Profit expectations for Jurys Hotel Group have been revised upwards by Davy Stockbrokers. The stockbrokers said it had revised the forecasts in the light of the stronger-than-expected results for the year to end April 1997 and to reflect the buoyant start to trading this year.
Davys is increasing its pre-tax forecast for 1997/98 to £16.3 million from £14.9 million and earnings per share to 28.6p from 26.5p. It has also increased its forecast for the year to April 1999 to £17.9 million, from £16.5 million. The strong results were achieved through a combination of strong room rates increases, modest occupancy growth and well-timed investment, analyst Mr Kieran Mahon said.
He said the group has further upside. He pointed out that the comparable British hotel sector has under-performed since March this year, recording an 18 per cent relative decline. This reflects investors concerns over the potential adverse impact of sterling strength, increasing room supply and the minimum wage issue.
However, fears look overdone, according to Mr Mahon. "While Jurys is trading in line with the multiples of its UK peer group, this does not particularly flatter the stock which offers relative attractions including its enviable track record and diversity of earnings," the report states.
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