29th Oct 2015 07:53
LONDON (Alliance News) - Millennium & Copthorne Hotels PLC on Thursday said its revenue slowed in the third quarter following a weaker performance in its Asian hotels. Though revenue remains ahead in the year to date, pretax profit was lower, it said.
The FTSE 250-listed hotel operator said its pretax profit in the third quarter was GBP36.0 million, a 28% fall on the GBP50.0 million it made a year earlier, and this dragged its pretax profit for the nine months to the end of September down 9.3% to GBP98.0 million from GBP108.0 million a year earlier.
Revenue fell to GBP211.0 million from GBP217.0 million in the third quarter, with nine-month revenue still slightly higher at GBP615.0 million, up from GBP597.0 million. Revenue per available room edged lower in the third quarter to GBP77.66 from GBP77.71 but was tracking ahead for the year to date, up to GBP71.43 from GBP69.83.
Millennium & Copthorne said the slowdown in its revenue per available room was driven by the performance of its Asian hotels, which were hit hard in the quarter by the weakness showing in the Chinese economy. Declines also were seen its London and New York hotels in the third quarter, mainly due to room closures during refurbishment programmes.
The adverse trading in Asia also was blamed for the decline in pretax profit, particularly in its Singapore operation where the company is facing pressure on labour costs along with the wider concerns about an economic slowdown in the region.
"Revenue and profit were lower in the third quarter because of weaker performance by our hotels in Singapore and Rest of Asia. The Singapore market is unlikely to stabilise until the end of 2017 as hotel room inventory continues to grow," said Chairman Kwek Leng Beng.
"Pressures on financial performance are expected to persist, especially in Asia. The group remains focused on controlling costs, optimising sales opportunities and realising the potential of recently refurbished hotels. The company is developing its talent pool, with a number of strategic appointments in prospect," he added.
By Sam Unsted; [email protected]; @SamUAtAlliance
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