19th Feb 2016 07:47
LONDON (Alliance News) - Millennium & Copthorne Hotels PLC on Friday slashed its dividend for 2015 after suffering a drop in profit, despite revenue benefiting from favourable movements in foreign exchange rates.
The hotel operator reported a 42% drop in pretax profit to GBP109 million in 2015 from GBP188 million in 2014, despite revenue growing 2.5% to GBP847 million from GBP826 million, leading it to slash its total dividend to 6.42 pence from 13.59p.
In the fourth quarter, pretax profit fell by a huge 86% to GBP11 million from GBP80 million, as revenue rose 1.3% to GBP232 million from GBP229 million.
Millennium & Copthorne said the fall in profit was because of a GBP43 million net charge as a GBP33 million net revaluation gain on investment properties failed to fully offset a GBP76 million impairment loss. The company had warned last Friday it would be making the charge.
However, even without the charge, pretax profit still would have declined by 5.6% to GBP152 million from GBP161 million.
Revenue growth was on the back of contributions from hotel acquisitions and the opening of the Millennium Mitsui Garden Hotel Tokyo, together with favourable foreign exchange rate movements, Millennium & Copthorne said.
Revenue per available room, meanwhile, grew 0.6% in the full year to GBP71.98 from GBP71.55, although it did decline by 3.7% to GBP73.64 from GBP76.48 in the fourth quarter, partly due to refurbishments at hotels in London and New York.
"In 2015, global hospitality markets were impacted by falling commodity prices, mounting concern with regard to terrorism, health advisory travel alerts and uncertainty regarding growth of the Chinese market. These external factors, which negatively affected the year's performance, are expected to continue in the current year," Chairman Kwek Leng Beng said in a statement.
"Although the short-term trading outlook is uncertain, the group has a long-term perspective. Management considers that asset ownership is key to creating long-term value in a changing hospitality industry landscape. The group will therefore continue to focus on its strategy of ownership and management of hospitality real estate assets. In 2016, management will work on optimising returns on the group's assets by undertaking refurbishment projects, whilst remaining vigilant with regard to controlling costs," he added.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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