Resort Hotels chief defends acquisition

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The Independent Online
RESORT HOTELS, which owns and manages provincial business hotels, warned yesterday that earnings could be diluted if it goes ahead with its planned acquisition of the County Resort Hotels chain.

The statement accompanied the announcement of an 11 per cent jump in pre-tax profits to pounds 3.25m for the six months to 31 October. Earnings per share fell 22 per cent to 2.8p.

Robert Feld, managing director, defended the acquisition of the County hotels, which would also increase gearing to about 50 per cent. Buying County, a BES scheme company, would remove the uncertainty which had dogged Resort's shares over the past year.

During 1992 they fell from a high of 99p to a low of just 16p, a drop the company blamed on a persistent small seller of shares. They ended yesterday at 40p, down 2p.

Since April, Resort has added more than 500 bedrooms to its portfolio, mainly in the form of management contracts. One of those brought Resort into the London market for the first time with a contract to run the 132- room Coburg Hotel.

Resort, which has expanded rapidly since floating on the USM in 1988, now owns or manages 54 properties with nearly 2,500 bedrooms. Occupancy rates remained at about 60 per cent and Resort achieved a small increase in room rates to an average of pounds 41 a night.

Turnover for the first half was 28 per cent higher at pounds 9.76m and the interim dividend is maintained at 1.2p.