Forum Archive Index - March 2001

["DR" <kat47@bigfoot.com>]

Lehman Brothers has reiterated its “market underperform” rating on Thistle Hotels (THO - news), which opened at 145p, following yesterday’s full-year results.

Analyst Sharon Lawley argues, “While there is further growth ahead as the hotels are renovated and uplifts in average rates ensue, there are limited expansion opportunities for the company as it has little availability to capital.”

The company posted a 0.7% rise in 2000 pretax profit to £68.2m, above Lehman’s forecast of £63.5m. Adjusted earnings per share rose 6.7% to 11.1p. London, where the group operates 23 of its 56 hotels, performed particularly well, with revenue per room growth up 9.5%. Looking ahead, the outlook for trading this year appears positive. Sales and revenue per available room have grown by more than 10% in the first eight weeks of this year.

On the downside, Thistle may feel the pinch of a US slowdown and the stock's decent run since October has been fuelled by hype surrounding a possible bid for the group.

Lehman forecasts 4.5% growth in revenue per room in London and 2% in the regions for 2001.

D.