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Six Continents Hotels accelerates investment

Six Continents<.> Hotels announced its six monthly financial interim results with updates on major investment…

Six Continents  Hotels announced its six monthly financial interim results with updates on major investment  around the world to take full advantage of the upturn.

Six Continents Hotels owns, manages, leases or franchises leading hotel brands including Inter-Continental Hotels and Resorts, Crowne Plaza, Holiday Inn, Express by Holiday Inn and Staybridge Suites in six continents around the world.

In what was described as “the toughest period that the hotel industry has experienced” after September 11, Six Continents Hotels concentrated on defending profits and investing for the future. For the six-month period ended March 31, 2002, Six Continents Hotels` operating profit was down 41.1 per cent to £109m.

Tim Clark, Chief Executive of Six Continents PLC said: “We have also maintained our investment in the business to generate revenues, improve efficiency, renovate our assets and drive the distribution of our brands. We intend to take full advantage of the upturn in the market. We`ve been encouraged by trading improvements through March and April, however our optimism for the rebound is tempered in the short-term by some uncertainty surrounding the pace of recovery in the US corporate sector and long-haul travel into key gateway cities.”

The company has strong development plans in the pipeline with 490 hotels including 66,800 rooms. Six Continents announced today that one of these will be a major new Inter-Continental hotel in Seattle, Washington, USA. Scheduled for completion in 2005, the hotel will unusually include 38 luxury condominiums as well as 113 guestrooms and three suites.

The former Posthouse hotels in the UK which were acquired in 2001 have now been rebranded to Holiday Inn and 2,000 rooms will be renovated in 2002.

Major renovation programmes have now been completed at six of ten key Inter-Continental hotels around the world including Miami, New York, Vienna, Budapest, Madrid and San Francisco. The four Inter-Continental hotels currently in renovation are Chicago, Paris (Le Grand), London (the May Fair) and Cannes.

Six Continents is also seeking investment opportunities in hotels that meet the company`s strict financial criteria. Six Continents` Chairman, Sir Ian Prosser said: “We continue to believe that there will be opportunities to execute our strategy and create value over and above our substantial organic expansion plans. However, we do believe that valuations will have largely recovered by December. Therefore, if we have not found such opportunities, then, no later than the end of this calendar year, we will commence a return of surplus funds to shareholders through a share repurchase programme.”

He went on to say: “We are confident in the future of our business given the continued investment in our brands, our people and our properties.”