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Carburton Street, London -- Bass (LSE: BASS) released full-year numbers this morning. Any lingering doubts by the market about whether this one-time brewing giant could make it in the world of hotel and leisure should now be put to one side. Bass was right to dispose of its brewing interests and focus on the higher growth hotel business.
In today's report, Bass posted turnover from continuing operations of £3775m, a rise of 22.8% from £3110m this time last year. Profits from these operations also improved and jumped 24.8% to £776m. Two of the three divisions came in with double-digit growth in earnings and even its soft drinks operations only missed double-digit growth by a smidgen.
Bass has transformed itself over the past three years and the benefits of its change in strategic direction are now beginning to become apparent. Over this period of time, the share price has displayed the characteristics of a roller-coaster ride, gyrating with each twist and turn that the company makes as it moves closer to achieving its objectives. The transition period has been an unpleasant one for shareholders who have seen the value of their shares plummet by almost 50% from over 1100p to 600p. But better times for shareholders look on the cards.
Bass now has a clearer idea of what it wants to achieve. The Inter-continental brand is a powerful trademark worldwide and Bass is intent on leveraging this hotel chain to the fullest. The Holiday Inn chain of hotels is also a good brand for the budget market and again expansion of this chain into Europe and Asia as well as the US will improve profitability for the group.
It is difficult to see where the Britvic soft drinks business fits into the group as a whole. It may only be a matter of time before Bass looks to dispose of Britvic in order to focus entirely on hotels and leisure. The company's decision to come up with a new name at some point in the next year is also a positive move and serves to cut all links with its past so that it can focus firmly on a bright future an international business of some stature.
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