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Bottom Line: Stakis strong

Wednesday 30 March 1994 17:02 EST
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WHEN Stakis, the hotel group being nursed back to health by Sir Lewis Robertson was teetering on the brink of extinction three years ago rival Queens Moat Houses was, to the outside world at least, a picture of health.

As the stock market reaction to Stakis' rights issue yesterday shows, the tables are now well and truly turned. In resonse to a 1-for-4 cash call at 72p shares in the market fell by 1p to 84p.

In recent months Stakis shareholders have done well. The stock has outperformed the All Share index by 50 per cent during the past year. In the last 18 months Stakis shares are done nearly three times better than hotels and leisure sector as a whole.

In the circumstances it is not surprising that Stakis is taking advantage of its re-rated paper to raise funds. Moreover with a good part of the hotels industry on its back there are bargains to be had and shareholders should benefit.

Lingering doubts on Stakis remain and perhaps account for the fact that shares are not trading at a premium to the sector.

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