New hotel group set for buying binge

Millennium & Copthorne, the recently floated hotel company, yesterday signalled a buying spree, saying it was prepared to spend up to pounds 150m on hotels to add to its portfolio of 23 properties in London, New York and Continental Europe.

Edouard Gremlich, chief executive, said the company had looked hard at the Exclusive chain of hotels being sold by Granada but had decided the asking price was too high. He admitted that in London especially the buoyancy of the hotel market was making it difficult to find sensibly priced targets.

Mr Gremlich said he was considering 12 separate portfolios of hotels. While an announcement was not imminent, he said Millennium was able to close any deal quickly with lines of credit already in place.

Details of the company's acquisitive plans accompanied maiden interim figures since the company came to the market in April. On a pro forma basis, which assumes that Millennium owned its full portfolio for both the first six months of this year and the comparable period in 1995 (when it actually had only three hotels), sales showed an 11 per cent rise, operating profits advanced 31 per cent and pre-tax profits jumped 53 per cent to pounds 15m.

There was strong growth in sales and profits in all three of the company's main trading areas - London, New York and the UK provinces. Average room rates increased in all three regions, dragging up the yield per available room by 10 per cent on average.

A dividend of 0.7p a share was recommended with the promise that the interim payment would normally represent one-third of the full-year dividend. Millennium's shares, which floated at 278p and rose to a high in May of 344p, closed yesterday 7p ahead at 312p.

The hotels boom, which has brought a raft of new issues to the market in the sector and been characterised by soaring occupancy rates, is set to continue for another couple of years, according to a recent survey of the industry by analysts at Kleinwort Benson.