6th Nov 2013 10:49
LONDON (Alliance News) - Millennium & Copthorne Hotels PLC said its profits rose in the third quarter, buoyed by growth in occupancy and a higher profit share from its associate company, First Sponsor Capital Limited, which opened a new hotel in Chengdu, China, in September.
The hotel chain, which owns and manages hotels worldwide, said trading held steady in the three months to September 30, and it is currently trading broadly in line with management expectations, despite more competitive conditions in Singapore and South Korea, and the impact of hotel refurbishments in Taipei.
Millennium & Copthorne Hotels reported a 6% increase in its pretax profit to GBP40.4 million for the quarter, compared with GBP38.1 million a year earlier.
Despite higher profits in the third quarter, the group reported a 18% fall in profit for the first nine months of the year, to GBP95.9 million from GBP117.1 million a year earlier, due to an increase in the cost of sales and administrative expenses.
It said that a lower operating profit and a lower profit share from its joint ventures and associates also contributed to the nine-month fall. The company incurred a charge of GBP4.4 million relating to its joint ventures.
The group also said it plans to sell its stake in the Tanglin shopping centre in Singapore. The company's subsidiary, King's Tanglin Shopping Pte Limited, owns a 34% interest in the shopping centre, including 83 retail units and a 325-spare car park. It said it has signed a collective sale agreement, although the process is at a very preliminary stage and the disposal is highly conditional depending on the approval of the other share owners.
Millennium & Copthorne said that third quarter revenues rose by 3.1% to GBP197.1 million, from GBP191.2 million the prior year, due to revenue improvements from its New York hotels, improved trading in its regional US division, the disposal of land in new Zealand, and reinstated room sales from recently refurbished hotels.
The group said that revenue per available room by rose 3.4%, or GBP2.45, in the three month period to September 30, to GBP73.68 compared with GBP71.23 a year earlier.
It also said that occupancy during the third quarter period rose to 76.5%, which helped offset a slight fall in the average room rate to GBP96.35, from GBP97.08 the year before.
For the first nine months of the year, total revenue increased by 0.2% to GBP566.2 million, but operating profit was down by 18% to GBP76.6 million. The company said that revPAR grew by 3.9% in the nine-month period to GBP69.42 from GBP66.81.
The group said its refurbishment programme for its existing hotels is making progress, and it has so far spent GBP84.1 million on investing mainly in the refurbishment of several key hotels in New York, Seoul, Minneapolis and Taipei.
Millennium & Copthorne said it plans to spend a further GBP16.8 million on the programme in the final quarter of the year, bringing the total spend for the year, slightly less than previously expected.
Shares in Millennium & Copthorne Hotels were 2.1% higher Wednesday morning at 593.00 pence per share.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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