Savoy to pay off Sheppard

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The Independent Online
Giles Sheppard is to receive more than £500,000 in compensation following his resignation as managing director of the Savoy Hotel group last September.

His abrupt departure came soon after he made an attack on Sir Michael Richardson, a non-executive director who was widely tipped at the time as a successor to Sir Anthony Tuke, the chairman.

Mr Sheppard had also become isolated in the boardroom by his continued opposition to Forte Hotel group's aspirations to take management control of the Savoy chain. Day-to-day control at the group is now strongly influenced by Forte, the company's largest shareholder.

Negotiations are also understood to be taking place over compensation for Rowland Leigh, who left as finance director earlier this year.

The compensation payment for Mr Sheppard was disclosed yesterday alongside Savoy's results for 1994, which benefited from a sharp increase in visitors to London. Profits before tax rose from £725,000 to £4.23m, with turnover advancing from £83.3m to £92.1m. The result also benefited from rate rebates amounting to £1.2m. Ramon Pajares, managing director, said second-half trading was "very good", but the first two months of this year had been flat. Despite the slack opening to 1995, he said March was better and "we are expecting after Easter that things will be better than last year".

The results were accompanied by a full restoration of dividend payments to 1993 levels following the halved payments last year. The dividend on the `A' share is restoredto 7p and on the `B'to 3.5p.

Analysts were critical of the move, saying that the company would be better off re-investing the £1m extra that the dividend payment will cost.

Mr Pajares said spending would rise to between £10m and £12m this year as the group focuses on getting the basics right. He added: "One never builds a house from the roof, but from the foundations. We have to make sure the product is right, and then the customers will come. I think that effort is starting to come through."

He hopes that talks with three separate parties over the sale of the Lancaster in Paris will soon be concluded. The potential buyers are all understood to be French, and the hotel, which is small, will fetch around £10m.