Millennium & Copthorne Hotels NZ Ltd cited 4 reasons this week for doubling its profit for the June half – higher accommodation demand, better hotel productivity, far more section sales by 67%-owned CDL Investments Ltd and an earthquake insurance settlement.
Millennium & Copthorne increased profit after-tax & non-controlling interests by 98% to $23.79 million ($12.01 million). Profit before income tax & non-controlling interests rose 102% to $41.08 million ($20.38 million).
Singaporean company Hong Leong Investment Holdings Pte Ltd owns 75% of Millennium & Copthorne NZ and 67% of CDL through Millennium & Copthorne. Wong Hong Ren, a senior Hong Leong executive who chairs both NZX-listed companies, said the hotel group’s capital expenditure investments, revenue management initiatives & improvements to its overall costs of doing business all helped deliver this half-year result.
The company recognised a $4.31 million one-off gain from the final insurance settlement relating to the Millennium Hotel Christchurch, completing settlement of all matters relating to the 2010 & 2011 earthquakes.
Group revenue and other income increased 36.8% to $95.71 million ($69.95 million), gross profit by 35.1% to $53.04 million ($39.26 million), earnings/share by 98.1% to 15.04c/share (7.59c/share).
Mr Wong said the New Zealand hotel operations (13 owned or leased & operated hotels, excluding 5 franchised one managed hotel) continued to perform strongly and their revenue increased 5.5% to $47.15 million ($44.68 million). Occupancy for those owned & leased hotels increased to 82.3% (78.2%). Revpar (revenue per available room) increased by 14.7% to $108.72 ($94.75).
CDL Investments lifted its after-tax operating profit by 87% to $15.95 million ($8.51 million) on section sales up from 128 in the first half last year to 171.
Mr Wong said occupancy at the Zenith Residences, at King’s Cross in Sydney, was steady at 97%. Litigation involving the property settled in the last few weeks, and Mr Wong said the company expected the owners’ corporation would start remediation of the balconies soon.
Attribution: Company release.