Forte moves to sell Travelodges
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Forte has erected the "For sale" sign over its 490-strong chain of Travelodges in the US following several unsolicited approaches from potential buyers in the last few months. The disposal would also conform to Forte's strategy to concentrate on developing an international chain of branded hotels that led it last year to buy the Meridien chain.
The Travelodges are valued in the books at only $150m (pounds 95m), a reflection of the make-up of the business. More than 70 per cent of the hotels, equal to 350 in number, are franchised. They are mainly located on America's West Coast.
News that Forte may soon be able to take a further bite out of its pounds 1.37bn pile of debts, following the recent pounds 165m gleaned from the sale of the Harvester pub chain to Bass, did little to counter the disappointment over the group's latest half-year results.
Forte's shares fell 10p to 243p with leisure analysts dismayed by the trading performances in hotels in France and Little Chef restaurants in the UK. They also saw little scope for Forte to pay more than a maintained dividend for the next 18 months at least.
Group taxable profits, excluding a pounds 30m exceptional credit, for the six months to 31 July rose by 39 per cent to pounds 75m. The interim dividend is again being held at 2.75p.
Sir Rocco Forte, chairman, dismissed the City's criticism and said that the results were "another step forward in rebuilding profits to a level our asset base demands".
He did concede, however, that roadside restaurant business had been "a lot slower" and the company was experimenting with different concepts.
The performance by the core hotels side conformed to the general messages coming from other hotel operators.
London is booming, enabling room rates to increase by more than three times the rate of inflation, provincial hotels are doing better, although not enough to allow price rises much above inflation, and Continental Europe remains depressed.
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