Big boost for Hilton investors

Andrew Leach|Mail13 April 2012

HOTELS and betting shops giant Hilton Group is expected to raise its dividend for the first time in three years when it reports interim results on Thursday.

Analysts expect the firm to report strong profits growth, helped by a bounce in parts of its hotels business and continued strength in its Ladbrokes betting arm.

Shareholders, who have seen the same 3.4p half time payout for the past three years, are expected to share in the success with an improved dividend, though the final decision will be made at a board meeting this week.

Analysts expect profits of about £170 million, up from £110.5 million in the first half last year.

The figures reflect continued, though patchy, recovery in the hotel market, where trading last year was savaged by the Iraq war, the Sars virus and worldwide fears over terrorism.

Ladbrokes has benefited from a series of favourable results, including outsiders Greece winning the Euro 2004 football tournament, and the continued roll out of fixed-odds terminals in betting shops.

Anticipation of good results and a raised dividend helped propel Hilton's share price by six% last week, the third-biggest rise in the FTSE 100 index, and the shares closed on Friday at 257 3/4p to value the group at £4.1 billion.

Alongside the interim results investors are likely to quiz Hilton chief executive David Michels about future strategy, including opportunities from a planned relaxation of the UK's gambling laws.

Hilton has indicated it is keen to re-enter the casino market four years after selling its 27 outlets to bingo operator Gala Group for £235 million. However, it needs to regain its casino licence, and is likely to take a minority stake in an existing small operator to do this.

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