Chairman’s Statement
The first half of the current financial year which ended on 31 October 2001 was the most challenging our sector has faced for many years. Given our proven strategy of developing a balanced portfolio of properties in strong city centre locations, your Group fared very much better than many others in the sector. Management coped extremely well with the effects of the global economic slowdown and the setbacks during the period, most notably the attacks of September 11th in the USA. A combination of optimising revenues across all properties with prudent management of costs, together with leveraging the strength of the Jurys Doyle brand, has produced a very creditable performance for the period.

Group turnover for the six month period ended 31 October 2001 amounted to €137.9 million - an increase of 6% over the corresponding period in 2000. Operating profit decreased marginally by 2% to €40.6 million during the period. Interest costs increased from €8.5 million to €11.8 million reflecting the Group’s financing costs of recent investments. As a consequence, and compared to the first six months of 2000, pre-tax profits decreased by 12% to €28.8 million. Similarly, basic earnings per share (adjusted for goodwill amortisation and the impact of newly introduced accounting standards for the treatment of deferred tax) decreased by 10% to 43.3 cent.

The Directors have declared an interim dividend of 7.75c per share, an increase of 8% on the previous year’s interim dividend. Dividend warrants will be posted on the 15 February 2002 to holders of ordinary shares at close of business on the record date of 18 January 2002.

am pleased to report that each of the Group’s thirty one properties made a profit during the period with many properties achieving results ahead of their targets.

In March last, we acquired two hotels in Birmingham - the 3-star Chamberlain Tower and the 2-star Chamberlain Park Hotel. The rebranding of the Chamberlain Tower as Jurys Inn Birmingham has been very successful. Our management team has implemented a new sales and marketing programme in Jurys Inn Birmingham which has resulted in improvements in occupancy levels, room rates and operating profits for the period. Jurys Inn Birmingham is currently the largest Inn owned by the Group. It has 445 bedrooms. In a relatively short period it has emerged as a significant contributor to Group operating profits. The sale of the 2-star Park Hotel was completed in September for Stg£8.25 million which was slightly higher than its stated value at the end of our financial year at 30 April 2001.

Our development programme in the United Kingdom continued during the first six months. In early 2002 we will open a newly constructed 240-bedroom Jurys Inn in Croydon, London. We recently announced plans for a new 274-bedroom Jurys Inn in Newcastle. Construction has now commenced on this project which is situated in the new West Gate Centre - a mixed retail, office and residential development under construction in Newcastle city centre. Jurys Inn Newcastle is scheduled to open in early 2003. In the USA, we are progressing our plans for the development of a new Jurys hotel in Boston.

The outcome for the first six months is a credit to the enormous efforts made by the Group’s personnel at every level. I am very grateful to all our people for their loyalty and commitment in recent months which contributed to ensuring that your Group performed to its highest potential during challenging times.

Trading for the months of November and December is in line with our expectations. The Group continues to operate against the background of the events of recent months and the current economic environment. We have a most attractive portfolio of properties consisting of hotels and inns in strategic city locations and consequently we are cautiously optimistic about the trading outlook for the remainder of the year.
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