Allen said the 68 per cent stake in the Savoy would be sold "in co-operation with management". A Granada insider suggested a sale could be several months away. A 25 per cent stake in the Alpha airport catering services operations could be sold within a few weeks, however, to a trade buyer interested in mounting a bid for the entire company.

City interest has been directed toward the Welcome Break motorway services, which could generate as much as pounds 300m. The operations had been provisionally sold to Whitbread, the beer and catering giant, during the takeover battle. Granada is currently in talks with Whitbread that could lead to a deal, but both sides caution it could take some time.

Granada is seeking legal advice on whether it can overturn a "lock-out" clause in the provisional deal between Whitbread and Forte, which gave Whitbread a share in any profits above an agreed figure in the event the sites were sold to a third party. That clause runs out in December. "We are of course open to a deal before then," a Granada source said. "But if nothing happens by December, I think we might be able to generate further interest from other buyers."

The group of 17 Exclusive hotels will probably go to four or five buyers, the company said. Sales memoranda have been sent to 75 applicants who have pre-qualified. They will be invited to look at confidential information prior to an auction.

Up for grabs are hotels such as the Grosvenor House in London, which had profits in the most recent financial year of about pounds 20m, and could sell for as much as pounds 300m.

Granada intends to keep the Meridien hotels, although a sale later has not been ruled out.

The rest of the Forte hotels, principally the Posthouse, Crest, Heritage and Travelodge properties will be kept. Granada is currently rebranding the hotels, and has set up three main divisions - international, UK provincial and London. Mr Allen said the London properties were being marketed "almost as a single hotel," allowing joint promotion.

Start your day with The Independent, sign up for daily news emails
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant - Swiss Banking and Finance

£20000 - £25000 per annum + Uncapped commission: SThree: Can you speak German,...

Ashdown Group: Marketing Executive - 6 month FTC - Central London

£25000 - £30000 per annum + benefits: Ashdown Group: An exciting opportunity f...

Ashdown Group: Junior Project Manager (website, web application) - Agile

£215 per day: Ashdown Group: Junior Project Manager (website, web application ...

Guru Careers: Software Engineer / Software Developer

£40-50K: Guru Careers: We are seeking an experienced Software Engineer / Softw...

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before