Stakis surprises the City: pounds 10.4m profit and pounds 40m write-down better than expected

STAKIS yesterday delivered two surprises for investors, beating analysts' profit forecasts and making a smaller than expected pounds 40m write- down on the values of its 31 hotels and 21 casinos.

Pre-tax profits for the year to 3 October were pounds 10.4m against estimates of less than pounds 10m, while the 10 per cent write-down compared with predictions of up to pounds 50m.

Stakis shares gained 4p to 75p, a level last reached in 1990 when the group was being strangled by rising debts stemming from extensive acquisitions.

The profits for 1992/93 contrast starkly with the pounds 47m loss the year before, and analysts believe Stakis will continue to recover.

While David Michels, chief executive, remains cautious about prospects, he said: 'In the last three to four months there has been a slight and real improvement in hotels.'

Occupancy levels at the hotels, of which 18 are four star and the rest three star, improved from 64.7 to 68.5 per cent. That more than offset a fall in room rates of 60p to just under pounds 40 a night. 'The occupancy levels are reasonable in today's climate,' Mr Michels said.

Hotels also benefited from better use of their conference facilities, a reflection of greater spending by UK companies. Turnover was split 50:50 between business and leisure clients, a ratio Stakis would like to be 60:40.

More gamblers, and an increase in the average amount bet from pounds 116 to pounds 117 a visit, helped the casino business. Weekly attendances for all casinos rose by 1,000 to 36,000.

After returning to the dividend lists at the interim stage, Stakis is paying a final of 0.55p for a total payout of 1p, comfortably covered by earnings per share of 2.81p.

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