SINGAPORE (May 4): Millennium & Copthorne Hotels (M&C Hotels) reported a doubling of 1Q18 earnings to £26 million ($47 million) from £13 million a year ago, due to higher profit contributions from associated companies as well as a one-off gain from disposal.
Revenue for the quarter fell 3.1% to £68.5 million from £70.7 million a year ago due to a foreign exchange loss of £13 million registered over the period, which led to 2.1% lower reported hotel revenue of £187 million compared to £191 million in 1Q17.
The performance in London was particularly affected by the partial closure of Millennium Hotel London Mayfair, which is normally a significant revenue contributor for the region, together with slower trading at the other London hotels.
Group revenue per available room (RevPAR) fell by 3.1% to £68.48 compared to £70.66 in 1Q17. However, in constant currency terms that excluded deals, closures and currency movements, RevPAR was up by 3.2%.
Notably, included in the group pre-tax profit this quarter is a £3 million gain from the disposal of two Australia hotels that were owned by CDL Hospitality Trusts (CDLHT). The group also benefitted from higher profit contributions from CDL HT as well as its associated company, First Sponsor Group, with total contributions being £3 million higher than last year.
CDLHT is managed by M&C REIT Management, an indirect wholly-owned subsidiary of M&C Hotels. The group also has a 36% stake in First Sponsor Group.
Kwek Leng Beng, chairman of M&C Hotels, acknowledges that performance over the group’s portfolio of hotels over the latest quarter was mixed.
Despite signs of weakness in London, Europe and New York, he also notes the continued positive performance of New Zealand while Asia shows some signs of recovery.
“We are on track to move forward on a number of significant capital investment projects this year, designed to improve returns on Group assets. We also remain alert to acquisition opportunities,” says Kwek.
As at 4:04pm in Singapore, shares in M&C Hotels are trading 0.4% lower at £559 on the London Stock Exchange.
