1st May 2014 09:05
LONDON (Alliance News) - Millennium & Copthorne Hotels PLC Thursday reported lower first quarter revenue and profit as the strength of the pound reduced its overseas earnings, but revenue was up at constant exchange rates as overall occupancy and room rates rose, helped by a recovery in its Asian hotels.
The hotel operator also said the growth in revenue per available room had accelerated in the first four weeks of the second quarter, as it continued to see an improvement in its Asian hotels.
The company joins a long list of British companies reporting a hit from the strength of the pound in recent months, which reduces overseas earnings when they are translated back to sterling.
Its pretax profit fell to GBP20.1 million in the three months to end-March, from GBP23.8 million a year earlier, as revenue declined 0.3% to GBP175.3 million. Revenue per available room fell 3.2%.
However, at constant currencies, revenue was up 5.9% and revenue per available room was up 2.5%, driven by the company's London and European hotel revenues.
"We made good progress on strategic growth initiatives, including completion of The Chelsea Harbour Hotel acquisition. With Europe and US showing signs of increasing stability, we remain cautiously optimistic about the rest of the year," Chairman Kwek Leng Beng said in a statement.
The company said it had anticipated harsher trading conditions by adjusting trading strategies in some markets, limiting the impact on revenue per available room.
It said the performance of its regional US hotels was helped by the return of Millennium Minneapolis, which was closed for refurbishment during the comparative period last year, and by the closure of Millennium St Louis in January this year, one of the region's poorest performing hotels in revenue per available room terms. In Asia, it said it had succeeded in halting the decline in revenue per available room it has reported over recent quarters, with higher occupancy compensating for slightly reduced room rates.
"The trading pattern in the US and Europe is improving. However, in Asia trading conditions continue to be affected by social and political uncertainty, which is likely to impact performance going forward," the company said.
"Despite this, in the four weeks ended 28 April 2014, Asia RevPAR increased in constant currency terms by 4.0%. London was up 2.4%. US was up 5.9%. Australasia was up 11.9%. Group RevPAR was up by 4.2% in constant currency terms for the four week period," it added.
Millennium & Copthorne Hotels shares were up 1.2% at 561.50 pence Thursday morning.
By Steve McGrath; [email protected]; @stevemcgrath1
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