Scottish Hotels presses ahead: The Investment Column
Wednesday 30 October 1996
With six hotels in Scotland's central belt and only 525 bedrooms, Scottish is small even by the standards of the overpopulated, fragmented hotel sector. Its biggest challenge will have been persuading investors that it has anything different to offer but sources close to the float say the placing, to raise pounds 13m, was twice subscribed.
At the placing price, Scottish will be valued at pounds 30.4m, just 12.4 times post-tax earnings, making it one of the most cautiously priced issues. The company said it would have paid a full-year dividend of 3p, representing a gross yield of 3 per cent.
The former fiefdom of the Fimmers family, which remains a sizeable shareholder, the company fell on hard times in the recession and management control was relinquished to the professional operations team who had previously reported to the family. Hamish Grossart was brought in as chairman.
They transformed the company from a family plaything to a more focused business venture and since 1993, operating margins have risen from 21 per cent to a forecast of more than 30 per cent in the year ending tomorrow.
Profits for the period just closing are estimated at not less than pounds 2.1m from sales of pounds 16.5m, up from the pounds 1.4m recorded last year before a one- off chunky exceptional gain that distorted the reported figure. Back in 1993, profits of only pounds 242,000 were made from sales of pounds 14.9m.
When dealings start on 11 November, Scottish should get off to a healthy start. Thereafter it will have to take its chances in a seriously overcrowded market.
- 1 The BBC has just done more to eradicate ‘terrorism’ than all our wars since 9/11
- 2 Dog thinks owner is drowning in lake, dives in and tries to pull him out
- 4 Chilling drone footage captures Auschwitz ahead of 70th anniversary of liberation
Auschwitz liberation 70th anniversary: Woman sent to three Nazi death camps describes surviving gas chamber
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
Greece elections: Greek PM Alexis Tsipras takes aim at 'neo-liberal' Europe as country gears up for prolonged austerity battle
Pornhub star Mia Khalifa receives death threats after being ranked the site's top adult actress
Prince Philip set to be knighted by Australia: Celebrate by reading his greatest gaffes
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
French court convicts three over homophobic tweets, in case hailed as a 'significant victory' by LGBT rights campaigners
Greece elections: Syriza and EU on collision course after election win for left-wing party
British Muslim school children suffering a backlash of abuse following Paris attacks
Islamic history is full of free thinkers - but recent attempts to suppress critical thought are verging on the absurd
Leaked documents show Ukip leaders approve NHS privatisation once it becomes more 'acceptable to the electorate'
iJobs Money & Business
£30000 - £32000 per annum + benefits : Ashdown Group: A highly successful, int...
£18000 - £20000 per annum: Recruitment Genius: This rapidly expanding business...
£25 - 28k + Bonus: Guru Careers: An In-house / Internal Recruiter is needed to...
Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...