Stakis back in the black with 2.8m pounds: Interim dividend restored but hotel group remains cautious about recovery

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STAKIS, the slimmed-down owner of 30 hotels and 18 casinos, is in profit and restoring interim dividend payments.

The group, which sold its Ashbourne nursing homes business and made a pounds 28m rights issue in January, made pounds 2.83m before tax for the half- year to 4 April.

The result, inflated by pounds 105,000 from an extra week's trading, compared with losses of pounds 3.39m for the same period last year and a pounds 47.4m deficit for the whole of 1991/2.

However, Sir Lewis Robertson, the company doctor who replaced the founding Sir Reo Stakis as chairman two years ago, remained cautious about overall prospects for economic recovery.

'Increasingly it now seems that such a recovery may be in prospect, though as yet more in sentiment and in confidence than in direct hotel occupancy or other tangible impact.

'When the recovery comes it must be reasonable to expect that such a group will be well placed to benefit from the favourable movements of wind and tide,' he said.

David Michels, chief executive, said the trading picture for hotels was mixed while for casinos there were a few 'green shoots in the South'.

Overall hotel occupancy levels rose from 58 to 63 per cent, which Stakis expects to reach 67 per cent by the year-end. Room rates remained under pressure, falling by pounds 1 to pounds 40.

Despite the lower rates, hotel operating margins improved from 14.5 to 19.3 per cent, helped by better returns from restaurants and revamped conference facilities.

Casinos benefited from a 3 per cent rise in the average spend per customer to pounds 115, and lifted operating profits from pounds 3.15m to pounds 5.4m. Attendances rose by 20,000 to nearly 1 million.

Total turnover moved ahead from pounds 62.3m to nearly pounds 65m, and operating profits from pounds 6.7m to pounds 11.2m.

The group pre-tax result was still burdened by high interest charges of pounds 9.96m, against pounds 11.76m, although the period enjoyed only a three-week benefit from the rights cash.

Shareholders, who forfeited a dividend for the first half of 1991/2, will receive an interim payment of 0.45p. Earnings per share were 0.84p, against losses of 1.24p last time.

Neil Chisman, finance director, said borrowings were going down with underlying cash flow positive by a 'few million pounds'. There was pounds 3m of capital spending in the first half.

The results were in line with analysts' expectations, and the shares held at 55p, which compares with January's rights price of 32p.