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 Cyclist in Russia narrowly misses being hit by car and lorry
- 2 'F*ck it, I quit': KTVA reporter Charlo Greene quits live on air in spectacular fashion
- 3 What are your fingerprint words?
- 4 Gary Lineker involved in Twitter row after presenter rubbishes claims he will be warned by BBC over foul-mouthed tweets
- 5 Pink Floyd new album: Band unveil cover art for first record in 20 years
Scotland could still declare independence – even without referendum, says Alex Salmond
Scottish referendum results: Cross-party consensus collapses amid Tory-Labour spat on the 'English question'
Hilary Mantel 'should be investigated by police' over Margaret Thatcher assassination story, says Lord Bell
Plebgate MP Andrew Mitchell called officer a 'little s**t', claim court documents 'exposing ex-Chief Whip's 'record of abusing police'
Archbishop of Canterbury admits doubts about existence of God
Labour Party conference: Ed Balls to set out plan to freeze child benefit to balance books
iJobs Money & Business
£65000 Per Annum Benefits + bonus: Clearwater People Solutions Ltd: If you are...
£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...
£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...
£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...