Orient-Express Hotels Announces Share Buy Back Plan - Warns on Q3 Results
HAMILTON, Bermuda, Sept. 25 / Orient-Express Hotels Ltd., owners/operators of 37 deluxe hotels, tourist trains and river cruise ship in 14 countries OEH today announced its intention to acquire up to 1 million of its Class A common shares in open market transactions. The Chairman also announced that he and the President are making open market purchases for their own account additional to the shares which the company plans to buy back.
Mr. James B. Sherwood, Chairman, said that the company's board of directors feel the market may be over-reacting to the dreadful terrorist acts of September 11th. He said that the immediate impact on tourism would be mainly felt by the U.S. market where air travel is involved. He pointed out that two of the company's five North American hotels are drive-to and they could actually benefit from the situation. A third, La Samanna in St. Martin, is closed at this time of the year and will reopen only just before Christmas by which time there may be more confidence in air travel. A fourth, Charleston Place in Charleston, South Carolina is part owned and much of the company's income is fixed interest on loans which will be unaffected. The primary adverse impact will be from cancellations at the Windsor Court in New Orleans. Revenue at "21" Club in New York City is down in the immediate aftermath of the tragedy, but its results should not be significantly impacted by reduced air travel.
Mr. Sherwood said that travel by Europeans so far seems relatively unaffected by September 11th. Terrorist acts by the IRA in the U.K., the ETA in Spain and in the Balkan wars are routine to this group.
Mr. Sherwood stressed that the company's liquidity was excellent and reduced interest rates and a weaker dollar should improve earnings. He said that some of the company's European properties were receiving bookings which had been cancelled from Dubai and other Middle East destinations.
"My experience in the passenger transport business tells me that introduction of armed police on flights, as is the practice of El Al, Israel's airline, would go a long way to reduce fears of air travel," he said. He also noted the wide support of the U.S. expressed by the Moslem world which should both limit and expedite the U.S. response against the terrorist organization responsible for these reprehensible acts.
Mr. Simon M.C. Sherwood, President, said that it was too soon to forecast the impact on 2001 earnings of the September 11th tragedy. The company had net income of $40 million in 2000 and had earlier predicted higher profits in 2001. "Clearly, we will not be able to achieve our net income target but we need to highlight that our strong third quarter was nearly over when the terrorist attacks occurred and the fourth quarter is traditionally a weak period for leisure travel," he said.
Mr. Simon Sherwood said that the company's New York City offices and '21' Club were located in midtown Manhattan and thankfully no staff were injured in the disaster.
This press release contains, in addition to historical information, forward-looking statements that involve risks and uncertainties. These include statements regarding future earnings and similar matters that are not historical facts. These statements are based on management's current expectations and are subject to a number of uncertainties and risks that could cause actual results to differ materially from those described in the forward- looking statements. Factors that may cause a difference include, but are not limited to, those mentioned in the press release, unknown effects on the travel and leisure markets of terrorist activity, customer demand and competitive considerations, ability to sustain price increases or reduce costs, realization of bookings and reservations as revenue, interest rate and currency value fluctuations, adequate sources of capital and acceptability of finance terms, global and regional economic conditions, shifting patterns of business travel and tourism and seasonality of demand, and legislative, regulatory and political developments. Further information regarding these and other factors is included in the filings by the company and Sea Containers Ltd. with the U.S. Securities and Exchange Commission.