It's worth checking in to Hilton

Little sign of pick-up is chilly news for Aggreko; Don't give up yet on troubled Elementis

Hilton may own some of the world's most comfortable hotels. But that is little solace to its investors, who have suffered months of sleepless nights watching the stock plumb ever fresher lows.

The global business downturn has crippled the corporate travel market, forcing groups such as Hilton to woo less affluent leisure travellers. And even the hardiest of holidaymaker will think twice about travelling if war in the Gulf is declared.

Hilton spent 2002 waging its own battle against the aftermath of 11 September. Yesterday's full-year results showed victory remains elusive. Profit in the hotels division fell 17 per cent to £212m, dragged lower by a poor performance at the group's properties in Europe. Revenue per available room (the key industry profitability yardstick) was 1 per cent down for the group, and another slide so far this year suggests worse to come. Hilton isn't just about hotels, of course. In Ladbrokes, it has one of the strongest gaming brands around. In fact, in certain betting circles, the hotels division is disparagingly referred to as "other business". The drop in hotel profits means Ladbrokes now contributes 40 per cent of operating profits. The division's 28 per cent rise in profits to £149m was cheered by management with as much fervour as France's first round dismissal from last year's World Cup. The increase came from the abolition of UK betting duty in 2001, the growth of e-gaming and a strong performance from phone betting.

Overall, group pre-tax profits dropped 21 per cent to £156m. Turnover benefited from Hilton's 2001 acquisition of Scandic, rising 32 per cent to £5.48bn. At 143.5p, down 4.5p, the shares look attractive for long-term investors, but events in Iraq mean they could yet get cheaper.

Little sign of pick-up is chilly news for Aggreko

Aggreko, the largest supplier of portable heating and ventilating equipment in the world, has had a truly awful period. A profits warning last summer was followed by the death of Phil Harrower, its chief executive, in a car accident in December. His successor is yet to be named, though the new chief will be based in the UK rather than the US.

Yesterday's results reflected the warning with profits down 18 per cent to £55m in 2002 after the Californian energy crisis brought in a flood of new competitors.

Aggreko has since moved a quarter of its US capacity to other territories and cut 17 per cent of its US workforce. America still accounts for 38 per cent of group sales, down from 50 per cent in the previous year. The company is trying to differentiate itself from rivals by offering engineering support rather than just renting out generators.

The good news yesterday is that the US market appears to have stabilised in terms of price and volume. The bad news is that there are no signs of a pick-up.

The shares, up 3.25p at 125.5p, trade on a forward price-earnings multiple of 10, which could still fall. Sell.

Don't give up yet on troubled Elementis

Pension trouble in UK plc, part 127: Elementis, the chemicals company, had to double its contribution to its pension fund last year and has to double it again this year. Falling stock markets have sent the fund to a deficit of £64m. The fund is a legacy of the company's past as a much bigger outfit, with 9,000 members, many of whom are already pensioners.

Happily, unlike its bigger sectormate ICI, it has managed to keep a much tighter grip on the business and was able to trumpet some quite impressive cashflows with its 2002 results yesterday. It was able to keep its minimal debts at the same level as the year before despite a £28m acquisition. The company is confident that it can get the pension fund back to balance without even stretching the balance sheet.

Painful factory closures meant losses in 2002 increased tenfold to £34.2m, but these costs won't recur in the coming year. Although demand for chrome for aircraft engines and steel plants took another dive in the last months of 2002, there should be healthy profits this year. Demand for pigments, used in paint and concrete, is also strong. The shares, at 22.75p, are a hold.