Lonrho Share News (LONR)

Lonrho subsidiary, Lonrho Budget Hotels, has signed a 20 year master franchise agreement (MFA) with easyHotel to open and operate an easyHotel network across Africa. The news comes as African holding company Lonrho reports a 19.1% increase in revenue for the third quarter on a like-for-like basis. The opening schedule will focus on African destinations already served by easyJet, sister company to easyHotels, as well as other large cities across the continent. The hotels will be branded 'easyHotel.com' and designated as 'a Lonrho Hotel' to build maximum market presence and credibility. The 'easy' brand, owned by Sir Stelios Haji-Ioannou, is one of the world's most recognised and successful value-for-money brands.easyHotel has hotels spanning from as far north as Edinburgh and as far south as Dubai.Africa is one of the fastest growing economies in the world. The African market is being stimulated by an increasing inflow of tourist and business visitors combined with an indigenous population of a billion people with a rapidly growing disposable income. McKinsey forecast that indigenous African consumer spending will be $1.6 trillion by 2020.David Lenigas, Executive Chairman of Lonrho, said: "Lonrho is already a significant brand name across Africa. We believe that combining it with the 'easy' brand, which is well-known for highly successful budget operations, to create the Lonrho 'easyHotel' chain will satisfy the growing demand from consumers across the continent. He added: "We are delighted to have the exclusive rights to develop the easyHotel concept across Africa. The low-cost value hotel market is currently undeveloped on the continent yet is arguably the fastest growing sector of the global and African hotel markets."The first easyHotel is set to open in Africa in 2012 with another fifty planned to open by 2016. Sir Stelios Haji-Ioannou, Chairman of easyGroup said: "The economic development of the African market, supported by the significant number of foreign visitors, large scale urbanisation and the growing disposable income of the one billion people in the domestic market, clearly provides demand for a safe, value for money, budget hotel chain of consistent, predictable quality."Lonrho said revenue in its third quarter (April to June) was up 31.1% year-on-year to £35.1m. All five divisions within the group showed at least double digit percentage growth on the prior year with the most notable being support services, where the addition of the AFEX group as well as strong performance at CES Zambia and Bytes & Pieces helped to increase revenue by 117.8% compared with the corresponding quarter of 2010.As at 30th June 2011 the group had available cash balances of £23.2m.Looking ahead to the final quarter of its fiscal year - the most significant of the year for the company - Lonrho said: "With the further expansion of Fly540, the acquisitions of Grindrod PCA and Fish On Line and the implementation of new contracts at Oceanfresh, the building blocks are in place to deliver results in line with market expectations."NR