|
Bass drinks up profit gain
|
 |
December 7, 2000: 10:57 a.m. ET
U.K. hotel group, shaking up pub lineup, beats forecasts with $1.1B profit
|
LONDON (CNNfn) - Bass PLC, the world's second-largest hotels operator, reported Thursday its annual pretax earnings rose 19 percent, at the high end of analysts' forecasts, and vowed to use the proceeds of a recent disposal to boost shareholder value.
The U.K.-based company, which is behind the Inter-Continental, Crowne Plaza and Holiday Inn hotel chains, earned profit before tax and one-time items of £756 million ($1.1 billion) in the fiscal year ended Sept. 30. Analysts forecasts ranged from £735 million to £755 million, according to a Reuters poll.
Revenues rose 23 percent to £3.78 billion.
"Against the industry, we've performed very well," said Bass Chairman Ian Prosser in an interview with CNN.
Shares in London-based Bass (BASS) were up 3.9 percent, or 26 pence, at 697.5 pence, making it one of the top advancers on the FTSE 100 Thursday afternoon. The stock had fallen sharply earlier in the week, however, after rival pub operator, Scottish & Newcastle (SCTN), reported weaker-than-expected results for its pubs, blaming the shortfall partly on poor weather.
Bass has been stripping away its links to the beer business. It sold its brewing units to Belgium's Interbrew in August for £2.3 billion and has announced plans to sell 900 of its smaller pubs.
"We'd like to spend that money driving our hotel business forward," Prosser said, adding the company is also considering stepping up its recent share-repurchase plan "as an alternative."
Prosser declined to comment on possible buyers for the 900 pubs that are up for sale. Media reports have mentioned a consortium including venture capital houses Candover and L&G Ventures, a unit of U.K. insurer Legal & General Group PLC (LGEN).
The company also is mulling what to do with about 1,000 less profitable public houses in its portfolio, but said that 580 other recently-purchased pubs are performing well.
Sales at its hotel unit rose 36 percent to £1.58 billion while sales in the pub and restaurant business, which includes the popular All Bar One and Browns chains, increased 19.5 percent to £1.67 billion.
The hotel division contributed £376 million to operating profit, up 24 percent, while pubs and restaurants chipped in £346 million, a 26 percent improvement.
But the latter unit, comprising more than 3,000 restaurants, pubs and bars, may see times get tougher in the coming year. On a comparable basis, sales from continuing operations fell 2.6 percent in the weeks since Sept. 30.
Including a one-time gain of £1.2 billion related to the Interbrew deal, Bass said net profit rose to £1.7 billion from £395 million a year earlier.
Although British antitrust regulators are still reviewing the brewing unit purchase, the Belgian firm bought the business on an unconditional basis, and Bass already has the cash from the deal.
"That money -- the £2.3 billion -- has been received, it's in the bank," said Prosser.
Prosser said UK authorities have been in contact with Bass over the implications of the Interbrew sale, but added he has "no idea" how Trade and Industry Secretary Steven Byers will rule on the matter. 
|
|
|
|
|
|
Bass
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
