Millennium shares jump after upbeat forecast

Millennium & Copthorne, the high-class hotel chain, yesterday saw its shares soar after it predicted that business would pick up sharply in the course of the year.

Millennium & Copthorne, the high-class hotel chain, yesterday saw its shares soar after it predicted that business would pick up sharply in the course of the year.

The upbeat prediction was particularly welcome as the company said profit for the second half of last year had almost been wiped out after the 11 September terrorist attacks.

This followed a profit warning in November about the disastrous effect of the attacks on hotels in major cities. Millennium suffered a slump in pre-tax profits to £54m in the 12 months to 31 December from £129m a year earlier. Total sales slipped to £595m from £691m.

Millennium joined rivals such as Hilton to say that the picture improved towards the end of the year. The company said: "We are seeing significant volume improvement in New York and some improvement in London." It predicted profits in 2002 would be ahead of 2001.

Millennium, which owns half of the Plaza in New York, is hiring 100 new hotel staff to service a pick-up in demand in markets including New York City and London, where it has five hotels. In November, the company cut 500 jobs across the US and Europe to counter slowing demand.

The upturn since the turn of the year has driven Millennium's shares up 20 per cent this year, outpacing Hilton, which has gained 14 per cent. Yesterday shares in Millennium jumped 26p to 331p, their highest level since 10 September.

While the signs were positive, market conditions were still challenging, according to the company.

In the first two months of 2002, revenue per room, the industry's key measure of profitability, was down 17 per cent in the US. Kwek Leng Beng, Millennium's chairman, said: "While we are encouraged by signs of improvement in our markets it is still difficult to predict the pace of recovery."