A picture of the Mitchells & Butlers logo

Information centre

Information centre story index


AGM Trading update made by Sir Ian Prosser, Chairman of Bass PLC, at the company's Annual General Me

AGM Trading update made by Sir Ian Prosser, Chairman of Bass PLC, at the company's Annual General Meeting, Thursday 4 February 1999

In the first sixteen weeks of the year (13 weeks for Bass Hotels & Resorts) the hotels and leisure retail divisions have again improved but we have experienced significant pressure in brewing in the face of the economic challenges in the UK to which I referred in the Annual Report.

In our Hotel division we continue to drive quality improvements in Holiday Inn North America where RevPAR grew by 6.7 per cent which is well ahead of the market. We have achieved this by removing hotels from the system which are unable to meet our performance criteria and by increasing revenue investment.

Trading in Crowne Plaza, Holiday Inn and Holiday Inn Express remains strong on the European mainland although the United Kingdom has been relatively weaker. RevPAR for the EMEA region is up 3.9 per cent but we have yet to see any improvement in the market conditions in Asia Pacific.

Inter-Continental continues to perform well with RevPAR in our owned and leased estate up 9.2 per cent, almost entirely due to rate increases, which has driven an increase in total revenue of 5.5 per cent.

Our investment in our pub and restaurant business continues to achieve good returns and drive sales forward. Food sales have grown by 11 per cent and drinks sales by one per cent. Adjusting for the disposal of managed pubs, managed house turnover is up 4 per cent and the benefits of our cost reduction programme are beginning to show. Like for like sales on an uninvested basis however are some 3.2 per cent down. In January Bass Leisure Retail completed the acquisition of a small chain of bar restaurants in Germany, representing the division's first move into international markets.

The UK beer market remains difficult with market volumes some 4 per cent down and a marked increase in price discounting, particularly in the off trade. Bass Brewers held market share in the on trade with volumes down 2.2 per cent but we were not prepared to sacrifice margins in the off trade where volumes were down 13.2 per cent. Overall our drive brands gained market share with Carling volume up 4 per cent. We continue to make significant cost reductions which will see benefit coming through in the second half of the year.

The soft drinks market remains highly competitive but we have grown our major brands with overall volumes up 4 per cent and an improvement in market share.

We continue to invest in our strong pub and restaurant brands and to seek investments in hotels which meet our investment criteria. Cash flow is strong and net debt is some £200 million lower than anticipated.

Whilst we are not immune from difficult market conditions we have strong brands, we are continuing to invest behind them and we are taking firm management action to secure sustainable long term growth for the group.


For further information please contact:

Richard North, Finance Director   0171 409 1919
Jonathan Atack, Investor Relations   0171 409 8153
Mark Rigby, Media Relations   0171 409 8571

Appendix - US Hotels Performance 1st Quarter*

Bass Hotels & Resorts: Fiscal Year 98/99 U.S. Results

  1st Quarter
Oct - Dec
BHR: C/Y 98
Jan - Dec 98
Occupancy % C/Y % Pts +/- P/Y C/Y % Pts +/- P/Y
Holiday Inn 59.8 0.8 65.4 -0.1
Holiday Inn Express 58.0 0.8 64.1 0.8
Crowne Plaza 65.9 1.9 68.9 -1.1
Ave Rate $ % Growth C/Y % Growth
Holiday Inn 72.70 5.5 73.44 5.4
Holiday Inn Express 61.90 5.6 62.75 4.8
Crowne Plaza 105.94 4.9 103.31 5.2
RevPAR $ % Growth C/Y % Growth
Holiday Inn 43.47 6.9 48.06 5.3
Holiday Inn Express 35.90 7.1 40.25 6.1
Crowne Plaza 69.84 8.1 71.15 3.6
System Size Hotels % Growth
Holiday Inn 1,132 -5.2
Holiday Inn Express 789 21.4
Crowne Plaza 64 25.5
System Size Rooms % Growth
Holiday Inn 217,050 -5.6
Holiday Inn Express 62,062 19.3
Crowne Plaza 20,855 20.2

*Based on returns submitted by franchisees up to the date of this announcement.

Information centre story index