A picture of the Mitchells & Butlers logo

Information centre

Information centre story index

15/02/2001

AGM Trading Update made by Sir Ian Prosser, Chairman of Bass PLC

AGM Trading Update made by Sir Ian Prosser, Chairman of Bass PLC, at the Company's Annual General Meeting Thursday 15 February 2001

In the first sixteen weeks of the year (thirteen weeks for Bass Hotels and Resorts) the Group has traded in line with our expectations. The hotel division has continued to achieve strong profits growth, particularly in Europe. The leisure retail division traded well over the Christmas period and benefited from high returns from branded conversions.

Bass Hotels & Resorts has benefited from the global distribution of its hotels and the strength of its portfolio of mid-scale and up-scale brands. As a consequence of this balance and its flexibility in owning, managing and franchising hotels, the division has demonstrated its resilience in the face of changing economic conditions in any particular area.

The North American hotel market has continued to grow, despite concerns over economic slowdown. The balance between supply and demand appears to be moving in favour of the industry and is sustaining growth in Revenue Per Available Room ('RevPAR'). Inter-Continental, although affected by the ongoing modernisation programme, has achieved 4.7 per cent RevPAR growth and Crowne Plaza 4.9 per cent growth, in the region.

In the midscale market Holiday Inn and Holiday Inn Express increased their RevPARs by 3.2 per cent and 4.7 per cent respectively in North America. We now have 2,279 midscale hotels in the Americas, with 314,549 rooms, compared to 2,154 hotels and 305,503 rooms a year ago. The roll out of Staybridge Suites continues with a further four properties opening in the first quarter and both occupancy and rate moving ahead as the brand becomes established.

The market remains strong in EMEA, where the upscale owned and leased hotels grew RevPAR by 9.1 per cent for Inter-Continental and 8.7 per cent for Crowne Plaza, driving a significant increase in profit. Holiday Inn grew its RevPAR by 6.1 per cent with Express also making good progress. Distribution has also increased within the region, which now has 493 hotels with 95,285 rooms.

Performance was generally good across the Asia Pacific region, with the incremental contribution from the SPHC hotels acquired last year underpinning profit growth.

We announced yesterday that we had sold our interests in 988 pubs for £625m. The retained estate consists of over 2,000 restaurants, bars and pubs with Average Weekly Takes ('AWT') of over £13,000.

In Bass Leisure Retail's retained estate we have seen a strong performance over Christmas and New Year, making up for poorer sales in the first two months of the financial year. Overall sales in the retained estate are up 3 per cent in the first sixteen weeks of this financial year. This is despite the impact of significantly higher incremental levels of planned closures, mainly from the refurbishment programme for the ex-Allied sites, with 1,271 trading weeks lost to closure this year versus 582 trading weeks last year.

Uninvested Like For Like ('LFL') sales in the retained core estate (excluding the ex-Allied outlets) are 1.1 per cent down for the period, although margins are ahead. Branded (uninvested) LFL sales are up 0.7 per cent. Looking at the Christmas/New Year trading period, overall sales were up over 10 per cent in the five week period ended 6th January with LFL sales up 2.4 per cent and branded LFL sales up 3.9 per cent.

We continue to make excellent progress with the conversion of the former Allied outlets. In the 116 sites now converted, we are seeing average sales uplifts of over 45 per cent from the pre-conversion levels under Allied management, which is ahead of our original targets. The LFL performance of the unconverted ex-Allied sites remains disappointing.

Britvic continues to trade well in a very competitive market, holding both its prices and volumes. The recently acquired Orchid business is now fully integrated and meeting our expectations.

The group's balance sheet remains exceptionally strong and we continue to explore opportunities for investment, particularly in hotels. We will apply our strict financial criteria to any potential investments and, if appropriate, will return further capital to shareholders.

Our priority is to drive the global distribution of the brands, with the emphasis on upscale hotels in the world's leading cities and midscale hotels in the major Western European economies.

-- ends --

For further information, please contact:

Richard North, Finance Director 020 7409 1919
Jonathan Atack, Investor Relations 020 7409 8153
Mark Rigby, Media Relations 020 7409 8571

Appendix

US Hotels Performance - 1st Quarter*

Bass Hotels & Resorts: Fiscal Year 00 / 01 U.S. Results

  1st Quarter
Oct - Dec
CY 00
Jan - Dec00
         
Occupancy % % Pts +/- CY % Pts +/-
    P/Y   P/Y
Holiday Inn 59.2 -0.3 65.5 -
Holiday Inn Express 57.6 -0.6 64.6 -0.1
Crowne Plaza 67.1 0.3 71.7 2.7
         
Ave Rate $ % Growth CY % Growth
Holiday Inn 79.24 4.2 80.55 4.8
Holiday Inn Express 69.34 5.9 70.42 6.1
Crowne Plaza 114.78 4.1 111.89 4.2
         
RevPAR $ % Growth CY % Growth
Holiday Inn 46.92 3.7 52.74 4.8
Holiday Inn Express 39.97 4.8 45.48 5.9
Crowne Plaza 77.06 4.6 80.22 8.3
         
System Size at 31/12/00        
         
  Current
Hotels
Pr Yr
Hotels
%
Growth
 
         
Holiday Inn 1,077 1,100 -2.09  
Holiday Inn Express 1,019 904 12.72  
Crowne Plaza 72 67 7.46  
         
  Current
rooms
Pr Yr
Rooms
%
Growth
 
         
Holiday Inn 207,974 212,176 -1.98  
Holiday Inn Express 79,137 70,536 12.19  
Crowne Plaza 22,289 21,146 5.41  

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

Information centre story index