BASS is still hotfoot after acquisitions despite spending #1770m on the 187-strong Inter-Continental chain earlier this year.
Chairman Sir Ian Prosser
delivered an upbeat assessment of the group's hotel empire, the largest in the world with 450,000 rooms.
Yesterday Bass delivered interim pre-tax profits #2m lower at #307m but the figures are distorted by the past year's disposals. However, the underlying trend was a 10% rise in profitability from the on-going businesses.
Sentiment was underpinned by the group's strong financial position. Bass said it will increase its capital spending by #100m this year to around #700m.
The group has undergone an unprecedented series of acquisitions and disposals in order to concentrated on hotels, pub retailing and brewing.
It has sold off the Gala Bingo business, the Coral betting chain, Barcrest amusement machine manufacturing and more than 1400 tenanted pubs.
Following the disposals Bass has positioned itself in some of the fastest-growing areas of the
consumer economy.
The disposal programme enabled the company to return #801m to shareholders. As part of the reorganisation, the Holiday Inn brand name will disappear in favour of Bass Hotels and Resorts.
Hotel profits overall were obscured by the sale of some properties in 1997 and profits were flat at #80m. However, there were strong performances in Britain, Germany and Belgium and across the Atlantic in
America.
There was a setback into small loss in Asia, which came as no surprise to shareholders and the City.
Bass is now to market its hotels in separate categories, ranking from the Holiday Express through the Crown Plazas to Inter-
Continental. The division will enjoy some #200m of capital expenditure this year.
The City is speculating as to where Bass may move next, although the company seems intent in building up its exposure in Europe.
The pub and restaurant activities increased their contribution by almost 11% at #132m but, again, there was the complications caused by shedding the tenanted pubs and also the poorer performing managed houses.
Bass is successfully pulling in the drinkers with wet sales ahead by almost 5% while food sales were up by 21% as the fashion for eating out became even more prevalent.
Brewing profits were just #1m better at #78m although a slight gain in volume was recorded.
Carling continued to spur on the division although its 11.3% advance pales in comparison with the advances seen by Whitbread's Stella Artois.
Hooch volumes continued to decline and it was hard pounding in the beer markets of the Czech Republic and China.
The Britvic soft drinks activities raised their return with some success at Pepsi.
The interim dividend has been increased from 9.1p to 9.6p.
Analyst Nigel Parson at
Panmure Gordon is looking for an an outcome of #685m compared with last time's #714m with the fall due to the disposal programme wiping #120m off profits, while Ben Maitland at Sutherlands is a more optimistic #702m - the strength of sterling will be a second-half factor.
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