Stock Market Week: Granada plays a waiting game on sales as hotel business perks up

When Granada emerged victorious from the rip-roaring pounds 3.9bn battle for control of the Forte catering and hotel empire, a stampede to sell unwanted assets was confidently expected.

After all, it was reasoned, Granada needed to cut its debt mountain as quickly as possible and would be forced to hack away at Forte.

Nearly five months later and the leisure group has still to indulge in a rush of deals. Helped, no doubt, by low interest rates, it has demonstrated the wisdom of playing a waiting game.

So far the only big disposal has been the sale of 60 of the smaller hotels under the White Hart banner to Regal Hotels for pounds 121.7m. During the battle Regal had got near to doing a deal with Forte but with Granada in command it was forced to renegotiate and come away with a slightly changed package which looked less favourable than what had been originally agreed.

The motorway service areas, which were expected to be the first to go, remain in Granada's fold; so do the Exclusive and Meridien hotels, which had looked early candidates for the chop.

Indeed chairman Gerry Robinson's more recent pronouncements suggest Granada could be falling in love with what is a glamorous but not always rewarding industry.

He still intends to sell the Exclusive trophy hotels but in a remarkable somersault is, at least for the time being, keeping the Meridien portfolio. In the heat of battle Mr Robinson promised to unload both chains.

He also said Forte's Savoy Hotel and Alpha Airports stakes would go. They too remain on Granada's books.

With the hotel industry enjoying its best season for many years, Mr Robinson's reluctance to rush into sales is understandable. He could, however, be near to clinching some of the Exclusive deals, although Sir Rocco Forte, the former Forte chief who plans to start a Forte Mark II hotel empire, is thought unlikely to still be in the running.

It is possible - just - that Granada will have details of hotel sales when it delivers its interim results on Wednesday. It should be able to give an indication of whether Exclusive sales are near, if not details of disposals

Interim profits, with a first-time Forte contribution, could approach pounds 200m with the Forte hotels chipping in pounds 30m.

Granada's shares have had a strong run, outstripping the market and prompting some to ponder the surely remote possibility that it could be contemplating another major swoop - there is even talk of a Pearson bid.

Thorn EMI will also star this week - for the last time. Tomorrow Sir Colin Southgate, chairman, will produce the final, final figures of the rental to showbiz group - showing a heady pounds 100m or so jump to, say, pounds 525m.

But that should be only the start of the music. Sir Colin, who announced in February that Thorn intended to join the demerger fashion by dividing into two standalone companies, will also provide details of the splits. A few days later the demerger will start in earnest with an investment presentation for the music side.

The break-up should be final in August with share dealings in the two companies, if all goes according to plan, starting on the 19th. Estimates of the group's value stretch from pounds 19 to pounds 23 per share. But a takeover bid could dramatically change the calculations. Many are forecasting a relatively short independence for the music division. Predators, goes the conventional wisdom, are just waiting to descend on the sexy music company, with Disney among the front runners.

Until the much-stronger-than-expected US payroll figures sent shares spinning on Friday, last week had been quiet and uneventful for the market. But the prospect of higher US interest rates so soon after the latest Kenneth Clarke cut had Footsie in ragged retreat. It will take a great deal of home-produced excitement - and there is a raft of Whitehall statistics which could offer encouragement - to overcome the US stunner and help shares to meet the more bullish predictions which circulate.

Utilities again feature loudly in the week's results. East Midlands is the first of the electricity groups to report year's profits after the first of Professor Stephen Littlechild's regulatory reviews and it will be intriguing to see how it has been influenced. There is also the complication of the sale of its shares in National Grid.

Profit forecasts, therefore, are spread wide. Greig Middleton is top of the range, shooting for pounds 210.9m; NatWest Securities is on pounds 202.2m and UBS brings up the rear with pounds 172.1m. Last year's figure was pounds 214m.

Two dairy groups are in the reporting parade. Both are suffering from the decline in the support the average family now offers its daily milkman and from the BSE disaster.

Yet Unigate, today, is expected to more than double profits to pounds 121.5m and if the proceeds of the sale of its third share of Nutricia, the Dutch baby food maker, are taken into account the figure will be around pounds 341.5m.

After the Nutricia sale, Unigate's cash hoard should be pounds 150m. A further pounds 42m came in last week from the disposal of part of its US restaurant operations.

With such riches, acquisitions must be on the cards. If not, then Unigate should indulge in a shareholder-friendly special dividend.

The group has benefited from favourable commodity prices and bedding down acquisitions. But BSE has taken its toll on the shares.

Northern Foods, tomorrow, will also display a spectacular advance - from pounds 27.9m to pounds 125m. Last year's figures were devastated by provisions. Its shares have also suffered from BSE but Alan Erskine at NatWest says: "The prospect of a cattle cull sufficient to impact on UK milk supply has receded. Throw into the equation the benefits of a chastened and more realistic management team and it's possible (just) to argue the shares are fairly valued."

Sport
Luis Suarez and Lionel Messi during Barcelona training in August
footballPete Jenson co-ghost wrote Suarez’s autobiography and reveals how desperate he's been to return
News
newsMcKamey Manor says 'there is no escape until the tour is completed'
Voices
Hunted: A stag lies dead on Jura, where David Cameron holidays and has himself stalked deer
voicesThe Scotland I know is becoming a playground for the rich
News
people
PROMOTED VIDEO
Arts and Entertainment
Architect Frank Gehry is regarded by many as the most important architect of the modern era
arts + entsGehry has declared that 98 per cent of modern architecture is "s**t"
Money
Welcome to tinsel town: retailers such as Selfridges will be Santa's little helpers this Christmas, working hard to persuade shoppers to stock up on gifts
news
Arts and Entertainment
Soul singer Sam Smith cleared up at the Mobo awards this week
newsSam Smith’s Mobo triumph is just the latest example of a trend
News
Laurence Easeman and Russell Brand
people
News
ebooksAn unforgettable anthology of contemporary reportage
Sport
Fans of Dulwich Hamlet FC at their ground Champion Hill
footballFans are rejecting the £2,000 season tickets, officious stewarding, and airline-stadium sponsorship
News
Shami Chakrabarti
people
Arts and Entertainment
Benedict Cumberbatch has refused to deny his involvement in the upcoming new Star Wars film
filmBenedict Cumberbatch reignites Star Wars 7 rumours
Sport
football
News
news
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Compensation and Benefits Manager - Brentwood - Circa £60,000

£60000 per annum: Ashdown Group: Compensation and Benefits Manager - Compensat...

Data Analyst/Planning and Performance – Surrey – Up to £35k

£30000 - £35000 Per Annum plus excellent benefits: Clearwater People Solutions...

IT Systems Business Analyst - Watford - £28k + bonus + benefits

£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...

Markit EDM (CADIS) Developer

£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...

Day In a Page

Wilko Johnson, now the bad news: musician splits with manager after police investigate assault claims

Wilko Johnson, now the bad news

Former Dr Feelgood splits with manager after police investigate assault claims
Mark Udall: The Democrat Senator with a fight on his hands ahead of the US midterm elections

Mark Udall: The Democrat Senator with a fight on his hands

The Senator for Colorado is for gay rights, for abortion rights – and in the Republicans’ sights as they threaten to take control of the Senate next month
New discoveries show more contact between far-flung prehistoric humans than had been thought

New discoveries show more contact between far-flung prehistoric humans than had been thought

Evidence found of contact between Easter Islanders and South America
Cerys Matthews reveals how her uncle taped 150 interviews for a biography of Dylan Thomas

Cerys Matthews on Dylan Thomas

The singer reveals how her uncle taped 150 interviews for a biography of the famous Welsh poet
DIY is not fun and we've finally realised this as a nation

Homebase closures: 'DIY is not fun'

Homebase has announced the closure of one in four of its stores. Nick Harding, who never did know his awl from his elbow, is glad to see the back of DIY
The Battle of the Five Armies: Air New Zealand releases new Hobbit-inspired in-flight video

Air New Zealand's wizard in-flight video

The airline has released a new Hobbit-inspired clip dubbed "The most epic safety video ever made"
Pumpkin spice is the flavour of the month - but can you stomach the sweetness?

Pumpkin spice is the flavour of the month

The combination of cinnamon, clove, nutmeg (and no actual pumpkin), now flavours everything from lattes to cream cheese in the US
11 best sonic skincare brushes

11 best sonic skincare brushes

Forget the flannel - take skincare to the next level by using your favourite cleanser with a sonic facial brush
Paul Scholes column: I'm not worried about Manchester United's defence - Chelsea test can be the making of Phil Jones and Marcos Rojo

Paul Scholes column

I'm not worried about Manchester United's defence - Chelsea test can be the making of Jones and Rojo
Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

While other sports are stalked by corruption, we are an easy target for the critics
Jamie Roberts exclusive interview: 'I'm a man of my word – I'll stay in Paris'

Jamie Roberts: 'I'm a man of my word – I'll stay in Paris'

Wales centre says he’s not coming home but is looking to establish himself at Racing Métro
How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?

A crime that reveals London's dark heart

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?
Meet 'Porridge' and 'Vampire': Chinese state TV is offering advice for citizens picking a Western moniker

Lost in translation: Western monikers

Chinese state TV is offering advice for citizens picking a Western moniker. Simon Usborne, who met a 'Porridge' and a 'Vampire' while in China, can see the problem
Handy hacks that make life easier: New book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone

Handy hacks that make life easier

New book reveals how to rid your email inbox of spam, protect your passwords and amplify your iPhone with a loo-roll
KidZania lets children try their hands at being a firefighter, doctor or factory worker for the day

KidZania: It's a small world

The new 'educational entertainment experience' in London's Shepherd's Bush will allow children to try out the jobs that are usually undertaken by adults, including firefighter, doctor or factory worker