Six Continents has said that it still plans to go ahead with the demerger of its hotels and retail businesses, despite posting a 24 per cent fall in pre-tax profits in end of year results to 30 September.

Chief executive, Tim Clarke, said the hotels arm had been hit the hardest: 'This has been one of the toughest trading periods ever, especially after 11 September.' He claimed that despite a 38.6 per cent fall to £262m in operating profits for the division, performance had been in line with expectations.

Richard North, group finance director and CEO of the hotels division, added that he remains cautious as to when the industry will see recovery.

Retail, which consists of the group's bars and restaurants saw a 5 per cent growth in operating profit, to £288m. However, Clarke said some parts of the market 'have seen some weakening in recent weeks' and so the group will be increasing marketing and promotional and pricing activities.

Chair, Sir Ian Prosser stressed that there is no change to plans announced in October to demerge the company and return £700m to shareholders. He said the results were 'against a backdrop of tough market conditions' but that the separation 'will create two excellent standalone businesses which will have greater flexibility to pursue their own strategies. Details: www.6c.com