20th Feb 2008 07:01
Millennium & Copthorne Hotels PLC20 February 2008 For immediate release 20 February 2008 MILLENNIUM & COPTHORNE HOTELS PLC FULL YEAR AND FOURTH QUARTER RESULTS Millennium & Copthorne Hotels plc today announces full year and fourth quarterresults to 31 December 2007 together with a trading update. The Group has aportfolio of 112 hotels located in the Americas, Europe, Middle-East, Asia andNew Zealand. Full year highlights • Group revenue up 7.7%(1) to £669.6m driven by strong demand in Singapore, London and New York • Hotel operating profit up 22.1%(1) to £140.5m • Profit before tax up 20.9% to £157.4m • Headline profit before tax up 25.3% to £118.3m(2) (2006: £94.4m) after taking into account a £9.6m write-down of Sunnyvale development property • Basic earnings per share up 47.0% to 50.7p • Headline earnings per share(3) up 47.7% to 32.2p (2006: 21.8p) • Total dividend per share excluding special dividend up 47.1% to 12.50p (2006: 8.50p) • Group RevPAR up by 9.7%(1) • Gearing reduced to 18.3%; interest cover 8.5 times • Launch of Grand Millennium brand with hotels in Kuala Lumpur and Bangkok • Signed five new management contracts and three new franchise contracts in 2007 for properties in Middle East, China and New Zealand • Review of systems and structures completed and being actioned Fourth quarter highlights • Group revenue up 7.9%(1) to £186.6m driven by strong demand in Singapore, London and New York • Hotel operating profit up 16.5%(1) to £46.8m • Profit before tax up 5.9% to £64.4m • Headline profit before tax up 1.7% to £36.0m(2) (2006: £35.4m) • Basic earnings per share up 33.9% to 23.3p • Headline earnings per share(3) up 35.1% to 12.7p (2006: 9.4p) • Group RevPAR up by 11.4%(1) (1) For comparability, statistics for 2006 have been translated at 2007 averageexchange rates (2) Adjusted to exclude other operating income of group, joint ventures andassociates and impairment (3) Adjusted to exclude other operating income of group, joint ventures andassociates, impairment (net of tax) and effect of changes in UK tax legislationto remove claw back on hotel allowances Commenting today, Mr Kwek Leng Beng, Chairman said: "Our 2007 results are in line with market expectations and marked thefourth consecutive year of encouraging revenue and profit growth. The 5-yearcompound annual growth rate of profit before tax is 21.4%. The quality andlocation of our hotels in gateway cities including London, New York andSingapore have been key to the overall strong performance and are expected to bethe cornerstone of our continuing success." "In the first 4 weeks of trading this year, the performance is in linewith our expectations with RevPAR growth of 11%. Given the current turmoil inthe financial markets, we are cautiously optimistic that we will continue todeliver positive results drawing on our past experiences of weathering all kindsof storms." Enquiries:Wong Hong Ren, Interim Group Chief ExecutiveAlan Chapman, Head of Finance Tel: 020 7872 2444Millennium & Copthorne Hotels plc Tim Anderson, Charles Ryland, Rebecca Dietrich Tel: 020 7466 5000Buchanan Communications Analyst briefing A meeting for analysts will be held at 9.00am at the offices of BuchananCommunications, 45 Moorfields, London EC2Y 9AE on Wednesday 20 February 2008. Chairman's Statement Our 2007 results are in line with market expectations and mark the fourthconsecutive year of encouraging revenue and profit growth. The 5-year compoundannual growth rate of profit before tax is 21.4%. The quality and location ofour hotels in gateway cities including London, New York and Singapore have beenkey to the overall strong performance and are expected to be the cornerstone ofour continuing success. The Group's hotel operations have increased operating profit by acompound annual growth rate of 21.2% since 2003 while the margin has increasedfrom 13.0% to 21.6%. This reflects the benefits of driving average rate andmaintaining a tight control on costs. The Group's blueprint business strategy (developed in direct response tothe world-wide downturn in the hospitality industry of 2003) has provedsuccessful. It was adopted by the Board in 2004, updated in 2006 and has beenused by the management to deliver consistent year-on-year growth, reaching yetanother record in 2007. We expect it to serve as the foundation for the Group's future growth. The current economic environment will provide opportunities for expansion. Ourbusiness strategy has delivered a robust balance sheet, a strong asset position,low debt and impressive cash generation capability. We are thus ideallypositioned to capitalise swiftly on promising new opportunities. Financial Performance Profit before tax was £157.4m (2006: £130.2m) and basic earnings per shareincreased by 47.0% to 50.7p while headline earnings per share at 32.2p showed a47.7% increase on the previous year (2006: 21.8p). Headline profit before taxrose to £118.3m, an increase of 25.3% over 2006. Group RevPAR increased by 9.7% based on constant currency terms with doubledigit year-on-year growth in London, New York and Singapore. Dividend The Board is recommending a final dividend of 10.42p per share which togetherwith the interim dividend of 2.08p per share (2006: 2.08p), will bring the totaldividend for 2007 to 12.50p. This is an increase of 47.1% over the 8.50p for2006 (excluding a 4.0p special dividend). As before, the dividend is based onthe growth of profit before tax balanced against the Group's futureoperating needs and investment potential in the current environment as outlinedfurther in the Looking Forward section. Management structures and systems The excellent results we have published today are also a reflection of thesuccessful implementation of the business blueprint which we developed in 2004,fine tuned and updated in 2006. These results also reflect the strength of theMillennium & Copthorne team rather than reliance on any one individual. One consequence of this blueprint is that we have not been affected by thedeparture of some of our senior management team in the past six months. Acommitted management team and close adherence to the business blueprint, underthe guidance of the Board has contributed to the continuing growth and successof the Group. Our strong management team supported by effective teamwork hasenabled us to steer a steady course and has kept us positive and in the rightdirection. Mr Wong's comprehensive review of the management structures and systems has justbeen completed and is now being considered by the Board. Meanwhile, we arecontinuing to improve and streamline management and systems in sales andmarketing, cost management, capital expenditure and will benefit from anyassociated return on investment. On the human resources planning front, our emphasis will be to identifycandidates with commitment to drive forward initiatives, facilitated by theunderlying management systems so as to give the Group long term competitivenessas an owner and operator of assets. Non-Executive Appointment and Retirement In December 2007, we welcomed Connal Rankin to the Board as an independentnon-executive director. Connal's experience during his past 45 yearswith the HSBC Group is invaluable, particularly his expertise in the humanresources field. Simultaneously, John Sclater retired from the Board after more than ten years ofloyal service. John joined the Group immediately prior to its flotation in 1996.The Board wish him every success and happiness in the future. Key Operational Highlights Our hotel in Kuala Lumpur, Malaysia has been rebranded as Grand Millennium Hotelfollowing an extensive refurbishment programme last year. Our hotel in OrientalBay Wellington, New Zealand, has also been rebranded, from a Kingsgate to aCopthorne Hotel. Also in 2007 we opened the Grand Millennium Sukhumvit, a 325-room hotel inBangkok, through our 50% owned joint venture. The three other hotels that weopened in 2007 are in Doha (Qatar), Sharm el Sheikh (Egypt) and Phuket(Thailand). The Group made its first foray into China in 2006 with the management contractfor the Millennium Hongqiao Hotel in Shanghai. 2008 will mark the opening ofthe Grand Millennium Beijing, a 521-room 27-storey hotel located in the heart ofBeijing's financial and business district ahead of the Beijing Olympicsin August. A further two hotels operating under management contracts will alsoopen in China during 2008 in Chengdu and Wuxi. Further hotel openings arescheduled elsewhere for 2008 in Abu Dhabi, Dubai, Kuwait, Sharm el Sheikh(Egypt) and Sheffield (UK). The total number of management contracts increased to 23 in 2007 from 21 in2006. CDL Hospitality Trusts ("CDLHT"), our 38.5% owned REITassociate, has made its second acquisition since its flotation in 2006, beingthe Novotel Clarke Quay Hotel in Singapore, purchased in June 2007 for S$219.6m(£71.4m) bringing its total portfolio of hotels to six. We continue to evaluate our portfolio for improvement in order to remaincompetitive. Looking Forward In the first 4 weeks of trading this year, the performance is in line with ourexpectations with RevPAR growth of 11%. Given the current turmoil in thefinancial markets, we are cautiously optimistic that we will continue to deliverpositive results drawing on our past experiences of weathering all kinds ofstorms. Asia will continue to be a key region of the Group's future developmentplans for 2008, as demand for hotel accommodation there is expected to rise. Theregion performed strongly in 2007 contributing 29.5% of the Group's 2007revenue and 55.0% to the Group's 2007 operating profit before centralcosts respectively. The construction of our 370-room limited-service hotel in Singapore remains ontarget with an opening expected in the first half of 2009. In view of the acuteshortage of hotel rooms in Singapore, this new hotel is expected to bringsignificant benefits to the Group. The Board deliberated on the appointment of a CEO. In the process of itsdeliberations the Board has decided to take a step back and determine whatqualities we require in a CEO after we finalised the management structure. Inthe meantime the Interim CEO Wong Hong Ren will continue to lead our business. While it is too early to assess the repercussions of the slowdown in the USeconomy, the current credit-crunch and its impact on the global economy, myfellow Board members and I are cautiously optimistic that the currentenvironment will remain favourable to companies with strong balance sheets andlow gearing. Finally I would like to thank all our staff for their sterling efforts in 2007and to express my sincere gratitude, as always, to our shareholders, fordemonstrating their confidence in the Group, for remaining committed to ourfuture, and for their firm belief in our ability to deliver further good resultsfor 2008 and beyond. FINANCIAL AND OPERATING HIGHLIGHTS Fourth quarter ended Full year ended 31 December 31 December 2007 2006 2007 2006Financial information £m £m £m £mRevenue 186.6 177.5 669.6 646.3Operating profit 68.1 66.2 171.5 154.2Profit before tax 64.4 60.8 157.4 130.2Profit for the period 72.2 53.2 159.5 108.1Basic earnings per share (pence) 23.3p 17.4p 50.7p 34.5p Performance reportingHotel operating profit 46.8 42.1 140.5 120.3Headline operating profit 42.2 43.4 140.2 124.7Headline profit before tax 36.0 35.4 118.3 94.4Headline earnings per share (pence) 12.7p 9.4p 32.2p 21.8pNet debt 262.1 260.4Gearing (%) 18.3% 20.5% OperationalRevPAR growth at constant rates of exchange* 11.4% 10.4% 9.7% 8.8%Occupancy movement (0.8%) 2.5% (0.4%) 1.4%Average room rate growth at constant rates of exchange* 12.3% 7.6% 10.1% 6.8%Hotel revenue growth at constant rates of exchange* 7.7% 5.8% 9.0% 4.9%Hotel operating profit growth at constant rates of 16.5% 9.9% 22.1% 10.0%exchange* * For comparability, statistics for 2006 have been translated at 2007 averageexchange rates Fourth quarter overview Results for the fourth quarter are shown in Appendices 2 to 5. In overview, forthe fourth quarter to 31 December 2007, the Group recorded a pre tax profit of£64.4m (2006: £60.8m), hotel operating profit increased by £4.7m to £46.8m(2006: £42.1m) and headline operating profit fell by £1.2m to £42.2m (2006:£43.4m). Excluding a £9.6m write-down on the Sunnyvale development property inthe US, headline operating profit increased by £8.4m. Headline profit before taxincreased by £0.6m to £36.0m (2006: £35.4m). SUMMARY OF FULL YEAR PERFORMANCE Revenue Group reported revenue was £669.6m or 3.6% higher than the 2006 sales of£646.3m. The net effect of exchange movements during the year was to decreasereported revenue by £24.3m, mainly driven by a weakening in the US dollar andthe Singapore dollar. The Group benefited from a full year's trading ofCDLHT and the Grand Copthorne Waterfront Hotel Singapore ("GCW")in 2007, compared to the 5.5 months trading post incorporation impacting 2006. Organic business revenue grew by £47.6m or 7.7%, with growth in all regionsexcept Australasia where hotel revenue marginally declined as a result ofpartial closure of properties for refurbishment and the reduced level of salesof Zenith apartments in Sydney through a weakening real estate market. Strongdemand in the Group's three key markets of London, New York andSingapore continue to be the key drivers of performance. Profit from operations Headline profit from operations was £140.2m. This was £15.5m or 12.4% higherthan that reported in 2006. Consistent with the impact on revenue, currency movements had a £4.6m (3.7%)negative impact on the headline profit from operations. Headline operatingprofit also benefited from the additional six and a half months of CDLHT and GCWtrading. After allowing for these two items, headline operating profit fororganic business grew by £27.3m (21.9%) with strong performances in London, NewYork and Singapore. Operating profit at £171.5m was up £17.3m (11.2%) compared with 2006. This wasprincipally driven by the same factors that affected headline operating profit.Net finance costs reduced by £9.9m principally from lower average net debtduring the year and as a result, reported profit before tax increased by £27.2m(20.9%) to £157.4m. Sunnyvale - The Group formerly operated a hotel on the Sunnyvale site inCalifornia, US and a decision to redevelop a new hotel and residentialapartments led to the planned closure of the hotel operations in early 2006 andits demolition thereafter in preparation for site redevelopment. A limitedamount of development work has been carried out to-date. The Group'saccounting policy is to carry development properties at the lower of cost or netrealisable value. An external independent valuation company, having anappropriate recognised professional qualification and recent experience in thelocation and category of the property, prepared a report on the property's value in order to provide the Group's directors with anindependent perspective to their assessment of the property's value.With uncertainties in the US property market, the directors now consider theproperty's net realisable value to be £15.5m and this resulted in aproperty write-down of £9.6m. Share of profit in joint ventures and associates In 2007 the Group's share of profit of joint ventures and associates(net of interest, tax and minority interests) increased by 77.0% to £44.6m from£25.2m in 2006 with CDLHT being the largest contributor to the Group'sshare of 2007 results and the year-on-year increase. The Group has a 38.5%interest in CDLHT as at 31 December 2007 (2006: 39.3%). The Group'sshare of the 2007 results of CDLHT compared with those of 2006 was boosted byCDLHT's acquisition of the Rendezvous Hotel (New Zealand) in late 2006and that of the Novotel Clarke Quay (Singapore) acquired in June 2007. Inaddition it should be noted that the Group only recorded its share of results onCDLHT for 5.5 months in its 2006 results as the investment was subscribed to on19 July 2006, when CDLHT listed on the Singapore Exchange. Of the total £19.4myear-on-year increase, £14.6m was attributable to the Group's share ofthe incremental uplift in property values over that recorded in 2006 -this reflects the burgeoning property market in Singapore where the majority ofCDLHT's property portfolio is based. Other Group operating income Other Group operating income consists of: • Revaluation of investment property relates to two properties.The Tanglin Shopping Centre (Singapore) recorded an uplift in value of £8.7m(2006: £2.6m) and the Biltmore Court and Tower (Los Angeles) recorded no upliftin 2007 (2006: £2.3m). • The £2.0m dilution gain arising on the investment in CDLHT followed theGroup's subscription to a rights issue of stapled securities at adiscount together with the non-participation in a S$32.8m (£10.6m) privateplacement issue, the effect of which marginally diluted the Group'sinterest in CDLHT which at 31 December 2007 was 38.5%. • In 2006 the Group sold three of its Singapore hotels on a sale andleaseback arrangement to CDLHT and recorded a profit of £10.1m. The additional£1.4m profit arising in 2007 on that transaction was as a result of writing-backaccruals that are no longer required on capital expenditure relating to thoseassets. • Business interruption insurance proceeds for 2006 related to a full andfinal settlement of matters with the Group's insurer over claims by itshotel properties in New York resulting from the terrorist attack on the WorldTrade Centre on 11 September 2001. • The Group sold a small number of stapled securities in CDLHT that gave riseto a £0.7m gain (2006: £nil). • Following protracted negotiations, a £1.0m property tax provision in the USset aside on the acquisition of Regal hotels in 1999 was released in 2007. • The share of joint ventures and associates' other operating incomeof £32.3m (2006: £17.7m) represents the Group's share of uplift in valueof properties owned by CDLHT. • The directors undertook an annual review of the carrying value of hotel andproperty assets for indications of impairment and where appropriate externalvaluations were undertaken. An impairment charge of £7.0m (2006: £3.5m) has beenrecorded and principally relates to two hotels in the United States. Financing The net financing charge of £14.1m was £9.9m lower than that of 2006. Theinterest cover ratio, excluding share of joint ventures and associates, otheroperating income and impairment improved from 4.6 times in 2006 to 8.5 times in2007. The reduction in net financing charge principally reflects the overallreduction in net debt of the Group as well as the lower cost of debt. Taxation The Group tax credit excluding the tax relating to joint ventures and associatesis £2.1m (2006: £22.1m tax expense), giving an effective rate of (1.9%) (2006:21.1%). The table below details major adjustments affecting the tax charge. 2007 2006 Tax Tax Profit impact Effective Profit impact Effective £m £m rate % £m £m rate % Profit before tax as reported 157.4 130.2Less share of joint ventures and associates as (44.6) (25.2)reported 112.8 28.2 25.0% 105.0 27.4 26.1%Effect of change in tax rate on opening deferred tax (3.9) (3.5%) 0.3 0.3%Change in UK tax legislation on hotel tax allowances (12.9) (11.4%) - -Other adjustments relating to prior years (13.5) (12.0%) (5.6) (5.3%)Reported profit before tax excluding share of jointventures and associates, tax impact and effectiverate 112.8 (2.1) (1.9%) 105.0 22.1 21.1% Major adjustment factors affecting the 2007 total tax charge: Impact of change in UK tax legislation The tax base of UK hotel building assets has been reinstated to incorporatetheir original cost, this being the tax base (pre-indexation) which is availableto reduce capital gains tax on potential future disposal. This resulted in anoverall estimated increase in the brought forward tax base of £14.5m. Of thistotal, £12.9m has been recognised in the income statement and £1.6m has beenrecognised directly in equity. The latter was in proportion to the amount of thetotal brought forward UK tax liability that had previously been recognisedthrough revaluation reserve. Effect of change in tax rates The credit relates to UK (£3.2m), New Zealand (£0.5m) and (£0.1m) each forMalaysia and Singapore. Adjustments in respect of prior periods The Group's tax charge on ordinary activities is the sum of the totalcurrent and deferred tax charges. The calculation of the Group's totaltax charge necessarily involves a degree of estimation and judgment in respectof certain items whose tax treatment cannot be finally determined untilresolution has been reached with the relevant tax authority or, as appropriate,through a formal legal process. The final resolution of some of these items maygive rise to material profit and loss and/or cash flow variances. Thegeographical complexity of the Group's structure makes the degree ofestimation and judgment more challenging. The resolution of issues is not alwayswithin the control of the Group and it is often dependent on the efficacy of thelegal processes in the relevant tax jurisdictions in which the Group operates.Issues can, and often do, take many years to resolve. It is not anticipated thatthe amount of release in the future will be at the 2007 level. Dividend The Group is recommending a dividend of (12.5p) per share comprising a finaldividend of (10.42p). Taken together with the interim dividend of 2.08p (2006:2.08p), the total dividend of (12.5p) for 2007, an increase of 47.1% over 2006(8.50p excluding a 4.0p special dividend). This dividend for 2007 is covered 4.1times by earnings (2006: 2.8 times). Subject to approval by shareholders at theAnnual General Meeting to be held on 7 May 2008, the final dividend will be paidon 16 May 2008 to shareholders on the register on 25 March 2008. Theex-dividend date of the Company's shares is 19 March 2008. Earnings per share Basic earnings per share grew by 16.2p to 50.7p (2006: 34.5p). Headline earningsper share rose from 21.8p per share in 2006 to 32.2p per share in 2007, a 47.7%increase. The table below reconciles basic earnings per share to headlineearnings per share. 2007 2006 pence pence Reported basic earnings per share 50.7 34.5Other operating income- Group (4.7) (7.5)- Share of joint ventures and associates (11.0) (6.1)Impairment 2.4 1.2Tax effect on the above (0.8) (0.3)Change in UK tax legislation on hotel tax allowances (4.4) -Headline earnings per share 32.2 21.8 FULL YEAR PERFORMANCE BY REGION For comparability, the following regional review is based upon calculations inconstant currency whereby 31 December 2006 average room rate, RevPAR, revenue,gross operating profit and headline operating profit have been translated at2007 average exchange rates. UNITED STATES New York Revenue growth in New York was 12.3% benefiting from high demand throughout theyear which has allowed the emphasis to remain on rate, although there was alsooccupancy growth in the Millennium UN Plaza property. At constant rates ofexchange, average rates increased by 14.0% to £150.20 (2006: £131.79). Combinedwith a marginal overall increase in occupancy, the net result was a 14.1%increase in RevPAR to £130.07 (2006: £114.00). This was the highest RevPARgrowth of our six main geographic segments for the year. The resultant impact ofthis was to drive gross operating profit margins up 2.9 percentage points to40.6% (2006: 37.7%). Headline operating profit was 30.8% higher, reflecting strong profit conversionon the incremental revenue growth. Regional US Regional US operating results were impacted by a £9.6m write-down of theSunnyvale development property as discussed in the summary of full yearperformance on page 4. RevPAR increased by 5.9% to £33.64 (2006: £31.77). This was driven by a 7.2%increase in average room rates to £50.59 (2006: £47.20) offset by a 0.8percentage points fall in occupancy to 66.5% (2006: 67.3%). The top fourMillennium properties had RevPAR growth of between 9.4% and 18.0% with four ofthese properties managing to increase occupancy in addition to rate. Growth wasalmost universal throughout the region, although there was variation betweenproperties. In January the Group commenced a combined $50m (£25.1m) renovation project atthe Millennium Bostonian Hotel in Boston and the Millennium Knickerbocker inChicago to completely transform both hotels to bring a stylish, high-qualityupscale look to both properties. EUROPE London Growth in London revenue was 9.3%, fuelled on the back of strong demand and theGroup policy to seek aggressive average rate increases. Incremental conversionwas 95%. RevPAR increased by 10.4% to £82.23 (2006: £74.50) as a result of strong rategrowth. Average rates improved by 13.6% to £97.31 (2006: £85.63) with anoverall 2.5 percentage point fall in occupancy to 84.5%. The MillenniumGloucester, on the back of a 142-room refurbishment in the first four months of2006, produced a RevPAR growth of 13.7% which was the highest of our Londonproperties. Rest of Europe Revenue growth of 1.0% in the region was disappointing for a variety of reasonsas referred to below but with continued focus on cost efficiency, operatingprofit growth of £2.7m or 22.0%, outstripped that of revenue. RevPAR increasedby 2.7% to £53.57 (2006: £52.17) driven by rate growth of 3.9% from £71.18 to£73.99 with a fall in occupancy to 72.4% (2006: 73.3%). Regional UK RevPAR increased 5.1% to £56.67 driven by a 0.5 percentage point increase inoccupancy to 77.7% (2006: 77.2%) and a 4.5% increase in rate to £72.94 (2006:£69.82). The strongest growth was in Aberdeen and Gatwick whilst our Effinghamand Glasgow properties also grew RevPAR by at least 11%. Growth was notuniversal with three properties suffering reduced RevPAR, mainly as a result ofincreased competition from new properties opening in each of the cities. France & Germany Our presence in these two countries remains limited to four hotels. RevPAR fellby 1.5% to £48.65. The year started with a weak set of results in our two Germanproperties which has continued throughout the year. As a result, we have sold4.6% fewer rooms in Germany which, when combined with a small fall in rate, hasresulted in a RevPAR decrease of 8.7%. Our two French properties showed a 5.3%increase in RevPAR. Middle East Two new management contracts involving new build hotels were signed in the year.The hotels are due to open in 2008. Two new properties in the Middle East region opened in the year, The MillenniumHotel Doha in Qatar, and the Millennium Oy Oun Hotel, Sharm el Sheikh in Egypt.The contract for the Coral Beach Diving Hotel in Marsa Alam in Egypt has nowended. ASIA Revenue growth was £30.3m or 18.1% including an incremental £11.5m from theGrand Copthorne Waterfront and a full year of CDLHT management fees where onlythe last 5.5 months were included in 2006. Headline operating profit increased by £17.8m or 35.7% with the impact of CDLHTamounting to £2.5m. This impact consists of a number of factors, namely (i)additional profit principally from the Grand Copthorne Waterfront for the periodJanuary to mid July and management fees receivable for the management of CDLHTfor the same period; (ii) less new rental charges for the three properties soldto and leased back from CDLHT; and (iii) share of income from our 38.5% stake inCDLHT. Two new joint ventures in China and another in India did not have any materialimpact on the region's results. RevPAR increased by 14.0% to £48.63 (2006: £42.64) driven by a 12.6% increase inaverage room rates to £63.08 (2006: £56.03) and 1.0 percentage point occupancygrowth to 77.1%. Singapore The Grand Copthorne Waterfront has been included in the statistics for thisregion since July 2006 and strong growth continues in this buoyant market. On alike-for-like basis ("LFL") using full year statistics for theGrand Copthorne Waterfront, RevPAR increased 30.5% to £54.11 (2006: £41.47)driven by a 24.9% growth in average room rates to £61.98 (2006: £49.61). In 2006this LFL basis, occupancy increased by 3.7 percentage points to 87.3% (2006:83.6%). Rest of Asia RevPAR figures in the rest of Asia have been affected by the refurbishment worksat the Grand Millennium Kuala Lumpur. RevPAR increased by 3.1% to £44.56 (2006:£43.24). On a LFL basis excluding the Grand Millennium Kuala Lumpur, RevPARincreased by 8.0% to £48.79 (2006: £45.19). There was positive growth in theremaining property portfolio within Asia, with credible performances in Seoul,Jakarta, Manila and Penang. The Millennium Seoul Hilton now benefits from theaddition of a state run casino. During the year the Group launched the Grand Millennium brand. The inauguralhotel for this brand was the Group's former hotel in Kuala Lumpur which,prior to launch underwent major refurbishment in its public areas and reopenedas the Grand Millennium Kuala Lumpur in September. The second Grand Millenniumis our new joint venture property in Thailand, the 325 room Grand MillenniumSukhumvit Bangkok which opened in the final quarter of 2007. A second hotel wasopened in Thailand in November, being the 421 room Millennium Resort Patong,Phuket operated by the Group under management contract. AUSTRALASIA In New Zealand, where we operate under the Millennium, Copthorne and Kingsgatebrands, RevPAR increased by 3.0% to £29.57 (2006: £28.72). Occupancy wasrelatively stable at 69.3% (2006: 69.6%) and average rate increased by 3.4% to£42.67 (2006: £41.27). The Oriental Bay underwent a major refurbishment and hasnow been re-branded as a Copthorne. Operations at the Kingsgate Greenlane ceasedwhen its lease expired in April 2007. A further 35 rooms were added to theCopthorne Hotel & Resort Bay of Islands. The lease of the Copthorne Hotel Wellington Plimmer Towers expires in April2008. As part of the lease the Group has had to accrue for restoration costs andthese amounted to £1.7m and have reduced the hotel's operating profitaccordingly. Amongst the Group's managed and franchised properties it franchised twonew hotels and acquired one new management contract whilst it lost one franchisewhich changed ownership. The Group now has three managed and eleven franchisedproperties in the region. In Sydney, seven Zenith apartments have been sold during the year for a profitof £0.7m (2006: £3.3m). The real estate market has softened in the past year andthe remaining properties are not currently being actively marketed. The shortfall from Zenith was mostly offset by the Group's land developmentoperations in New Zealand. Notes: 1. About Millennium & Copthorne Hotels plc The Group's principal operations are providing hotel rooms to guests inthe following regions: The Americas, Europe, Middle East, Asia and Australasia. The Group owns, operates, manages and franchises hotels, with significantoperations in London, New York and Singapore. In addition, the Group'sproperty expertise allows it to manage its real estate assets actively and tounlock long term value to ensure superior value creation over time. (The Group operates under four brands): Grand Millennium, Millennium, Copthorneand Kingsgate and is primarily focusing on the development of the Millenniumbrand, which is used for its four star deluxe or five star properties in gatewaycities. The Group is also planning to expand the Copthorne brand, primarily inthe UK provinces through redevelopment of sites and management contracts. TheKingsgate brand is mainly located in New Zealand. 2. Financial Schedules PageYear ended 31 December 2007- Consolidated income statement 10- Consolidated statement of recognised income and expense 11- Consolidated balance sheet 12- Consolidated statement of cash flows 13 - 14- Segmental reporting 15 - 17- Notes to the schedules (including Non GAAP measures) 18 - 23- Key operating statistics (Appendix 1) 24 Quarter ended 31 December 2007- Consolidated income statement (Appendix 2) 25- Segmental reporting (Appendix 3) 26- Non GAAP measures (Appendix 4) 27- Key operating statistics (Appendix 5) 28 Consolidated income statementfor the year ended 31 December 2007 Year Year ended ended 31 December 31 December 2007 2006 Notes £m £mRevenue 669.6 646.3Cost of sales (284.8) (277.4)Gross profit 384.8 368.9Administrative expenses (271.7) (261.5)Other operating income 2 13.8 21.6 126.9 129.0 Share of profit of joint ventures and associates 44.6 25.2 Analysed between share of:Operating profit before other income 20.1 13.8Other operating income 32.3 17.7Interest, tax and minority interests 3 (7.8) (6.3)Operating profit 171.5 154.2 Analysed between:Headline operating profit 140.2 124.7Other operating income - Group 2 13.8 21.6Other operating income - Share of joint venturesand associates 32.3 17.7 Impairment (included within administrative (7.0) (3.5)expenses)Share of interest, tax and minority interests ofjoint ventures and associates (7.8) (6.3)Finance income 12.3 5.8Finance expense (26.4) (29.8)Net finance expense (14.1) (24.0)Profit before income tax 157.4 130.2Income tax credit/(expense) 4 2.1 (22.1)Profit for the year 159.5 108.1Attributable to:Equity holders of the parent 149.4 100.1Minority interests 10.1 8.0 159.5 108.1 Earnings per shareBasic earnings per share (pence) 5 50.7p 34.5pDiluted earnings per share (pence) 5 50.6p 34.4p The financial results above all derive from continuing activities. Consolidated statement of recognised income and expensefor year ended 31 December 2007 Year Year ended ended 31 December 31 December 2007 2006 Notes £m £mForeign exchange translation differences 17.4 (84.2)Share of associates other reserve movements 6.9 (2.3)Actuarial gains/(losses) arising in respect of defined benefit 0.7 (1.4)pension schemesIncome tax on income and expense recognised directly in equity 4 2.6 2.6Income and expense recognised directly in equity 27.6 (85.3)Profit for the year 159.5 108.1Total recognised income and expense for the year 187.1 22.8Attributable to:Equity holders of the parent 169.6 25.1Minority interests 17.5 (2.3)Total recognised income and expense for the year 187.1 22.8 Consolidated balance sheetas at 31 December 2007 Notes As at As at 31 December 31 December 2007 2006 £m £mNon-current assetsProperty, plant and equipment 1,709.0 1,699.9Lease premium prepayment 90.0 74.6Investment properties 58.2 49.6Investments in joint ventures and associates 254.5 115.5Loans due from joint ventures and associates 5.4 26.5Other financial assets 4.8 4.5 2,121.9 1,970.6Current assetsInventories 4.9 4.6Development properties 69.6 68.6Lease premium prepayment 1.1 1.3Trade and other receivables 58.2 56.5Other financial assets 9.1 7.2Cash and cash equivalents 156.3 162.3 299.2 300.5Total assets 2,421.1 2,271.1Non-current liabilitiesInterest-bearing loans, bonds and borrowings (304.1) (283.1)Employee benefits (12.9) (15.0)Provisions (1.0) (1.3)Other non-current liabilities (90.9) (93.1)Deferred tax liabilities (205.8) (224.6) (614.7) (617.1)Current liabilitiesInterest-bearing loans, bonds and borrowings (114.3) (139.6)Trade and other payables (113.7) (103.8)Provisions (0.4) (0.4)Income taxes payable (17.4) (18.1) (245.8) (261.9)Total liabilities (860.5) (879.0)Net assets 1,560.6 1,392.1EquityTotal equity attributable to equity holders of the 1,430.4 1,269.1parentMinority interests 130.2 123.0Total equity 7 1,560.6 1,392.1 Consolidated statement of cash flowsfor the year ended 31 December 2007 Year Year ended ended 31 December 31 December 2007 2006 £m £mCash flows from operating activitiesProfit for the year 159.5 108.1Adjustments for:Depreciation and amortisation 28.7 34.5Share of profit of joint ventures and associates (44.6) (25.2)Impairment losses on property, plant and equipment 7.0 3.5Profit on sale of property, plant and equipment (1.4) (11.2)Release of property tax provision (1.0) -Gain on dilution of investment in an associate (2.0) -Profit on sale of stapled securities in an associate (0.7) -Change in fair value of investment properties (8.7) (4.9)Write down of development properties 9.6 -Equity settled share-based payment transactions 0.8 0.6Finance income (12.3) (5.8)Finance expense 26.4 29.8Income tax (credit)/expense (2.1) 22.1 159.2 151.5Increase in inventories, trade and other receivables (2.3) (5.1)Increase in development properties (1.9) (2.5)Increase in trade and other payables 7.6 0.9Decrease in provisions and employee benefits (2.4) (0.3)Cash generated from operations 160.2 144.5Interest paid (22.8) (28.9)Interest received 8.5 7.8Income taxes paid (17.7) (16.3)Net cash from operating activities 128.2 107.1 Cash flows from investing activitiesProceeds from sale of property, plant and equipment and investment 0.3 123.3propertiesProceeds from pre-paid land lease - 87.5Investment in financial assets (5.0) (3.1)Proceeds from disposal of joint venture - 4.0Proceeds from the sale of stapled securities in an associate 1.6 -Dividends received from associates 6.6 -Increase in loan to joint venture (0.6) -Increase in investment in joint ventures and associates (59.6) (81.3)Acquisition of property, plant and equipment (56.8) (34.6)Net cash flow (used in)/from investing activities (113.5) 95.8Balance carried forward 14.7 202.9 Consolidated statement of cash flows (continued)for the year ended 31 December 2007 Year Year ended ended 31 December 31 December 2007 2006 £m £mBalance brought forward 14.7 202.9Cash flows from financing activitiesProceeds from the issue of share capital 1.4 2.2Repayment of borrowings (241.4) (205.0)Drawdown of borrowings 235.8 79.7Payment of finance lease obligations (2.1) (2.0)Loan arrangement fees (0.5) (0.6)Share buy back of minority interests (10.0) -Dividends paid to minority interests (2.2) (2.2)Capital contribution from minority interests 1.9 -Dividends paid to equity holders of the parent (10.5) (9.1)Net cash used in financing activities (27.6) (137.0) Net (decrease)/increase in cash and cash equivalents (12.9) 65.9Cash and cash equivalents at beginning of year 161.5 103.7Effect of exchange rate fluctuations on cash held 7.3 (8.1)Cash and cash equivalents at end of the year 155.9 161.5 Reconciliation of cash and cash equivalentsCash and cash equivalents shown in the balance sheet 156.3 162.3Overdraft bank accounts included in borrowings (0.4) (0.8)Cash and cash equivalents for cash flow statement purposes 155.9 161.5 Segmental reporting The following segmental analysis is not intended to be a full statutorydisclosure. Year ended 31 December 2007 New York Regional London Rest of Asia Australasia Central Total US Europe costs Group £m £m £m £m £m £m £m £mRevenue Hotel 106.5 112.0 92.0 98.0 196.0 45.2 - 649.7Property operations - 1.6 - - 1.5 16.8 - 19.9Total 106.5 113.6 92.0 98.0 197.5 62.0 - 669.6Hotel gross operating profit 43.2 26.8 46.4 30.7 83.2 18.4 - 248.7Hotel fixed charges* (15.6) (17.4) (12.7) (15.7) (36.5) (10.3) - (108.2)Hotel operating profit 27.6 9.4 33.7 15.0 46.7 8.1 - 140.5Property operations operating - (9.8) - - 0.9 7.9 - (1.0)profit/(loss)Central costs - - - - - - (19.4) (19.4)Share of joint ventures and - - - - 20.1 - - 20.1associates operating profitHeadline operating profit/(loss) 27.6 (0.4) 33.7 15.0 67.7 16.0 (19.4) 140.2Other operating income - Group - - - - 12.8 - 1.0 13.8Other operating income - Share of - - - - 32.3 - - 32.3joint ventures and associatesImpairment - (6.1) - (0.9) - - - (7.0)Share of interest, tax and - - - - (7.8) - - (7.8)minority interests of jointventures and associatesOperating profit/(loss) 27.6 (6.5) 33.7 14.1 105.0 16.0 (18.4) 171.5Net financing costs (14.1)Profit before tax 157.4 Segmental reporting (continued) Year ended 31 December 2006 New York Regional London Rest of Asia Australasia Central Total US Europe costs Group £m £m £m £m £m £m £m £mRevenue Hotel 103.1 117.0 84.2 96.8 175.1 44.9 - 621.1Property operations - 2.3 - - 1.4 21.5 - 25.2Total 103.1 119.3 84.2 96.8 176.5 66.4 - 646.3Hotel gross operating profit 38.9 27.7 40.1 28.9 69.4 18.8 - 223.8Hotel fixed charges* (16.3) (18.5) (13.8) (16.6) (29.8) (8.5) - (103.5)Hotel operating profit 22.6 9.2 26.3 12.3 39.6 10.3 - 120.3Property operations operating - 0.2 - - 0.6 8.0 - 8.8profitCentral costs - - - - - - (18.2) (18.2)Share of joint ventures and - - - - 13.8 - - 13.8associates operating profitHeadline operating profit/(loss) 22.6 9.4 26.3 12.3 54.0 18.3 (18.2) 124.7Other operating income - Group 5.5 3.1 - - 13.0 - - 21.6Other operating income - Share of - - - - 17.7 - - 17.7joint ventures and associatesImpairment - (0.6) - (2.9) - - - (3.5)Share of interest, tax and - - - - (6.3) - - (6.3)minority interests of jointventures and associatesOperating profit/(loss) 28.1 11.9 26.3 9.4 78.4 18.3 (18.2) 154.2Net financing costs (24.0)Profit before tax 130.2 * 'Hotel fixed charges' include depreciation, amortisation oflease prepayments, property rent, taxes and insurance, operating lease rentalsand management fees Segmental reporting (continued) Segmental assets and liabilities As at 31 December 2007 New York Regional US London Rest of Asia Australasia Total Group Europe 2007 2007 2007 2007 2007 2007 2007 £m £m £m £m £m £m £mHotel operating assets 284.4 254.2 447.6 220.5 554.9 112.9 1,874.5Hotel operating liabilities (9.6) (26.9) (20.5) (15.8) (137.4) (7.5) (217.7)Investments in joint ventures and - - - - 238.0 16.5 254.5associatesLoans to joint ventures - - - - 5.4 - 5.4Total hotel operating net assets 274.8 227.3 427.1 204.7 660.9 121.9 1,916.7Property operating assets - 34.5 - - 43.1 52.8 130.4Property operating liabilities - (0.1) - - (0.4) (0.7) (1.2)Total property operating net - 34.4 - - 42.7 52.1 129.2assetsDeferred tax liabilities (205.8)Income taxes payable (17.4)Net debt (262.1)Net assets 1,560.6 As at 31 December 2006 New York Regional US London Rest of Asia Australasia Total Group Europe 2006 2006 2006 2006 2006 2006 2006 £m £m £m £m £m £m £mHotel operating assets 292.3 235.9 452.0 216.1 468.8 97.4 1,762.5Hotel operating liabilities (9.6) (26.6) (21.1) (18.0) (43.1) (6.3) (124.7)Investments in joint ventures and - - - - 115.5 - 115.5associatesLoans to joint ventures - - - - 26.5 - 26.5Total hotel operating net assets 282.7 209.3 430.9 198.1 567.7 91.1 1,779.8Property operating assets - 43.3 - - 33.9 42.0 119.2Property operating liabilities - (2.6) - - (0.4) (0.8) (3.8)Total property operating net - 40.7 - - 33.5 41.2 115.4assetsDeferred tax liabilities (224.6)Income taxes payable (18.1)Net debt (260.4)Net assets 1,392.1 1. General information Basis of preparation The fourth quarter and full year results for Millennium & Copthorne Hotels plc('the Company') to 31 December 2007 comprise the Company and itssubsidiaries (together referred to as 'the Group') and the Group's interests in jointly controlled and associate entities. The financial information set out in this preliminary announcement does notconstitute the Company's statutory accounts for the years ended 31 December 2007or 2006. Statutory accounts for 2006 have been delivered to the registrar ofcompanies, and those for 2007, prepared under accounting standards adopted bythe EU, will be delivered in due course. The auditors have reported on thoseaccounts; their reports were (i) unqualified, (ii) did not include references toany matters to which the auditors drew attention by way of emphasis withoutqualifying their reports and (iii) did not contain statements under section 237(2) or (3) of the Companies Act 1985. The consolidated financial statements of the Group for the financial year ended31 December 2006 are available from the Company's websitewww.millenniumhotels.com. The year end results have been prepared applying the accounting policies andpresentation that were applied in the preparation of the Group'spublished consolidated financial statements for the year ended 31 December 2006. The fourth quarter and full year results were approved by the Board of Directorson 19 February 2008. The disposal to CDLHT in 2006 in which the Group holds a 38.5% interest as at 31December 2007 (31 December 2006: 39.3%) represents the property, plant andequipment element of the sale and lease back of three Singapore hotels. Thedisposal amount has been restated in respect of the land lease element of thetransaction on the 75 year leases of the Orchard and M Hotel. In the 2006Financial Statements the proportion of the consideration received as prepaymentby CDLHT of the operating lease of the land was effectively netted off againstthe freehold land value for these two hotels. In adjusting to reflect eachcomponent separately, freehold land has been restated to the value before thetransaction and the deferred income arising from the lease prepayment has beenrecognised on the balance sheet at the value at the date of the transaction of£87.5m with the disposal figure in the note above reduced by the same amount. The deferred income recognised in the balance sheet will be amortised over the75 year term of the lease. At 31 December 2007 an amount of £85.9m (31 December2006: £87.5m) is recognised in the balance sheet as deferred income, £84.7m asnon-current liabilities and £1.2m as current liabilities and an amount of £1.6mhas been amortised and credited to the income statement in the current year. Whilst the financial information included in the preliminary statement has beenprepared in accordance with IFRS, this announcement does not itself containsufficient information to comply with all disclosure requirements of IFRS.Information contained in this announcement has been extracted from full IFRScompliant Report and Accounts that were approved on 19 February 2008. Use of adjusted measures Presentation of headline operating profit The Group presents headline operating profit, this excludes material one-off orunusual items such as profits on disposal of property, fair value adjustments toinvestment property and business interruption insurance proceeds. The Groupbelieves that it is both useful and necessary to report these measures for thefollowing reasons: • they are measures used by the Group for internal performance analysis: and • it is useful in connection with discussion with the investment analyst community Reconciliation of these measures to the closest equivalent GAAP measure,operating profit/(loss) is provided on page 23. Like-for-like growth The Group believes that like-for-like growth which is not intended to be asubstitute, or superior to, reported growth, provides useful and necessaryinformation to investors and interested parties for the following reasons: • it provides additional information on the underlying growth of thebusiness without the effect of factors unrelated to the operating performance ofthe business; and • it is used by the Group for internal performance analysis 2. Other operating income Year ended Year ended 31 December 31 December 2007 2006 £m £mRelease of property tax provision set aside on acquisition of Regal hotels in 1.0 -1999Profit on disposal of stapled securities in CDLHT 0.7 -Gain on dilution of investment in CDLHT (see note below) 2.0 -Profit on sale and leaseback of three Singapore hotels - Orchard Hotel, CopthorneKings Hotel and M Hotel 1.4 10.1Changes in fair value upon revaluation of investment property 8.7 4.9Business interruption insurance proceeds - 5.5Other - 1.1 13.8 21.6 Note: The £2.0m gain on dilution arose from the Group subscribing to a rightsissue at a discount and non-participation in a private placement issue. 3. Share of joint ventures and associates interest, tax and minority interests Year Year ended ended 31 December 31 December 2007 2006 £m £mInterest (3.2) (1.4)Tax (1.4) (1.8)Minority interests (3.2) (3.1) (7.8) (6.3) 4. Income tax (credit)/expense Year Year ended ended 31 December 31 December 2007 2006 £m £mUK (13.5) 0.7Overseas 11.4 21.4Total income tax (credit)/expense in income statement (2.1) 22.1 Year Year ended ended 31 December 31 December 2007 2006 £m £mCurrent taxCorporation tax charge for the year 20.2 18.2Adjustment in respect of prior years (4.0) (6.6)Total current tax expense 16.2 11.6Deferred taxOrigination and reversal of timing differences 5.3 0.3(Reduction)/increase in tax rate (3.9) 0.2Benefits of tax losses recognised 2.7 9.0(Over)/under provision in respect of prior years (9.5) 1.0Change in UK tax legislation in respect of the removal of claw back on hotel (12.9) -tax allowancesTotal deferred tax (credit)/expense (18.3) 10.5Total income tax (credit)/expense in the income statement (2.1) 22.1 Income tax reconciliation Year Year ended ended 31 December 31 December 2007 2006 £m £mProfit before tax in income statement 157.4 130.2Less share of profit of joint ventures and associates (44.6) (25.2) 112.8 105.0Income tax on ordinary activities at the standard rate of UK tax of 30% 33.8 31.5Effects of:Net non-taxable income (0.5) (5.5)Current year losses for which no deferred tax asset was recognised 0.9 0.5Recognition of previously unrecognised tax losses - (0.6)Effect of tax rates in foreign jurisdictions (6.4) 0.4Effect of change in tax rates on opening deferred tax assets (3.9) 0.3Effect of change in UK tax legislation in respect of the removal of claw back (12.9) -on hotel tax allowancesAdjustments to tax charge in respect of prior years (13.5) (5.6)Unrecognised deferred tax assets 0.4 1.1Total income tax (credit)/expense in the income statement (2.1) 22.1 4. Income tax (credit)/expense (continued) Excluding the tax relating to joint ventures and associates, the Group hasrecorded a tax credit of £2.1m (2006: £22.1m expense). This reduced tax expenseis primarily attributable to: (i) the deferred tax impact of a change in UK taxlegislation in respect of the removal of claw back on hotel tax allowances,resulting in an estimated tax credit of £12.9m; (ii) a £3.9m credit in respectof the impact on deferred tax of reduced tax rates and; (iii) a £13.5m credit inrespect of adjustments relating to prior years. A tax charge of £1.4m (2006: £1.8m) relating to joint ventures and associates isincluded in the reported profit before tax. Income tax recognised directly in equity Year Year ended ended 31 December 31 December 2007 2006 £m £mTaxation (expense)/credit arising on defined benefit pension schemes (1.2) 0.4Taxation credit arising in respect of previously revalued property 3.2 2.2Taxation credit arising on share option schemes 0.6 -Total income tax recognised directly in equity 2.6 2.6 5. Earnings per share Year Year ended ended 31 December 31 December 2007 2006 £m £mBasic earnings per share 149.4 100.1Profit for the year attributable to holders of the parent (£m)Weighted average number of shares in issue (m) 294.4 289.9Basic earnings per share (pence) 50.7 34.5Diluted earnings per shareDiluted weighted average number of shares in issue (m) 295.1 290.6Diluted earnings per share (pence) 50.6 34.4Headline earnings per shareProfit for the year attributable to holders of the parent (£m) 149.4 100.1Adjustment to exclude: - Other operating income (net of tax) (£m) (13.8) (22.4) - Impairment (net of tax) (£m) 4.5 3.3 - Share of associates other operating income (nil tax) (£m) (32.3) (17.7) - Change in UK tax legislation on hotel tax allowances (£m) (12.9) -Adjusted profit for the year attributable to holders of the parent (£m) 94.9 63.3Weighted average number of shares in issue (m) 294.4 289.9Headline earnings per share (pence) 32.2 21.8Diluted headline earnings per shareDiluted weighted average number of shares in issue (m) 295.1 290.6Headline diluted earnings per share (pence) 32.2 21.8 6. Dividends Dividends have been recognised within equity as follows: Year Year ended ended 31 December 31 December 2007 2006 £m £mFinal ordinary dividend for 2006 of 6.42p (for 2005: 5.62p) 18.7 16.2Interim ordinary dividend for 2007 of 2.08p (for 2006: 2.08p) 6.2 6.1 24.9 22.3Special ordinary dividend for 2006 of 4.00p (for 2005: Nil) 11.7 - 36.6 22.3 7. Statement of changes to total equity Year Year ended ended 31 December 31 December 2007 2006 £m £m Total recognised income and expense for the year 187.1 22.8Dividends paid/payable to equity holders of the parent (36.6) (22.3)Issue of shares in lieu of dividends 26.1 13.2Dividends paid to minority interests (2.2) (2.2)Share options exercised 1.4 2.2Share buy back of minority interests (10.0) -Capital contribution from minority interests 1.9 -Equity settled transactions 0.8 0.6Net increase in total equity 168.5 14.3Opening total equity 1,392.1 1,377.8Closing total equity 1,560.6 1,392.1 8. Non-GAAP measures Headline operating profit Headline operating profit is the Group's measure of the underlyingprofit before interest and tax. It includes the operating results of jointventures and associates but excludes other operating income (of Group and shareof joint ventures and associates) and impairment. Year Year ended ended 31 December 31 December 2007 2006 £m £m Profit before income tax 157.4 130.2Adjusted to exclude:Fair value adjustments to investment property (8.7) (4.9)Business interruption insurance proceeds - (5.5)Net gain on disposal of property - sale and leaseback of 3 Singapore hotels (1.4) (10.1) - other - (1.1)Gain on dilution of investment in CDLHT (2.0) -Profit on disposal of stapled securities in CDLHT (0.7) -Release of property tax provision set aside on acquisition of Regal hotels (1.0) -in 1999Share of associate (CDLHT) fair value adjustments to investment property (32.3) (17.7)Impairment 7.0 3.5Headline profit before tax 118.3 94.4Add back:Share of results of joint ventures and associates - interest 3.2 1.4 - taxation 1.4 1.8 - minority interests 3.2 3.1Net financing costs 14.1 24.0Headline operating profit 140.2 124.7 As at As at 31 December 31 DecemberNet Debt 2007 2006 £m £m Cash and cash equivalents (as per cash flow statement) 155.9 161.5Bank overdrafts (included as part of borrowings) 0.4 0.8Cash and cash equivalents (as per the consolidated balance sheet) 156.3 162.3Interest-bearing loans, bonds and borrowings - Non-current (304.1) (283.1) - Current (114.3) (139.6)Net debt (262.1) (260.4)Gearing (%) 18.3% 20.5% APPENDIX 1: Key operating statisticsfor the full year ended 31 December 2007 Year ended Year ended Year ended 31 December 2007 31 December 2006 3 December 2006 Reported Constant Reported currency Currency currencyOccupancy %New York 86.6 86.5Regional US 66.5 67.3Total US 71.2 71.7London 84.5 87.0Rest of Europe 72.4 73.3Total Europe 77.8 79.4Asia 77.1 76.1Australasia 69.3 69.6Total Group 74.1 74.4 Average Room Rate (£)New York 150.20 131.79 143.34Regional US 50.59 47.20 51.33Total US 78.62 70.78 76.98London 97.31 85.63 85.63Rest of Europe 73.99 71.18 71.05Total Europe 85.22 78.21 78.14Asia 63.08 56.03 59.07Australasia 42.67 41.27 39.72Total Group 71.74 65.15 67.92 RevPAR (£)New York 130.07 114.00 123.99Regional US 33.64 31.77 34.55Total US 55.98 50.75 55.19London 82.23 74.50 74.50Rest of Europe 53.57 52.17 52.08Total Europe 66.30 62.10 62.04Asia 48.63 42.64 44.95Australasia 29.57 28.72 27.65Total Group 53.16 48.47 50.53 Gross Operating Profit Margin (%)New York 40.6 37.7Regional US 23.9 23.7Total US 32.0 30.3London 50.4 47.6Rest of Europe 31.3 29.9Total Europe 40.6 38.1Asia 42.4 39.6Australasia 40.7 41.9Total Group 38.3 36.0 FOR COMPARABILITY THE 31 DECEMBER 2006 AVERAGE ROOM RATE AND REVPAR HAVE BEEN TRANSLATED AT 2007 AVERAGE EXCHANGE RATES. APPENDIX 2: Consolidated income statementfor the fourth quarter ended 31 December 2007 Fourth quarter Fourth quarter ended ended 31 December 31 December 2007 2006 £m £mRevenue 186.6 177.5Cost of sales (83.7) (72.7)Gross profit 102.9 104.8Administrative expenses (74.5) (70.3)Other operating income 10.4 11.2 38.8 45.7Share of profit of joint ventures and associates 29.3 20.5Analysed between share of: Operating profit before other income 6.8 5.4Other operating income 25.0 17.7Interest, tax and minority interests (2.5) (2.6) Operating profit 68.1 66.2 Analysed between: Headline operating profit 42.2 43.4Other operating income - Group 10.4 11.2Other operating income - Share of joint ventures and associates 25.0 17.7Impairment (included within administrative expenses) (7.0) (3.5)Share of interest, tax and minority interests of joint ventures and (2.5) (2.6)associatesFinance income 5.3 1.8Finance expense (9.0) (7.2)Net finance expense (3.7) (5.4)Profit before income tax 64.4 60.8Income tax credit/ (expense) 7.8 (7.6)Profit for the period 72.2 53.2Attributable to:Equity holders of the parent 68.9 50.5Minority interests 3.3 2.7 72.2 53.2 Earnings per shareBasic earnings per share (pence) 23.3p 17.4pDiluted earnings per share (pence) 23.3p 17.3p The financial results above all derive from continuing activities. APPENDIX 3: Segmental reporting for the fourth quarter ended 31 December 2007 Fourth quarter ended 31 December 2007 New York Regional London Rest of Asia Australasia Central Total US Europe costs Group £m £m £m £m £m £m £m £mRevenue Hotel 32.0 27.4 25.4 27.6 54.8 12.6 - 179.8Property operations - 0.3 - - 0.4 6.1 - 6.8Total 32.0 27.7 25.4 27.6 55.2 18.7 - 186.6Hotel gross operating profit 15.3 5.7 13.2 9.3 24.4 5.1 - 73.0Hotel fixed charges* (4.2) (4.2) (1.6) (3.8) (8.5) (3.9) - (26.2)Hotel operating profit 11.1 1.5 11.6 5.5 15.9 1.2 - 46.8Property operations operating - (9.7) - - 0.4 3.5 - (5.8)profit/(loss)Central costs - - - - - - (5.6) (5.6)Share of joint ventures and - - - - 6.8 - - 6.8associates operating profitHeadline operating profit/(loss) 11.1 (8.2) 11.6 5.5 23.1 4.7 (5.6) 42.2Other operating income - Group - - - - 10.4 - - 10.4Other operating income - share - - - - 25.0 - - 25.0of joint ventures andassociatesImpairment - (6.1) - (0.9) - - - (7.0)Share of interest, tax and - - - - (2.5) - - (2.5)minority interests of jointventures and associatesOperating profit/(loss) 11.1 (14.3) 11.6 4.6 56.0 4.7 (5.6) 68.1Net financing costs (3.7)Profit before tax 64.4 Fourth quarter ended 31 December 2006 New Regional London Rest of Asia Australasia Central Total York US Europe costs Group £m £m £m £m £m £m £m £mRevenue Hotel 30.1 28.1 23.4 26.0 50.2 12.2 - 170.0Property operations - 0.4 - - 0.4 6.7 - 7.5Total 30.1 28.5 23.4 26.0 50.6 18.9 - 177.5Hotel gross operating profit 14.2 6.3 11.9 7.9 22.8 5.4 - 68.5Hotel fixed charges* (1.5) (4.5) (4.0) (4.7) (10.0) (1.7) - (26.4)Hotel operating profit 12.7 1.8 7.9 3.2 12.8 3.7 - 42.1Property operations operating - (0.1) - - - 3.1 - 3.0profit/(loss)Central costs - - - - - - (7.1) (7.1)Share of joint ventures and - - - - 5.4 - - 5.4associates operating profitHeadline operating profit/(loss) 12.7 1.7 7.9 3.2 18.2 6.8 (7.1) 43.4Other operating income - Group 5.5 3.1 - - 2.6 - - 11.2Other operating income - share - - - - 17.7 - - 17.7of joint ventures and associatesImpairment - (0.6) - (2.9) - - - (3.5)Share of interest, tax and - - - - (2.6) - - (2.6)minority interests of jointventures and associatesOperating profit/(loss) 18.2 4.2 7.9 0.3 35.9 6.8 (7.1) 66.2Net financing costs (5.4)Profit before tax 60.8 * 'Hotel fixed charges' include depreciation, amortisation oflease prepayments, property rent, taxes and insurance, operating lease rentalsand management fees APPENDIX 4: Non-GAAP measures for the fourth quarter ended 31 December 2007 Headline operating profit Headline operating profit is the Group's measure of the underlyingprofit before interest and tax. It includes the operating results of jointventures and associates but excludes other operating income (of Group and shareof joint ventures and associates) and impairment. Fourth quarter Fourth quarter ended ended 31 December 31 December 2007 2006 £m £mProfit before income tax 64.4 60.8Adjusted to exclude:Fair value adjustments of investment property (8.7) (4.9)Business interruption insurance proceeds - (5.5)Net gain on disposal of property - sale and leaseback of 3Singapore hotels (1.4) -Gain on disposal of other property - (0.8)Profit on disposal of stapled securities in CDLHT (0.3) -Share of associate (CDLHT) fair value adjustments toinvestment property (25.0) (17.7)Impairment 7.0 3.5Headline profit before tax 36.0 35.4Add back:Share of results of associates and joint ventures - interest 0.8 0.5 - taxation 0.6 1.0 - minority interests 1.1 1.1Net financing costs 3.7 5.4Headline operating profit 42.2 43.4 APPENDIX 5: Key operating statisticsfor the fourth quarter ended 31 December 2007 Fourth quarter Fourth quarter Fourth quarter ended ended ended 31 December 2007 31 December 2006 31 December 2006 Reported Constant Reported currency currency currencyOccupancy %New York 88.8 87.3Regional US 60.7 62.7Total US 67.2 68.4London 82.2 85.4Rest of Europe 72.6 72.3Total Europe 76.9 78.1Asia 79.4 78.4Australasia 72.7 73.9Total Group 73.5 74.1 Average Room Rate (£)New York 174.91 154.38 164.48Regional US 50.65 47.63 50.36Total US 88.63 79.14 84.04London 105.38 92.61 92.61Rest of Europe 76.93 73.15 71.76Total Europe 90.43 82.58 81.86Asia 66.72 57.02 58.36Australasia 45.57 42.87 40.15Total Group 77.48 69.01 70.48 RevPAR (£)New York 155.32 134.77 143.59Regional US 30.74 29.86 31.58Total US 59.56 54.13 57.48London 86.62 79.09 79.09Rest of Europe 55.85 52.89 51.88Total Europe 69.54 64.49 63.93Asia 52.98 44.70 45.75Australasia 33.13 31.68 29.67Total Group 56.95 51.14 52.23 Gross Operating Profit Margin (%)New York 47.8 47.2Regional US 20.8 22.4Total US 35.4 35.2London 52.0 50.9Rest of Europe 33.7 30.4Total Europe 42.5 40.1Asia 44.5 45.4Australasia 40.5 44.3Total Group 40.6 40.3 FOR COMPARABILITY THE 31 DECEMBER 2006 AVERAGE ROOM RATE AND REVPAR HAVE BEEN TRANSLATED AT 2007 AVERAGE EXCHANGE RATES. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Millennium & Copthorne Hotels