10:26am UK, Thursday August 28, 2003

Hilton Group has posted a smaller-than-feared fall in first-half profit.

And it says it sees a steady recovery at its hotels, while business at its Ladbrokes betting shops continues to boom.

180 Hilton Hotel

Hilton occupancy up

The firm, which runs about 400 hotels and over 2,000 betting shops, said profit before tax, fell 15% to £110.5m in the six months to June 30.

The consensus forecast was £103m and the interim dividend was kept at 3.4p per share.

Uncertain

"I take the view that hotels will steadily recover but remain uncertain and cautious about the timing and pace of that process," CEO David Michels said.

Hotel groups across the world have had a torrid time as the war in Iraq and outbreak of the SARS virus exacerbated a drop in travel in the global economy downturn.

Hilton has coped better than most thanks to Ladbrokes, which has benefited from steps to deregulate Britain's gaming industry, such as the abolition of betting duty in October 2001.