Trading update Bass PLC, Wednesday 18 September
Trading update Bass PLC, Wednesday 18 September
Bass PLC today (Wednesday 18 September) issued a trading update covering the first 48 weeks of the year.
In the interim results announcement on 22 May 1996, Sir Ian Prosser, Chairman, concluded that: "We have excellent growth opportunities in our hotels and leisure retailing businesses. Our UK branded drinks businesses continue to generate cash and grow profits. We are confident that overall we will continue to see good progress in the second half of the year even after allowing for the exceptional summer last year".
Today he commented: "I am very pleased that Bass' earnings per share to date reflect the progress expected for the second half".
Dollar profits continued to grow in the second half, albeit at a marginally lower rate than in the first half. We have seen growth in the net number of hotels entering the system since the half year with a net increase of 134 hotels (235 gross) in the year to date. The backlog of hotels at the end of August waiting to enter the system comprised 56,000 rooms.
In the first 11 months, revenue per available room (RevPAR) in the US franchised hotels increased by six per cent. In the US market front-end franchise fees have been particularly high this year due to an unusually active real estate market and early licence renewals consequent upon the core modernisation programme. This is unlikely to be sustainable at the same level in the future. The company managed hotels in the Americas increased RevPAR by five and a half per cent in the period.
In Europe Middle East and Africa, overall improvements in average room rate and occupancy have led to RevPAR growth of eight per cent to date.
Leisure Retailing - Bass Taverns
Bass Taverns' managed estate performed well over the summer months. The roll-out of successful new concepts is meeting our plans, with 68 Fork and Pitcher outlets, 87 Harvester outlets, 60 O'Neills and 15 All Bar One currently open and trading.
In the managed estate year to date turnover growth is 16 per cent, marginally less than the first half increase, reflecting the increased number of premises closed for conversion during the second half. Drinks takings per outlet were up seven per cent. Across the estate food revenue has continued to increase strongly being up nearly 60 per cent, or 20 per cent excluding Harvester, over the comparative period. Machine income to date is running at seven per cent above last year.
The Bass Lease Company continues to trade at a level similar to last year.
Leisure Retailing - Bass Leisure
Operating profits are somewhat below last year. Improved results in Coral and BLE have partially compensated for the reduced performance by Gala.
The impact of the National Lottery has been significant for Gala this year. Despite operating five more clubs total admissions are running at four per cent below last year. Since the anniversary of the introduction of the Lottery scratchcard the overall decline in admissions has slowed, but not as much as expected. Spend per head is running at three per cent above last year, but this has not been sufficient to compensate for the admissions decline.
The Arthur Prince and Coomes acquisitions have performed according to expectation and as a result Coral profits are significantly above last year.
Drinks - Bass Brewers
Bass Brewers produced a strong performance in all trade sectors with beer volumes up two and a half per cent against last year.
Continuing competitive pressures in the beer market have caused further erosion of unit margin in both the on and off trade, but the successful roll-out of Caffrey's has substantially offset these pressures.
The new product introductions from Bass Brewers have led to an increased profit growth compared to the first half. Hooper's Hooch is demonstrating consistent appeal and has grown to a brand volume of around 300 thousand barrels per annum.
We look forward to a speedy resolution of the regulatory position regarding our proposal to merge Bass Brewers' and Carlsberg-Tetley's activities in Great Britain in order to minimise any further uncertainty among employees, customers and suppliers.
Drinks - Britvic Soft Drinks
The Robinsons brand continues to trade well and profits are in line with expectations. However, cooler summer weather together with particularly intensive competition in the carbonates sector have resulted in reduced profits within the Britvic base business.
The group was cash positive in the second half to date excluding the acquisition of the 50 per cent share in Carlsberg-Tetley. Interest charges in the second half to date are lower than expected and offset the reduced operating performance from Britvic.
Further comment on trading conditions and prospects will be made at the time of Bass' Preliminary Results Announcement early in December, 1996.
For further information, please contact:
|Richard North, Finance Director||0171 409 1919|
|Alastair Scott, Investor Relations||0171 409 8223|
Notes to editors:
Bass PLC is a UK listed company, which has developed leading business positions in three major industries.
- Holiday Inn Worldwide is a global hotel brand and lodging franchise with more than 2,000 Holiday Inn hotels in over 60 countries worldwide.
- In pub and leisure retailing, Bass has over 4,000 pubs and a network of branded bingo clubs, betting shops and bowling centres countrywide.
- Bass Brewers is one of the major UK brewers of branded beers and Britvic Soft Drinks is one of the leading UK producers of branded soft drinks.