Hotel owner-operator Millennium & Copthorne Hotels NZ Ltd lifted net profit 24.4% in the June half-year to $39.6 million, on revenue up 22.5% to $127.5 million).
The NZX-listed company is a 75.78%-owned (last year 75.2%) subsidiary of Millennium & Copthorne Hotels plc in the UK. The ultimate parent company is Hong Leong Investment Holdings Pte Ltd in Singapore.
Financial highlights (unaudited; June 2017 half in brackets):
Revenue up 22.5% to $127.506 million ($104.101 million)
Gross profit up 24.6% to $77.656 million ($62.326 million)
Pretax profit up 24.5% to $54.664 million ($43.912 million)
Net profit up 24.4% to $39.621 million ($31.841 million)
Net tangible asset backing up 20.2% to 384.34c (319.68c)
Basic & diluted earnings/share up % to 24.4% to 19.05c (15.32c)
Equity up 20.1% to $689.181 million ($573.864 million)
Reserves up 83.5% to $224.858 million ($122.555 million)
NZ hotel operations:
Revenue from the New Zealand hotel operations (14 owned or leased & operated hotels (excluding 5 franchised & 2 managed hotels) up 24.5% to $64.27 million ($51.63 million)
Revpar (revenue:available room) up 13.2% to $133.12 ($117.63)
Occupancy for the owned & leased hotels 83.2% (81.3%)
Steady tourism market but concern at new entrants
Millennium & Copthorne chair Colin Sim said on Thursday the results reflected the steady tourism market in New Zealand plus contributions from M Social Auckland & the Millennium Hotel New Plymouth Waterfront, and growth in section sales from subsidiary CDL Investments NZ Ltd.
Managing director BK Chiu said the commercial accommodation market had become more competitive over the last 2 years with the entry of several traditional & non-traditional suppliers.
“However, we are confident of our competitive position as we focus on the demand side of the equation in selected market segments & the guest experience.”
Mr Chiu said the judicial review brought by several Auckland hotel owner-operators against Auckland Council in relation to the bed tax (accommodation provider targeted rate) was likely to be heard in 2019, so it wouldn’t have any material impact on the company’s full 2018 results. The review seeks to rescind the bed tax on the basis of unfairness & lack of consultation by Auckland Council.
Looking at the remainder of this year, the board expected both the hotel & residential section sales operations to better the company’s 2017 performance in 2018.
In Australia, occupancy at the Zenith Residences at King’s Cross in Sydney was steady at 88.5%. Apartment units are now being put up for sale as the leases expire and one apartment was sold in the first half of 2018.
Related story today: CDL lifts profit by 25% despite big spend on new land
Attribution: Company release.