MILLENNIUM & Copthorne Hotels yesterday disclosed that it is considering adding casinos to some of its UK hotels, depending on the final shape of the forthcoming deregulation of gambling.

Kwek Leng Beng, the group’s chairman and 52 per cent shareholder, said that the 832-room Copthorne Tara in Kensington, West London, had room for a 50,000sq ft casino, and the Copthorne Effingham Park, near Gatwick, could be turned into a large gaming and golf complex.

Mr Kwek confirmed that he had received expressions of interest from casino operators keen to set up joint ventures in several of M&C’s hotels. “Many of our provincial hotels have plenty of land, so there is a lot of potential,” he said. “But it depends on deregulation.”

Mr Kwek also confirmed that M&C is carrying out an asset-by-asset review with the aim of improving its returns on investment. Its net assets of £1.4 billion equate to about 500p a share, a big premium to the share price of 313p, down 5¼p.

However, Mr Kwek insisted that the company would not be rushed into hasty decisions, and remained cautious of the benefit of selling assets while retaining a management contract, as many of M&C’s rivals, including InterContinental Hotels, have done.

“While the market is still recovering, it is not the best of times to sell,” Mr Kwek said. “In a recovering market, the potential earnings uplift is tremendous.”

M&C yesterday delivered further evidence of a bounceback from last year’s dismal trading, reporting pre-tax profits of £20.6 million in the six months to June 30, against a loss of £6.3 million in the first half of 2003. Earnings per share reached 4.6p, against a loss of 2.2p, and turnover was up 8 per cent to £262.7 million.

The interim dividend has been cut from 4.2p to 2.08p, following on from the big reduction in the final payout last year.

M&C also confirmed that Tony Potter, joint acting chief executive since the departure of John Wilson in March, is to assume the role full time at the end of the year. David Cashman was also confirmed as chief financial officer.

Mr Potter said that the recovery was firmly on track, but conceded that the second-half comparables would be tougher. In the first half of 2003, the group was hit by factors including Sars, the Iraq war and the global economic gloom.

Occupancy levels across the company’s 90 hotels rose from 61.1 per cent to 69.5 per cent, while comparable revenue per available room (revpar) was up 12 per cent, led by New York, Asia and London, where revpar jumped from £54.85 to £62.37.

In the first four weeks of the second half, group revpar was up 12.8 per cent.