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Financial uncertainty after Christmas slump
Shares in Real Hotel Group (RHG), owner of Purplehotels, have been suspended following fears it is struggling financially from a 25% slump in sales.
A trading update released this month revealed a decline in UK sales in the 13 weeks to January 1 from £4.5m to £3.6m on the year.
RHG blamed a fall in occupancy and related food sales on a slower return to work by its corporate customers after Christmas.
The group said it had requested the suspension "pending clarification of the company's financial position."
RHG's AIM-listed shares fell 35% yesterday (January 13), with revenues in the first week of 2009 down 34% compared to the previous year.
Should current discussions with its banks fail, the group said it would be forced to "consider all options open to it."
"Historically, the mid-market hotels generated substantial revenue from Christmas function business," said RHG.
"The group experienced a slowdown in demand and cancellations due to both the reduction in personal and corporate expenditure."
The group is valued at about £2.5m based on the last share price of 2.88p, against a reported debt of £13m.
RHG runs its own brand Purplehotels and Stop Inns properties, as well as the New Connaught Rooms in London.
The group also operates Comfort Inn, Quality and Clarion hotels licensed from Choice Hotels International, and properties in Germany, France and Belgium.