Hilton Group Profits Rise, Sees Uncertain 2nd Half

LONDON— British hotel and gaming company Hilton Group Plc reported a 32.6% jump in first half profit on Aug. 30, shrugging off a slowing economy and foot-and-mouth, but it faces a more uncertain second half, according to a Reuters report. The group, which operates all Hilton hotels outside the United States as well as the Ladbroke gaming business, said despite short-term fears for the second half from economic uncertainties it was optimistic for the longer term. “We had a strong first half, but face a slightly more uncertain second half,” said Chief Executive David Michels. He was cautious of the autumn months which are the busiest time for its European hotels, especially as the summer showed a slightly weaker trend with pricing under pressure. The group, which operates almost 400 hotels and 1,900 betting shops, reported higher-than-expected pre-tax profit of 144.3 million pounds ($209.7 million) before goodwill, amortisation and exceptional items for the six months to June 30, compared with expectations of 120-135 million pounds. Michels said the results reflected a strong performance from its European betting operations and an earlier move into profit from eGaming than expected, and good trading at its hotels. Deputy Chief Executive Brian Wallace said the hotels side had seen a slowdown in the second quarter due to less tourism after the foot-and-mouth livestock epidemic in the UK and the effect of the U.S. slowdown on business travel to Europe. “For the second half we expect to see some growth, low growth, in the UK. This will be slower than the first quarter but still good growth,” Wallace said. The group said after a 27% rise in first-quarter hotel profits, a Q2 slowdown saw overall first-half profits rise by only 13.8%, and on a like-for-like basis H1 worldwide revenue per available room growth was 4%. Hilton has been expanding in hotels, completing the purchase of the northern European hotels group Scandic in June this year after it bought UK company Stakis in March 1999, and the division now accounts for around 70% of group profits. SOURCE: Reuters