Upbeat Stakis raises pounds 9.4m: Hotel group goes shopping after dramatic revival under Sir Lewis Robertson

THE RECOVERY at Stakis was underlined yesterday when the hotels and casinos group raised pounds 9.4m through a share placing to help fund its first acquisition for three years.

About pounds 5.85m of the cash will be used to buy a 128-bed hotel in York, with the balance held to finance further acquisitions being planned by the new-look company.

Stakis's joint brokers, Smith New Court and Parson Penney, placed 18 million new ordinary shares for cash at 53.25p with existing institutional shareholders.

SNC said the placing was oversubscribed, though it would not say by how much. 'But we were very pleased the way this one went,' a member of SNC's corporate finance team said. The shares were down 1p at 55p.

The recent annual meeting approved a plan to go to the market with an additional 5 per cent of Stakis's 360 million shares. The company said there was no immediate intention to raise further funds.

Debts have been slashed from pounds 200m to pounds 110m following the sale of its nursing home business, Ashbourne Homes, and a pounds 28m rights issue in January. The company has a facility to increase borrowings by a further pounds 17m.

Stakis's new four-star York Hotel, bought out of receivership from Stoy Hayward, brings its total number of hotels to 31. It operates 18 casinos.

With about 800 UK hotels up for sale David Michels, Stakis's chief executive, said it was definitely a buyers' market, but only a fraction of these properties were worth looking at. Stakis had looked at hotels owned by Queens Moat Houses, the debt-laden group whose shares were suspended in April, but was 'nowhere near' making an offer.

The company was also interested in casinos, though there are fewer on the market, he said.

Evidence of Stakis's turnaround came last month when the Glasgow-based group resumed dividend payments and reported a half-time pre-tax profit of pounds 2.83m, compared with a pounds 3.39m loss a year earlier. The biggest improvement came from casinos, a division that 18 months ago was up for sale.

Sir Lewis Robertson, brought in as chairman two years ago, is credited with masterminding the strategy that has taken Stakis off the critical list. The shares have almost doubled in the past six months, and analysts are forecasting full-year profits of about pounds 9m.

However, none of this improvement is likely to be attributed to better economic conditions. 'Across the country we see no evidence of green shoots,' a Stakis spokesman said. 'We have managed to increase occupancy levels but have had to sacrifice room rates. The improvement is down to being a more efficient machine.'

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