Millennium & Copthorne Hotels NZ Ltd has bumped its dividend up from 5c to 6c/share, fully imputed, after lifting profit by 6.7% in 2017.
The company said yesterday profit attributable to owners of the parent was $43.1 million ($40.4 million in 2016).
Other result details:
- Profit after tax & non-controlling interests $43.1 million ($40.4 million)
- Profit before tax & non-controlling interests $74.9 million ($70.5 million)
- Group revenue $187.3 million ($172.0 million)
- Shareholders’ funds excluding non-controlling interests $588.9 million ($489.1 million)
- Total assets $828.2 million ($713.9 million)
- Net asset backing (with land & building revaluations and before distributions) as at 31 December 2017 increased to 371.96c/share (308.91c/share)
- Earnings/share 27.25c (25.56c).
Company chair Colin Sim, appointed to replace Wong Hong Ren last year, said the increases in revenue & profit reflected both positive trading conditions in the tourism industry in New Zealand and ongoing positive sales activity from majority-owned residential land developer CDL Investments NZ Ltd.
“On a like-for-like basis, comparing operating hotels in 2016 & 2017 (excluding the Grand Millennium Auckland & M Social Auckland), Millennium & Copthorne’s revenue growth was 7% and net profit before tax increased by 22%, reflecting the outstanding profit conversion efficiencies from both operating hotels & CDL Investments.
NZ hotel operations
“2017 saw the first full year of operations of Grand Millennium Auckland and, after an extensive refurbishment & rebuild of the former Copthorne Hotel on Quay St, the opening of M Social Auckland (pictured above) in the fourth quarter of 2017. Together with other hotels in the Millennium & Copthorne network, we achieved growth in guests from all major geographical segments. Hotel revenues increased by 11.6% to $105.6 million ($94.6 million) and revenue per available room (revpar) increased by 8.2%. This increase in yield was assisted by the company’s domestic customer campaigns & ongoing initiatives to capitalise on the changing dynamics of visitors from China & South-east Asia.
“With an increase in occupancy rates, a resolution to the shortage of labour in the hospitality sector was crucial. To overcome this hurdle and retain talent in our hotels, we are pleased to report that Millennium & Copthorne established a ground-breaking partnership & collaboration with the Government & various institutions. Proactive management drove further gains as we adapted our systems to achieve better cost management, while improving the company’s customer preference ratings.”
Mr Sim said the accommodation industry in Auckland intended to initiate a judicial review of Auckland Council’s targeted rate this year: “In July 2017, Auckland Council narrowly voted to introduce a controversial targeted rate on a selection of accommodation providers. This discriminatory form of tax by the Auckland Council, now implemented, has garnered strong opposition from the sector.”
In Australia, occupancy at the Zenith residences was high at 98% and balcony remediation work fully completed in October. Mr Sim said the company had initiated a marketing campaign for the sale of a selection of its units there this year.
Outlook
Mr Sim said the company expected 2018 to be positive & exciting: “With the addition of Grand Millennium Auckland & M Social Auckland in particular, we expect to benefit from the growing number of tourist & business visitors. Being different hotels that appeal to different market segments, Grand Millennium Auckland & M Social Auckland will assist Millennium & Copthorne in attracting a diverse variety of visitors.”
The company has just acquired the 42-room Waterfront Hotel New Plymouth, which will be branded a Millennium hotel.
Related story today: CDL lifts dividend on 19% profit rise
Attribution: Company release.
