International hotels group Millennium & Copthorne has announced a doubling of profits and planned UK expansion during a "pivotal" year for the firm.

M& C, whose profits slumped last year due to factors such as the Iraq war and the Sars outbreak, saw pretax profits before exceptionals rise to £55 million in the year to December 31, against £26.4 million in 2003.

Surrey-based M&C, which owns and operates 87 fourstar and five-star hotels in 16 countries, said the London hotel market saw a strong improvement in 2004, with the key revpar measure - revenue per available room - coming in at £66.62 against £59.74 last time.

Millennium Knightsbridge led the recovery, showing the fastest rate of growth in the capital.

Elsewhere in the UK the strongest performances were in the South-east.

However, the M&C hotel in Merry Hill, along with those in Cardiff and Newcastle, saw minor decreases in revpar as they struggled to pull back from the downturn.

M&C announced it had set up a team aimed at boosting the profitability of its regional UK hotels, with plans to partner with investors and potential franchise owners to increase the size of the chain by between ten and 20 hotels over the next three-to-five years.

M&C's chief executive, Tony Potter, said: "There is a high recognition of the 'Copthorne' brand and we want to capitalise on its good name and strong position in the market."

He said that while the majority of the expansion would be through franchises management contracts, he was not ruling out the possibility of joint ventures or some form of equity participation by investors. He added that the team was close to signing two management contracts for two Copthorne hotels in the UK.

"These should be completed within the next four-to-five weeks," he said. The team will also take charge of the 11 Copthorne hotels as well as two Millennium sites in Reading and Glasgow.

Overseas, the company benefited from stronger performances in Asia and New York.

Revpar in New York rose to £91.37 from £78.15 following an "aggressive" growth strategy in the city. The Millennium Hilton, which reopened in 2003 after repairs following damage caused by the September 11 2001 terrorist attacks, saw its revpar rise by 23 per cent in the final quarter.

Although this part of the year is not significant for the firm, it said it was encouraged by the early signs for 2005.

Chairman Kwek Leng Beng said: "2004 was a pivotal year for the group. We have finished with a significantly higher hotel operating performance and a substantial profit from asset disposals."

The company, which has 2,200 employees in the UK and 12,300 staff worldwide, has been raising cash through selling property, and in October completed the sale of its 50 per cent stake in New York's prestigious Plaza hotel for £376 million. This helped bring group debt down to £ 479 million from £681 million.

Turnover rose by 4.6 per cent to £547.1 million during the year, while the total dividend will be doubled to 121/2p. At the bottom line, pre-tax profits were £94.8 million compared with £18.7 million last time.