3rd Nov 2006 07:01
Millennium & Copthorne Hotels PLC03 November 2006 3 November 2006 MILLENNIUM & COPTHORNE HOTELS PLC THIRD QUARTER AND NINE MONTHS RESULTS TO 30 SEPTEMBER 2006 Millennium & Copthorne Hotels plc today announces third quarter and nine monthsto 30 September 2006 results together with a trading update. The Group has aportfolio of 105 hotels located in the Americas, Europe, Middle-East, Asia andNew Zealand. Third quarter highlights • Revenue up 6.5% to £156.1m (2005: £146.6m), up 9.9% at constantexchange rates • Hotel operating profit up 9.8% to £28.0m (2005: £25.5m), up 12.0% atconstant exchange rates • Headline operating profit up 14.0% to £29.3m (2005: £25.7m) (1) • Headline profit before tax up 38.9% to £23.2m (2005: £16.7m) (1) • Headline earnings per share up 5% to 4.3p (2005: 4.1p) (3) • Group RevPAR up by 6.5%, up 9.8% at constant rates of exchange • Sale of long leasehold interests in 3 Singapore hotels and subsequentleaseback gave rise to a £10.1m pre-tax profit, realised £210.6m in cash ofwhich £78.0m was reinvested for a 39.1% stake in a CDLHT(2) • Results of CDLHT and its impact on the Group have improved profitbefore tax by £1.3m, excluding the gains on hotel disposals Nine months highlights • Revenue up 9.6% to £468.8m (2005: £427.6m) • Hotel operating profit up 11.6% to £78.2m (2005: £70.1m) • Headline operating profit up 16.5% to £81.3m (2005: £69.8m) (1) • Headline profit before tax up 37.2% to £59.0m (2005: £43.0m) (1) • Headline earnings per share up 25% to 12.4p (2005: 9.9p) (3) • Group RevPAR up by 9.3% and up by 8.4% at constant rates of exchangewith particularly strong performances in the US and Asia with RevPAR growth of9.6% and 14.1% respectively (at constant rates of exchange) • Group rate growth of 7.4% reflects success in implementing rate-drivenRevPAR strategy Commenting today, Mr Kwek Leng Beng, Chairman said: "We have delivered a strong set of results for the third quarter, particularlyin London, New York and Singapore. The sale of long leasehold interests in threeof our Singapore hotels demonstrates our ability to unlock value and create aplatform to accelerate future portfolio growth. "The Group Chief Executive position has attracted considerable interest frompotential candidates. The Nominations Committee is interviewing an impressiveselection of applicants and will announce an appointment as soon as possible.The new Group Chief Executive will be appointed from outside the company. In themeantime, Wong Hong Ren is acting as Interim Group Chief Executive and MichaelSengol has been seconded from Asia to be Chief Operating Officer for Europe andAsia. "The final quarter has begun well with Group RevPAR for the 1st 28 days ofOctober up by 11.6% on a like-for-like basis. Trading for the full year remainsin line with expectations that were set in April and the group will also benefitfrom the additional profits generated by CDLHT in Singapore that are outlined inthis quarter's results." Enquiries: Robin Lee, Senior Vice President FinanceMillennium & Copthorne Hotels plc +44 (0) 20 7872 2444 Ben Foster/Charlie WatenphulFinancial Dynamics +44 (0) 20 7831 3113 (1) Adjusted to exclude other operating income (2) CDL Hospitality Trusts (a hotel real estate investment trust, newly listedon the Singapore stock exchange) (3) Adjusted to exclude other operating income (net of tax) MILLENNIUM & COPTHORNE HOTELS PLCTHIRD QUARTER AND NINE MONTHS RESULTS TO 30 SEPTEMBER 2006 OVERVIEW Financial headlines Third quarter ended 9 months ended 30 September 30 September 2006 2005 2006 2005 £m £m £m £m Revenue 156.1 146.6 468.8 427.6 Headline operating profit 29.3 25.7 81.3 69.8 Other operating income(1) 10.1 3.3 10.4 16.1 Other(2) (1.0) (1.2) (3.7) (3.1)Profit from operations before interest and tax 38.4 27.8 88.0 82.8 Headline profit before tax(3) 23.2 16.7 59.0 43.0 Profit before tax 33.3 20.0 69.4 59.1 Headline EPS 4.3 4.1 12.4 9.9 Basic EPS 8.9 4.3 17.1 12.5 1. Other operating income represents profit on disposal of operating assets and,for 2005 only, business interruption insurance proceeds 2. Other represents share of interest, tax and minority interests of JV's andassociates. 3. Headline profit before tax excludes other operating income Third quarter overview For the third quarter to 30 September 2006, the Group recorded a pre tax profitof £33.3m (2005: £20.0m). Hotel gross operating profit margin improved to 36.5%compared to 33.5% in 2005. Headline profit before tax increased by £6.5m to£23.2m (2005: £16.7m). Basic earnings per share increased by 107% to 8.9p (2005:4.3p) and headline EPS increased by 5% to 4.3p (2005: 4.1p). Nine months overview For the nine months to 30 September 2006, the Group recorded a pre tax profit of£69.4m (2005: £59.1m). Hotel gross operating profit margin improved to 34.4%compared 33.1% in 2005. Headline profit before tax increased by £16.0m to £59.0m(2005: £43.0m). Basic earnings per share increased by 37% to 17.1p (2005: 12.5p)and headline EPS increased by 25% to 12.4p (2005: 9.9p). SUMMARY OF THIRD QUARTER PERFORMANCE Group RevPAR for the third quarter increased by 9.8% at constant exchange rates.Group occupancies increased by 1.6 percentage points and average rate grew by7.5%. At constant exchange rates, total hotel revenues increased by £12.7m andhotel operating profit by £2.9m to £28.0m. The impact of CDLHT's results on the Group has improved profit before tax by£1.3m. Details on CDLHT and its impact on the Group can be found after thesummary of operational performance. Other operating income of £10.1m for the third quarter represents the profit onselling long leasehold interests in three Singapore hotels to CDLHT. UNITED STATES New York RevPAR growth in New York continues to be rate-driven with average rateincreases of 8.6% while occupancy has grown by 1.6 percentage points. This hasresulted in a RevPAR improvement of 10.7%. GOP margin has increased from 33.6%in Q3 2005 to 35.8% in Q3 2006. Regional US Excluding the impact of the Wynfield Hotel which the Group repossessed inDecember 2005 and the closure of the Four Points Sunnyvale hotel at thebeginning of 2006, Regional US's like-for-like RevPAR increased by 8.1% to£40.69 (2005: £37.64). This was the result of a 1.0 percentage point occupancyincrease and a 6.7% rate increase. The recovery in the region continues to buildupon the momentum that was highlighted at the interim results in August. On anunadjusted basis, RevPAR was up 4.7% to £39.10 (2005: £37.36). EUROPE London London has produced our strongest regional growth in Q3 with RevPAR growing by20.9% to £81.09, further underlining the city's recovery from the events in July2005. A strong Farnborough air show and the benefits of the 142 roomrefurbishment at the Gloucester earlier this year contributed to thisperformance. This growth was driven by both occupancy and rate. Occupancyincreased by 7.8 percentage points to 92.6% (2005: 84.8%) and average rate wasup by £8.46 to £87.57 (2005: £79.11). Rest of Europe RevPAR increased by 3.3% to £51.44 with occupancy up by 1.3 percentage points to74.8%, and average rate up 1.5% to £68.77. Regional UK RevPAR increased 1.7% to £55.23 through increased rate with a small drop inoccupancy. France & Germany Our presence in these two countries remains limited to four hotels. RevPARincreased by 7.0% to £45.44 through an occupancy increase of 4.4 percentagepoints. There was a small reduction in rate of 0.2%. ASIA Our rate-led strategy in Asia achieved an increase in average rate of 13.8% to£56.73. Occupancy increased by 1.6 percentage points resulting in RevPAR up16.1% to £44.70. Our Singapore properties, on a like for like basis with a fullthree months' trading in both periods, have grown RevPAR by 31.4% driven byoccupancy growth and strong rate increases. NEW ZEALAND In New Zealand, where we operate under the Millennium, Copthorne and Kingsgatebrands, RevPAR has shown a 3.1% decline of £0.72 to £22.75 (2005: £23.47). INVESTMENT IN CDL HOSPITALITY TRUSTS AND RELATED TRANSACTIONS Background The Group announced on 26 May 2006 its intention to sell long leaseholdinterests in three of its Singapore hotels for a consideration of S$612.2m(£210.6m - see note a) to CDL Hospitality Trusts ('CDLHT'), a hotel real estateinvestment trust group listed on the Singapore exchange. These hotels were theOrchard Hotel (including the connected shopping centre), M Hotel and CopthorneKing's Hotel. On 19 July 2006, the Group completed the sale of these threeassets to CDLHT: both Orchard and M Hotels on a 75-year lease and King's for theremaining 61 years of a 99-year leasehold interest. CDLHT also acquired theGrand Copthorne Waterfront Hotel ('GCW'), a Group-managed hotel, from theGroup's immediate parent company City Developments Limited for S$234.1m (£80.5m- see note a). CDLHT, in turn, entered into an agreement on 19 July 2006 tolease all four hotels back to the Group and pay a management fee. The CDLHT float completed on 19 July 2006 with an initial share price of S$0.83.As at the end of September, the share price had increased by S$0.23 to S$1.06.The Group received cash of £210.6m from the disposal of its hotels. To develop aplatform to accelerate the Group's portfolio growth and to demonstrate itscommitment to CDLHT, the Group re-invested £78.0m for a 39.1% interest in CDLHT.This is classified as an investment in associates. The Group has recorded theeffects of the transactions in these financial results for the third quarterending 30 September 2006 which include a gain on disposal of £10.1m.Furthermore, this transaction which transformed the Group's ownership structureof these hotels from 100% of 3 hotels to 39.1% of 4 hotels is expected to have anet positive impact on the Group's full year earnings in spite of the dilutionin ownership. CDLHT recently announced a strong set of initial results for theperiod to 30 September 2006. CDLHT's first dividend will be for the period fromlisting date to 31 December 2006 and will be paid on or before 1 March 2007.Subsequent distributions will be semi-annual. (a) Exchange rate used: £1 = S$2.907, as at 19 July 2006. Investment implications The impact of the Group's investment in CDLHT and related transactions is asfollows: Income statement; The impact at EBITDAR is an additional £1.4m for the period.Additionally, the Group will record its £1.3m share of the REIT operatingprofit. This is offset by the lease rental costs of £3.1m leading to a netreduction in headline operating profit of £0.4m. Below the headline profit line,however, the reduced notional group interest costs of £1.7m render theinvestment net earnings enhancing by £1.3m before other operating income. For 2006 there is a £10.1m pre-tax profit from the sale of long leaseholdinterests in the three hotels. Income tax expense has reduced by £2.9m primarilydue to the release of a deferred tax provision. These numbers are calculatedafter the deduction of an unrealised pre-tax profit element of £6.6m (£8.8mpost-tax profit) representing 39.1% of total profit. This is in line with theGroup's accounting policy whereby transactions with associates are eliminated tothe extent of the Group's interest in the entity. This unrealised element hasbeen reflected in a comparable reduction of the Group's cost of investment inassociates shown in the balance sheet. Balance sheet; Property, plant and equipment has been reduced by the net bookvalue of the three hotels in which long leasehold interests were sold, to leaverelatively minor reversionary interest carrying values from the two freeholdhotels disposed (Orchard Hotel and M-Hotel) the net reduction totals £185.7m.Leasehold premium prepayment has also been reduced by £7.6m, being the landelement of the remaining long leasehold interest of the Kings Hotel now assignedto CDLHT. Investments in associates have been: (i) increased by the Group's 39.1%investment in CDLHT of £78.0m which, as noted above, has been reduced by £8.8mof unrealised post-tax profits arising from the sale of the long leaseholdinterests; (ii) increased by equity accounted CDLHT earnings that have not beendistributed by way of dividend and; (iii) reduced by exchange translationdifferences. The funds received from the disposal of the hotels to CDLHT, were used to paydown borrowings, thereby reducing net debt. + Details of CDLHT can be found in its initial public offering document dated 10July 2006. This document can be accessed via the Singapore stock exchangewebsite www.ses.com.sg which provides details on new listings. REVIEW AND OUTLOOK "We have delivered a strong set of results for the third quarter, particularlyin London, New York and Singapore. The sale of long leasehold interests in threeof our Singapore hotels demonstrates our ability to unlock value and create aplatform to accelerate future portfolio growth. "The Group Chief Executive position has attracted considerable interest frompotential candidates. The Nominations Committee is interviewing an impressiveselection of applicants and will announce an appointment as soon as possible.The new Group Chief Executive will be appointed from outside the company. In themeantime, Wong Hong Ren is acting as Interim Group Chief Executive and MichaelSengol has been seconded from Asia to be Chief Operating Officer for Europe andAsia. "The final quarter has begun well with Group RevPAR for the 1st 28 days ofOctober up by 11.6% on a like-for-like basis. Trading for the full year remainsin line with expectations that were set in April and the group will also benefitfrom the additional profits generated by CDLHT in Singapore that are outlined inthis quarter's results." Kwek Leng BengChairman3 November 2006 MILLENNIUM & COPTHORNE HOTELS plcThird quarter and nine months results to 30 September 2006 Consolidated income statement (unaudited)for the third quarter and nine months ended 30 September 2006 Notes Third quarter ended 9 months ended 30 September 30 September 2006 2005 2006 2005 £m £m £m £m Revenue 2 156.1 146.6 468.8 427.6 Cost of sales (64.7) (64.3) (204.7) (189.7) Gross profit 91.4 82.3 264.1 237.9 Administrative expenses (65.7) (58.2) (191.2) (173.4) Other operating income 3 10.1 3.3 10.4 16.1 Group operating profit 35.8 27.4 83.3 80.6 Share of profit of joint ventures and associates 2.6 0.4 4.7 2.2 Analysed between: Operating profit 3.6 1.6 8.4 5.3 Interest (0.1) (0.3) (0.9) (0.8) Taxation (0.2) (0.5) (0.8) (0.9) Minority interests (0.7) (0.4) (2.0) (1.4) Profit from operations before interest and tax 38.4 27.8 88.0 82.8 Analysed between: Headline operating profit 2 29.3 25.7 81.3 69.8 Other operating income 3 10.1 3.3 10.4 16.1Share of interest, tax and minority interests ofjoint (1.0) (1.2) (3.7) (3.1)ventures and associates Finance income 1.5 2.9 4.0 6.4 Finance expense (6.6) (10.7) (22.6) (30.1) Profit before tax 33.3 20.0 69.4 59.1 Income tax expense 4 (6.3) (5.0) (14.5) (17.6) Profit for the period 27.0 15.0 54.9 41.5 Attributable to: Equity holders of the parent 25.9 12.4 49.6 35.8 Minority interests 1.1 2.6 5.3 5.7 27.0 15.0 54.9 41.5 Basic earnings per share (pence) 5 8.9 4.3 17.1 12.5 Diluted earnings per share (pence) 5 8.9 4.3 17.1 12.4 The financial results above all derive from continuing activities. MILLENNIUM & COPTHORNE HOTELS plcThird quarter and nine months results to 30 September 2006 Consolidated statement of recognised income and expense (unaudited)for the nine months ended 30 September 2006 9 months 9 months ended ended 30 September 30 September 2006 2005 £m £m Foreign exchange translation differences (63.8) 55.5 Cash flow hedges: amounts recycled to income statement - 4.0 Actuarial losses arising in respect of defined benefit pension schemes - (2.3) Taxation credit arising on defined benefit pension schemes - 0.6 Income and expense recognised directly in equity (63.8) 57.8 Profit for the period 54.9 41.5 Total recognised income and expense for the period (8.9) 99.3 Attributable to: Equity holders of the parent (3.5) 87.4 Minority interests (5.4) 11.9 Total recognised income and expense for the period (8.9) 99.3 MILLENNIUM & COPTHORNE HOTELS plcThird quarter and nine months results to 30 September 2006 Consolidated balance sheet (unaudited)as at 30 September 2006 As at As at As at 30 September 30 September 31 December 2006 2005 2005 Notes £m £m £mNon-current assets Property, plant and equipment 1,649.1 1,868.2 1,943.4 Lease premium prepayment 74.5 78.9 80.8 Investment properties 45.0 46.3 48.0 Investments in joint ventures and associates 97.5 27.2 29.0 Loans due from joint ventures and associates 25.6 24.5 26.3 Other financial assets 2.5 2.8 2.2 1,894.2 2,047.9 2,129.7 Current assets Assets held for sale - 9.2 - Inventories 4.3 4.1 4.4 Development properties 63.8 81.2 48.5 Lease premium prepayment 1.5 1.0 1.0 Trade and other receivables 66.2 65.6 53.2 Other financial assets 5.5 4.3 5.9 Cash and cash equivalents 134.6 90.4 104.6 275.9 255.8 217.6 Total assets 2,170.1 2,303.7 2,347.3 Non-current liabilities Interest-bearing loans, bonds and borrowings (368.6) (515.3) (530.1) Employee benefits (16.0) (17.0) (16.0) Provisions (1.4) (1.7) (1.6) Other non-current liabilities (6.9) (6.0) (6.8) Deferred tax liabilities (228.3) (228.7) (239.9) (621.2) (768.7) (794.4) Current liabilities Interest-bearing loans, bonds and borrowings (62.4) (82.2) (54.9) Trade and other payables (115.9) (111.1) (100.3) Provisions (0.4) (0.4) (0.4) Income taxes payable (14.5) (21.3) (19.5) (193.2) (215.0) (175.1) Total liabilities (814.4) (983.7) (969.5) Net assets 1,355.7 1,320.0 1,377.8 Equity Total equity attributable to equity holders of the parent 1,235.8 1,194.8 1,250.3 Minority interests 119.9 125.2 127.5 Total equity 7 1,355.7 1,320.0 1,377.8 MILLENNIUM & COPTHORNE HOTELS plcThird quarter and nine months results to 30 September 2006 Consolidated statement of cash flows (unaudited)for the third quarter and nine months ended 30 September 2006 Third quarter ended 9 months ended 30 September 30 September 2006 2005 2006 2005 £m £m £m £m Cash flows from operating activities Profit for the period 27.0 15.0 54.9 41.5 Adjustments for: Depreciation and amortisation 8.5 10.5 26.6 28.0 Share of profit of joint ventures and associates (2.6) (0.4) (4.7) (2.2) Profit on sale of property, plant and equipment (10.1) (3.3) (10.4) (3.3) Employee stock options 0.1 0.3 0.5 0.5 Finance income (1.5) (2.9) (4.0) (6.4) Finance expense 6.6 10.7 22.6 30.1 Income tax expense 6.3 5.0 14.5 17.6 Operating profit before changes in working capitaland provisions 34.3 34.9 100.0 105.8 (Increase)/decrease in inventories, trade and other (20.4) 5.4 (21.9) (14.4)receivables Decrease/(increase) in development properties 1.9 (7.9) 3.5 (20.4) Increase/(decrease) in trade and other payables 10.8 (4.3) 13.5 (4.6) Decrease in provisions and employee benefits - (0.5) (0.2) (0.3) Cash generated from operations 26.6 27.6 94.9 66.1 Interest paid (8.1) (9.3) (24.6) (26.1) Interest received 5.3 1.3 9.2 4.5 Income taxes paid (5.3) (5.0) (13.9) (10.6) Net cash from operating activities 18.5 14.6 65.6 33.9 Cash flows from investing activitiesProceeds from sale of property, plant and equipment,investment properties and assets held for sale 210.6 10.3 210.8 16.3 (Investment in)/proceeds from disposal of financial assets 3.3 (0.4) (1.4) (0.2) Proceeds from disposal of joint venture 1.8 1.1 4.1 6.4 Increase in investment in joint ventures and associates (78.0) - (78.0) - Acquisition of property, plant and equipment (15.8) (8.5) (29.8) (22.4) Net cash from investing activities 121.9 2.5 105.7 0.1 Balance carried forward 140.4 17.1 171.3 34.0 MILLENNIUM & COPTHORNE HOTELS plcThird quarter and nine months results to 30 September 2006 Consolidated statement of cash flows (unaudited) (continued)for the three months and nine months ended 30 September 2006 Third quarter ended 9 months ended 30 September 30 September 2006 2005 2006 2005 £m £m £m £m Balance brought forward 140.4 17.1 171.3 34.0 Cash flows from financing activities Proceeds from the issue of share capital 1.3 0.4 1.8 1.8 Repayment of borrowings (125.3) (261.6) (203.9) (379.1) Drawdown of borrowings - 243.3 80.7 372.0 Payment of finance lease obligations (1.0) (0.9) (2.0) (1.8) Loan arrangement fees - (1.1) (0.6) (1.4) Dividends paid to minorities - - (2.2) (2.1) Dividends paid to equity holders of the parent - - (7.3) (29.8) Net cash from financing activities (125.0) (19.9) (133.5) (40.4) Net increase in cash and cash equivalents 15.4 (2.8) 37.8 (6.4) Cash and cash equivalents at beginning of period 120.8 90.4 103.7 89.8 Effect of exchange rate fluctuations on cash held (2.2) 1.6 (7.5) 5.8 Cash and cash equivalents at end of the period 134.0 89.2 134.0 89.2 Reconciliation of cash and cash equivalents Cash and cash equivalents shown in the balance sheet 134.6 90.4 134.6 90.4 Overdraft bank accounts included in borrowings (0.6) (1.2) (0.6) (1.2)Cash and cash equivalents for cash flow statement purposes 134.0 89.2 134.0 89.2 MILLENNIUM & COPTHORNE HOTELS plcThird quarter and nine months results to 30 September 2006 Notes to the third quarter and nine months results announcement (unaudited) 1. Basis of preparation and accounting policies The third quarter and nine months financial statements for Millennium &Copthorne Hotels plc ('the Company') to 30 September 2006 comprise the Companyand its subsidiaries (together referred to as 'the Group') and the Group'sinterests in jointly controlled and associate entities. The financial information presented in this third quarter and nine monthsresults announcement has been prepared in accordance with the same accountingpolicies as the Group's statutory accounts for the year ended 31 December 2005. Financial statements published by the Group during 2005, including the three andnine month periods to 30 September 2005, had applied an accounting policy ofannual revaluation of hotel land and buildings which was consistent with thepolicy adopted under UK GAAP. For the financial statements for the year ended31 December 2005, this policy was revised for better industry comparability.Now the Group states hotel land and buildings which have been previouslyrevalued at depreciated deemed historic cost. This is their UK GAAP carryingvalue at 1 January 2004 including previous revaluations, subsequent additions atcost, less disposals, depreciation and impairment. As a result of this changeand related adjustments for deferred taxation, previously reported net assets at30 September 2005 of £1,343.8m have decreased by £23.8m to £1,320.0m. The consolidated three and nine months financial statements do not include allof the information required to be included in full annual financial statements. The comparative figures for the financial year ended 31 December 2005 have beenextracted from the Group's statutory accounts for that financial year but do notconstitute those accounts. Those accounts have been reported on by the Company'sauditors and have been delivered to the Registrar of Companies. The report ofthe auditors was (i) unqualified, (ii) did not include a reference to anymatters to which the auditors drew attention by way of emphasis withoutqualifying their report, and (iii) did not contain a statement under section 237(2) or (3) of the Companies Act 1985. The consolidated financial statements ofthe Group for the financial year ended 31 December 2005 are available from theCompany's website www.millenniumhotels.com The third quarter and nine months financial statements were approved by theBoard of Directors on 2 November 2006. 2. Segmental analysis The following segmental analysis is not intended to be a full statutorydisclosure. Third quarter ended 30 September 2006 Regional Rest of Central Total New York US London Europe Asia Australasia costs Group £m £m £m £m £m £m £m £m Revenue Hotel 24.0 31.6 21.6 22.9 43.1 9.6 - 152.8 Property operations - 0.6 - - 0.3 2.4 - 3.3 Total 24.0 32.2 21.6 22.9 43.4 12.0 - 156.1 Hotel gross operating profit 8.6 9.2 10.6 7.2 16.6 3.5 - 55.7 Hotel fixed charges* (5.5) (4.7) (3.1) (4.1) (8.1) (2.2) - (27.7) Hotel operating profit 3.1 4.5 7.5 3.1 8.5 1.3 - 28.0 Property operations operating profit - - - - 0.3 0.9 - 1.2Share of joint ventures and associates operating profit - - - - 3.6 - - 3.6 Profit before central costs 3.1 4.5 7.5 3.1 12.4 2.2 - 32.8 Central costs - - - - - - (3.5) (3.5) Headline operating profit 3.1 4.5 7.5 3.1 12.4 2.2 (3.5) 29.3 Third quarter ended 30 September 2005 Regional Rest of Central Total New York US London Europe Asia Australasia costs Group £m £m £m £m £m £m £m £m Revenue Hotel 22.6 31.6 18.9 22.8 37.3 11.2 - 144.4 Property operations - 0.7 - - 0.4 1.1 - 2.2 Total 22.6 32.3 18.9 22.8 37.7 12.3 - 146.6 Hotel gross operating profit 7.6 8.2 8.7 7.1 12.7 4.1 - 48.4 Hotel fixed charges* (3.9) (4.3) (3.2) (4.0) (5.2) (2.3) - (22.9) Hotel operating profit 3.7 3.9 5.5 3.1 7.5 1.8 - 25.5 Property operations operating profit - 0.2 - - 0.2 0.8 - 1.2Share of joint ventures andassociates operating profit - - - - 1.6 - - 1.6 Profit before central costs 3.7 4.1 5.5 3.1 9.3 2.6 - 28.3 Central costs - - - - - - (2.6) (2.6) Headline operating profit 3.7 4.1 5.5 3.1 9.3 2.6 (2.6) 25.7 9 months ended 30 September 2006 Regional Rest of Central Total New York US London Europe Asia Australasia costs Group £m £m £m £m £m £m £m £m Revenue Hotel 73.0 88.9 60.8 70.8 124.9 32.7 - 451.1 Property operations - 1.9 - - 1.0 14.8 - 17.7 Total 73.0 90.8 60.8 70.8 125.9 47.5 - 468.8 Hotel gross operating profit 24.7 21.4 28.2 21.0 46.6 13.4 - 155.3 Hotel fixed charges* (14.8) (14.0) (9.8) (11.9) (19.8) (6.8) - (77.1) Hotel operating profit 9.9 7.4 18.4 9.1 26.8 6.6 - 78.2 Property operations operating profit - 0.3 - - 0.6 4.9 - 5.8Share of joint ventures andassociates operating profit - - - - 8.4 - - 8.4 Profit before central costs 9.9 7.7 18.4 9.1 35.8 11.5 - 92.4 Central costs - - - - - - (11.1) (11.1) Headline operating profit 9.9 7.7 18.4 9.1 35.8 11.5 (11.1) 81.3 9 months ended 30 September 2005 Regional Rest of Central Total New York US London Europe Asia Australasia costs Group £m £m £m £m £m £m £m £m Revenue Hotel 62.5 83.7 57.5 70.4 109.2 35.4 - 418.7 Property operations - 1.9 - - 1.1 5.9 - 8.9 Total 62.5 85.6 57.5 70.4 110.3 41.3 - 427.6 Hotel gross operating profit 19.1 17.8 27.3 21.3 38.7 14.3 - 138.5 Hotel fixed charges* (9.5) (13.1) (10.1) (12.6) (16.0) (7.1) - (68.4) Hotel operating profit 9.6 4.7 17.2 8.7 22.7 7.2 - 70.1 Property operations operating profit - 0.5 - - 0.6 2.6 - 3.7Share of joint ventures and associatesoperating profit - - - - 5.3 - - 5.3 Profit before central costs 9.6 5.2 17.2 8.7 28.6 9.8 - 79.1 Central costs - - - - - - (9.3) (9.3) Headline operating profit 9.6 5.2 17.2 8.7 28.6 9.8 (9.3) 69.8 *'Hotel fixed charges' include depreciation, amortisation of lease prepayments,property rent, taxes and insurance, operating lease rentals and management fees. 3. Other operating income Third quarter ended 9 months ended 30 September 30 September 2006 2005 2006 2005 £m £m £m £mProfit on sale and leaseback of 3 Singapore hotels -Orchard Hotel, Copthorne Kings Hotel and M Hotel 10.1 - 10.1 - Business interruption insurance proceeds - - - 12.8 Profit on sale of former hotel operating assets - 3.3 0.3 3.3 10.1 3.3 10.4 16.1 4. Income tax expense The £14.5m total income tax charge for the 9 months ended 30 September 2006comprises a UK tax charge of £2.5m and an overseas tax charge of £12.0m (9months ended 30 September 2005 a UK credit of £(1.4)m and overseas tax charge of£19.0m). Income tax expense for the 9 month period presented is the expected tax payableon the taxable income for the period, calculated at the estimated average annualeffective income tax rate applied to the pre-tax income of the period. Taxation for the period comprises both the Group tax charge and the jointventure taxation charge which is included separately within the Group's share ofjoint venture profits (but disclosed on the face of the income statement). The estimated annual effective rate applied to profit before tax excluding theGroup's share of joint venture profits is 22.4%. For the 9 months ended 30September 2005, excluding the Group's share of joint venture profits and alsoexcluding the Millenium Hilton business interruption profit of £12.8m and thetax thereon of £6.0m, the Group's effective tax rate was 26.3%. 5. Earnings per share Third quarter ended 9 months ended 30 September 30 September 2006 2005 2006 2005 £m £m £m £mBasic Profit for period attributable to holders of the parent (£m) 25.9 12.4 49.6 35.8Weighted average number of shares outstanding (m) 291.0 288.4 289.3 286.6 Basic earnings per share (pence) 8.9 4.3 17.1 12.5 DilutedWeighted average number of shares outstanding (m) 291.0 288.4 290.2 287.6 Diluted earnings per share (pence) 8.9 4.3 17.1 12.4 Adjusted earnings per share Profit for the period attributable to holders of the parent (£m) 25.9 12.4 49.6 35.8 Adjustment to exclude other operating income andimpairment (net of tax) (£m) (13.4) (0.5) (13.6) (7.3)Adjusted profit for the period attributable to holdersof the parent (£m) 12.5 11.9 36.0 28.5Weighted average number of shares outstanding (m) 290.7 290.2 289.3 286.6 Adjusted earnings per share (pence) 4.3 4.1 12.4 9.9 6. Dividends Dividends have been recognised within equity as follows: Third quarter ended 9 months ended 30 September 30 September 2006 2005 2006 2005 £m £m £m £m Final ordinary dividend paid for 2005 of 5.62p (for 2004: 4.17p) - - 16.2 11.9 Interim ordinary dividend approved for 2006 of 2.08p(for 2005: 2.08p) 6.0 5.9 6.0 5.9 Total ordinary dividend paid/approved 6.0 5.9 22.2 17.8 Final special dividend paid for 2004 of 6.25p - - - 17.9 6.0 5.9 22.2 35.7 7. Statement of changes to total equity Third quarter ended 9 months ended 30 September 30 September 2006 2005 2006 2005 £m £m £m £m Total recognised income and expense for the period 3.4 33.2 (8.9) 99.3 First time adoption of IAS 39 - - - (5.4) Dividends paid/payable to equity holders of the parent (6.0) (5.9) (22.2) (35.7) Issue of shares in lieu of dividends - - 8.9 - Dividends paid to minority interests - - (2.2) (2.1) Transfer from share of associates - - - 0.6 Share options exercised 1.3 0.4 1.8 1.8 Equity settled transactions 0.1 0.3 0.5 0.5 Net (decrease)/increase in total equity (1.2) 28.0 (22.1) 59.0 Opening total equity 1,356.9 1,292.0 1,377.8 1,261.0 Closing total equity 1,355.7 1,320.0 1,355.7 1,320.0 APPENDIX 1: Key operating statistics (unaudited)for the third quarter ended 30 September 2006 Third quarter Third quarter Third quarter ended ended ended 30 September 30 September 30 September 2006 2005 2005 Reported Constant Reported Currency Currency currencyOccupancy %New York 87.1 85.5Regional US 74.9 74.8Total US 77.7 77.3London 92.6 84.8Rest of Europe 74.8 73.5Total Europe 82.7 78.5Asia 78.8 77.2Australasia 62.1 62.1Total Group 77.1 75.5 Average Room Rate (£)New York 136.68 125.83 131.43Regional US 52.20 49.94 51.98Total US 74.10 69.12 72.06London 87.57 79.11 79.11Rest of Europe 68.77 67.76 68.09Total Europe 78.10 73.19 73.37Asia 56.73 49.86 50.37Australasia 36.64 37.80 43.25Total Group 66.48 61.82 63.73 RevPAR (£)New York 119.05 107.58 112.37Regional US 39.10 37.36 38.88Total US 57.58 53.43 55.70London 81.09 67.09 67.09Rest of Europe 51.44 49.80 50.05Total Europe 64.59 57.45 57.60Asia 44.70 38.49 38.89Australasia 22.75 23.47 26.86Total Group 51.26 46.67 48.12 Gross Operating Profit Margin (%)New York 35.8 33.6Regional US 29.1 25.9Total US 32.0 29.2London 49.1 46.0Rest of Europe 31.4 31.1Total Europe 40.0 37.9Asia 38.5 34.0Australasia 36.5 36.6Total Group 36.5 33.5 For comparability the 30 September 2005 Average Room Rate and RevPAR have beentranslated at 30 September 2006 exchange rates. APPENDIX 2: Key operating statistics (unaudited)for the nine months ended 30 September 2006 9 months ended 9 months ended 9 months ended 30 September 30 September 30 September 2006 2005 2005 Reported Constant Reported Currency Currency currencyOccupancy %New York 86.3 83.7Regional US 68.8 68.2Total US 72.9 71.8London 87.6 84.8Rest of Europe 73.6 72.8Total Europe 79.8 78.2Asia 75.3 73.3Australasia 68.1 68.1Total Group 74.5 73.2 Average Room Rate (£)New York 136.12 122.02 119.86Regional US 51.63 50.07 49.19Total US 74.75 69.24 68.02London 83.34 79.29 79.29Rest of Europe 70.81 69.70 69.77Total Europe 76.91 74.32 74.35Asia 59.33 53.42 51.30Australasia 39.57 39.89 43.02Total Group 67.05 62.97 62.41 RevPAR (£)New York 117.47 102.13 100.32Regional US 35.52 34.15 33.55Total US 54.49 49.71 48.84London 73.01 67.24 67.24Rest of Europe 52.12 50.74 50.79Total Europe 61.37 58.12 58.14Asia 44.68 39.16 37.60Australasia 26.95 27.17 29.30Total Group 49.95 46.09 45.68 Gross Operating Profit Margin (%)New York 33.8 30.6Regional US 24.1 21.3Total US 28.5 25.2London 46.4 47.5Rest of Europe 29.7 30.3Total Europe 37.4 38.0Asia 37.3 35.4Australasia 41.0 40.4Total Group 34.4 33.1 For comparability the 30 September 2005 Average Room Rate and RevPAR have beentranslated at 30 September 2006 exchange rates. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Millennium & Copthorne Hotels