14th Jun 2016 08:17
LONDON (Alliance News) - Elegant Hotels Group PLC on Tuesday reported growth in profit in the first half of its financial year, but warned that a reduction in customer demand due to political uncertainty in the UK and the spread of the Zika virus will hit sales and earnings in the full year.
The operator of hotels in Barbados said its pretax profit in the six months ended March 31 grew to USD17 million from USD12.1 million in the same period the year before, as revenue rose very slightly to USD36.5 million from USD36.4 million on the back of a small increase in revenue per available room to USD320 from USD319.
Elegant Hotels said occupancy declined to 69% in the first half from 71% a year before, although this was compensated for by an increase in average daily rate to USD464 from USD450. The company warned that it has seen a reduction in customer demand as a result of political uncertainty in the UK and publicity about the Zika virus, the latter which has also resulted in room cancellations and substantial competitor discounting.
Elegant Hotels added that these factors, as well as a rise in lower-cost accommodation options in Barbados, also had a knock-on effect on bookings for the second half of the year compared with the same time a year previously.
With the major booking period now over, Elegant Hotels said it now expects full-year like-for-like sales to be slightly below the prior year, with adjusted earnings before interest, tax, depreciation and amortisation between USD20 million and USD21 million.
Adjusted Ebitda in the ended September 30, 2015 was USD22.2 million.
Meanwhile, profit in the first half of the current year was helped by lower interest payments, due to reduced net debt following its initial public offering last year and lower finance costs.
Elegant Hotels will pay an interim dividend of 3.5 pence per share, up from 1.75p a year before.
"The group now owns around 29% of the quality leisure tourist room stock in Barbados and our objective remains to continue extending this position while also expanding further into the Caribbean region," Chief Executive Sunil Chatrani said in a statement.
"Whilst there are currently a number of challenges that are impacting the trading performance of both Elegant Hotels and the wider luxury hotel market in Barbados, we continue to be confident in the group's long-term growth prospects," Chatrani added.
Shares in Elegant Hotels were trading down 9.7% at 88.50 pence on Tuesday morning.
By Karolina Kaminska; [email protected] @KarolinaAllNews
Copyright 2016 Alliance News Limited. All Rights Reserved.
Related Shares:
EHG.L