The Investment Column: M&C books in a 30% profits rise
Tuesday 03 March 1998
Last year some analysts were concerned that the hotel boom would soon run out of steam. In London the prospect of 10,000 new rooms threatened to swamp the market. But while it is true the market will struggle to maintain the heady growth levels of the last few years, there are still no signs of the huge increase in hotel capacity that caused the industry's downfall in the late 1980s. And the millennium celebrations will give the sector a further boost next year.
Not that M&C has to rely on the hotel cycle for further growth. Typically, the group is getting a 15 per cent return from its refurbishment programme within 12 months. Its move into conferencing and the business market is a successful strategy and a tight control on costs is continuing to help margins.
However, M&C will find it harder to increase occupancy rates, which are already very strong. To maintain its growth rate into the next century it will have to look for acquisitions. It is eyeing up targets in Europe and North America. Both its Millennium four star hotels and Copthorne mid-market brands have great potential overseas. But any sizeable deal would probably require the group to issue new equity.
Charterhouse Tilney forecasts current year profits of pounds 59.5m putting the shares on a prospective p/e ratio of 17. It is not time to check out of the shares. Under the new leadership of John Wilson, the highly respected former head of Hilton International, the group promises much. But at this price there is little room for disappointment and the stock looks about right for now.
- 1 Howard Jacobson: Let's see the 'criticism' of Israel for what it really is
- 3 Belgium fan Axelle Despiegelaere lands L'Oreal campaign after World Cup viral photo
- 4 Britney Spears sings 'Alien' without Auto-Tune in embarrassing leaked audio clip
- 5 PornHub begs users to stop uploading video clips of Brazil getting beaten 7-1
Instagram of US airport security chiefs: Lipstick knives and IED training kits among items seized
Game of Thrones author George RR Martin says 'f*** you' to fans who fear he will die before finishing Westeros saga
Mick Jagger denies being World Cup curse and reason for Brazil’s embarrassing defeat
Israel-Gaza crisis: ‘We just want it to end… We don’t deserve to live like this’
Israel-Gaza crisis: Eight killed in Gaza Strip cafe while watching World Cup semi-final
Sustained immigration has not harmed Britons' employment, say government advisers
Australia facing international condemnation after turning around Sri Lankans at sea
7/7 memorial defaced on anniversary of 2005 attacks with ‘Blair lied thousands died’ graffiti
Even when it brutalises one of its own teenage citizens, America is helpless against Israel
Socialist Worker called to apologise over ‘vile’ article saying Eton schoolboy Horatio Chapple's death is ‘reason to save the polar bears’
There’s a nasty smell in the political air – and it’s coming from the Tories
iJobs Money & Business
Negotiable: Randstad Education Birmingham: Randstad Education are seeking a Fi...
£12 - £15 per hour: Cameron Kennedy Recruitment: Excellent opportunity to join...
£400 per hour: Orgtel: Technical Business Analyst - Banking - Bristol - £400pd...
£38000 - £42000 per annum + competitive: Real Staffing: Required skills:Previo...