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Starwood to sell $4bn-worth of assets

27 October 2005

Starwood Hotels and Resorts has announced plans to sell up to $4b-worth of assets over the next 12 months.

The US-based group owns, leases or franchises more than 750 hotels and timeshare properties under seven brands including Sheraton, Westin and W.

"We expect that between today and 12 months from now we will likely enter agreements for the sale of $2b-$4b (£1.1b-£2.2b) of assets," announced chief executive officer Stephen Heyer.

"In most cases we expect to retain long-term management or franchise contracts, maintaining our footprint while unlocking value for reinvestment in the business and for share repurchase."

In the third quarter of 2005, Starwood boosted its pre-tax income to $148m (£83m) compared with $139m (£78m) in 2004. However, income tax and the expense of repatriating foreign earnings slashed net income from $107m (£60m) last year to $39m (£22m).

Earnings before interest, tax depreciation and amortisation grew by 19.2% to $347m (£194m), compared with $291m (£163m) the previos year, despite the impact on hurricanes Dennis, Katrina and Rita on three Starwood hotels in New Orleans and Florida.

Sales increased to $1.5b (£840m), from $1.3b (£729m) last year, this includes $871m (£488m) from owned, leased and joint venture hotels, $233m (£131m) from vacation ownership and residential sales, and $126m (£71m) from management and franchise fees

The group is predicting a full-year net income of $506m (£284m) on a $6b (£3.4b) turnover.

By Angela Frewin

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