Compass chief executive, Michael J Bailey, has announced that the group is in discussions concerning the sale of its Travelodge and Little Chef brands.

Bailey said the sale 'has generated considerable interest' since it was announced last June, but that Compass is currently in negotiations with one party and hopes to conclude the sale shortly.

The company is disposing of the two chains as part of a shift in focus to concentrate on foodservice and vending and believes Travelodge and Little Chef lie outside this remit.

The two chains, consisting of 220 hotels and 400 Little Chef restaurants, have been jointly valued at between £600m and £750m.

Interested parties have been thought to include Whitbread, Nikko Principal Investments, Accor, Six Continents and Scottish & Newcastle, though it has not been said whether any of these parties is the one currently in discussions with Compass.

Compass has published results for the year ending 30 September, this week, showing turnover up 22 per cent to £10.6bn and operating profit up 19 per cent to £805m. Details: www.compass-group.com