Page 20 - Stakis Consolidated Teaching Note

Individual Areas Explained

Finance :

In 1990, finance posed the greatest problem. The drive for

growth under Andros had eaten up reserves and gearing

(leverage) had increased rapidly. Despite this, Stakis could
have been seen as an attractive take-over target. Most of

its hotels were owned outright and many may have been

under-valued. Action was needed to reduce the gearing

level and re-establish reserves.

The first step in achieving financial control was cost

cutting. This entailed concentrating all head office activity
for all divisions in one location. This made co-ordination

and control easier which in turn led to further cost savings.

POSITION AT 1995
POSITION AT 1990

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