Profits drop for Six Continents

Pre-tax profits at Six Continents dropped by 3.3% in the 12 months to the end of September, despite a 6.8% increase in turnover. <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /?>

Before exceptionals, profit fell to £731m, on turnover of £4b.

Operating profits in the Six Continents hotel division were $30m down on 2000, as a result of the economic downturn and the severe drop in tourism following the 11 September.

But chief executive Tim Clarke said there were already some small signs of improvement in the US.

"Within hotels it is clear that in the United States, following the dire trading condition in the two weeks following the terrorist attacks, there has been some improvement, although trading remains at depressed levels," he said.

Things remain less certain in Europe, Clarke said, with no signs of immediate recovery.

Six Continents Retail, which runs the group's 2,000 pubs, has been unaffected by these economic issues. Overall sales were up by 4.3% and average sales per outlet have risen to £14,000 per week. The group sold 988 smaller pubs during the year for £625m.

But it is the slump in business facing the hotel industry that is causing the group headaches.

"Well before the events of 11 September in New York and Washington we were being challenged by recession in the United States," said chairman Ian Prosser. "Since then there has been a significant slump in international travel.

"It is too early to predict precisely how the international effort to curb the threat of terrorism will impact on the world economy, the industry and therefore Six Continents."