The Investment Column: Thistle axes 30 provincial hotels

THISTLE HOTELS is a prime example of how not to float on the stock market. Ever since the group came to the market in October 1996, it has proved a huge disappointment. Not only did it commit the cardinal sin for a newly quoted group by consistently missing analysts' profit forecasts, but it has continued to lag behind its peers in the hotel sector.

Robert Peel, the group's embattled chief executive, paid the penalty by getting the boot last autumn. Although he can hardly grumble at a pounds 700,000 pay-off.

With Mr Peel out of the way, Thistle has decided to take the sword to its hotel estate. Thirty provincial hotels are to go, with the pounds 100m or so proceeds pumped back into its London four-star hotel estate. The group has also launched a shake up of its hotel management team and a long-overdue upgrade of the group's information technology systems. And another pounds 50m will be spent this year sprucing up its tired hotels.

These are all sensible moves and there is plenty of scope to drive room rates forward by concentrating on the corporate market rather than tourists. After all, the only advantage of under performing peers for the last few years is it gives greater potential to improve earnings in the future. But Thistle will have to start showing it can move room yields forward much more quickly than it has demonstrated in the past to calm investors' frayed nerves.

The City's concerns were demonstrated clearly yesterday when the shares fell 9p to 181.5p even though Thistle announced a 34 per cent rise in pre-tax profits to pounds 80.6m in 1997. However, the hotel market is likely to remain buoyant for the foreseeable future, and analysts forecast current year profits of around pounds 95m-pounds 96m, putting the shares on a prospective p/e ratio of 14.

It is too early to say if Thistle has turned the corner but at least it appears to be moving in the right direction and a new chief executive should be appointed imminently. Fairly priced.

Emma Watson has become the latest target of the 4Chan nude hacking scandal
peopleThreats follows actress' speech on feminism and equality at the UN
Life and Style
food + drink
Arts and Entertainment
British actor Idris Elba is also a DJ and rapper who played Ibiza last summer
Life and Style
ebooksAn unforgettable anthology of contemporary reportage
Life and Style
Life and Style
Alan Turing, who was convicted of gross indecency in 1952, was granted a royal pardon last year
Arts and Entertainment
Sheridan Smith as Cilla Black and Ed Stoppard as her manager Brian Epstein
tvCilla Episode 2 review: Grit under the glamour in part two of biopic series starring Sheridan Smith
Life and Style
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs Money & Business

IT Project manager - Web E-commerce

£65000 Per Annum Benefits + bonus: Clearwater People Solutions Ltd: If you are...

Trainee / Experienced Recruitment Consultants

£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...

Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Day In a Page

Secret politics of the weekly shop

The politics of the weekly shop

New app reveals political leanings of food companies
Beam me up, Scottie!

Beam me up, Scottie!

Celebrity Trekkies from Alex Salmond to Barack Obama
Beware Wet Paint: The ICA's latest ambitious exhibition

Beware Wet Paint

The ICA's latest ambitious exhibition
Pink Floyd have produced some of rock's greatest ever album covers

Pink Floyd have produced some of rock's greatest ever album covers

Can 'The Endless River' carry on the tradition?
Sanctuary for the suicidal

Sanctuary for the suicidal

One mother's story of how London charity Maytree helped her son with his depression
A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits