February 23, 2001 - HVS International
Prospects ahead for the UK-based Hilton Group look encouraging, with the share price continuing to drive upwards, despite reporting a 2.4% fall in full year pre-tax profits before goodwill amortization and exceptional items of £267.7 million. The lower profits were expected as Hilton suffered from poor telephone betting returns, the cancellation of race meetings due to poor weather conditions and substantial e-gaming investment costs. Nevertheless, investors and market sentiments were positive, choosing instead to focus on the improved performance of the hotels.
In the UK synergies following the integration of Stakis began to pay off, with a 10.5% increase in RevPAR achieved. According to the group's Finance Director, Brian Wallace, Hilton will now focus on international expansion. Brand recognition is seen of paramount importance and management contracts are seen as the appropriate medium to pursue such growth, with plans to add 32 more contracts within two years.
Meanwhile, in the UK negotiations are continuing to dispose of £300 million of assets. Hilton is understood to be in exclusive talks with a financial institution which will enable it to maintain the Hilton brand name. Meanwhile, Wallace clearly stated that while non-core assets continue to be sold off, a demerger of the hotel and gaming division was not expected in the near future. Instead, Hilton is likely to reap the benefits of a proposed cut in betting duty which the UK government is widely expected to introduce in its March 2001 budget.
Hilton also confirmed the appointment of Sir Ian Robinson, the current Chief Executive of Scottish Power, he has joined as deputy Chairman, but will succeed John Jackson as Chairman who will retire later this year.
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HVS in 2000: Celebrating 20 Years of Valued Hospitality Consulting Service
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