Half Yearly Report

For Immediate Release 30 July 2015

MILLENNIUM & COPTHORNE HOTELS PLC

INTERIM MANAGEMENT REPORT

Half year and second quarter results to 30 June 2015

Highlights for the first half 2015:

Highlights for the second quarter 2015:

· Group RevPAR grew by 4.0% to £68.28. In constant currency, RevPAR increased by 0.8% from £67.75 to £68.28. Average room rate increased by 2.7% to £96.61 (H1 2014: £94.10) and occupancy fell by 1.2 percentage points to 70.7% (H1 2014: 71.9%).

· Revenue increased by 6.3% mainly as a result of acquisitions in 2014, together with favourable foreign exchange movements.

· Continuing pressure in Asian markets resulting in Asia RevPAR falling by 10.3% for the first six months of 2015.

· Profit before tax increased by 6.9% reflecting higher contribution from joint ventures and associates and lower central costs resulting from the reversal of surplus legal provisions following settlement of certain claims.

· Good progress made on hotel refurbishments, including Millennium Bailey's Hotel London and completion of work at Millennium Alaskan Hotel Anchorage, now re-branded as The Lakefront Anchorage.

· The Board has declared an interim dividend of 2.08p per share (H1 2014: 2.08p).

Mr Kwek Leng Beng, Chairman commented:

"The Group continues to focus on its successful long-term strategy of owning and managing hotel assets. In the short-term, we see continuing pressure in our key hospitality markets with uncertainty in Asian economies, in the Middle East and in the Eurozone affecting business and leisure travel plans."

Enquiries

Millennium & Copthorne Hotels plc Tel: +44 (0) 2078722444

Aloysius Lee, Chief Executive Officer

Jonathon Grech, Group General Counsel and Company Secretary

Peter Krijgsman, Financial Communications (Media)

FINANCIAL PERFORMANCE

For the six months ended 30 June 2015 revenue increased by 6.3% to £404m (H1 2014: £380m). This was a result of additional income from new hotels acquired by the Group in 2014 and from hotel rooms returning to inventory following refurbishment.

Foreign currency movements also increased the Group's reported currency results. In constant currency, Group revenue increased by 3.3% (H1 2014: £391m). On a like-for-like1 basis, revenue increased by 0.5%.

Profit before tax rose by 6.9% to £62m (H1 2014: £58m). The main drivers behind this increase were higher contributions from joint ventures and associates, in particular First Sponsor Group Limited ("FSGL") and the release of legal provision following a lower settlement which offset the Group central cost by £3m. In constant currency, profit before tax increased by 5.1% (H1 2014: £59m). Like-for-like1 profit before tax increased by 2.9%.

Note 1: Like-for-like comparisons exclude the impact of acquisitions, closures and Glyndebourne (sale of the remaining three units of condominium in Q1 2014) and are stated in constant currency terms.

Hotel Operations

Group RevPAR in constant currency increased by 0.8% to £68.28 (H1 2014: £67.75), helped by contributions from recent acquisitions and improved performance in New Zealand, Rest of Europe and Regional US. Trading conditions in key gateway cities were challenging during the first half of 2015, with London, New York and Singapore all registering lower RevPAR for the period, compared to the same time last year. Like-for-like Group RevPAR fell by 3.3% to £65.24 (H1 2014: £67.46).

# In constant currency whereby 30 June 2014 RevPAR and average room rates have been translated at average exchange rates for the period ended 30 June 2015.

US

RevPAR for the US region increased by 7.1% to £73.73 reflecting the contribution from Novotel New York Times Square, growth in the Regional US, particularly at the Millennium Harvest House Boulder, Millennium Knickerbocker Hotel Chicago and The McCormick Scottsdale, which were recently refurbished. In New York, excluding the impact of Novotel New York Times Square, RevPAR fell by 6.4%. Rate pressures across the city were reflected in lower RevPAR at ONE UN and Millennium Broadway Hotel New York.

Europe

London RevPAR was down 4.2%. Excluding The Chelsea Harbour Hotel, London RevPAR decreased by 3.8%. Lower RevPAR at Millennium Bailey's Hotel London was the largest factor in that decline due to the refurbishment of guestrooms which started at the end of last year. Most of the other European hotels outside London posted RevPAR gains. Copthorne Hotel Aberdeen was the notable exception, with RevPAR falling due to reduced business from the oil and gas sector.

Asia

Asia RevPAR fell by 10.3% with decreases in both occupancy and average room rate. Singapore occupancy was stable around 86.3% with average room rate falling by 8.2% as a result of increased room supply and lower visitor numbers in each of the first four months of the year. The strong Singapore dollar, relative to other Asian currencies, is putting a brake on the recovery of visitor numbers.

In rest of Asia, the increase in hotel revenues reflected the normalisation impact of all guest rooms in the east wing of Grand Hyatt Taipei being opened in H1 2015 following refurbishment last year. This masked the underlying performance in the region, with general softness in the market further impacted by the Middle East Respiratory Syndrome ("MERS") outbreak in South Korea. Millennium Seoul Hilton was particularly affected by MERS, with double digit RevPAR falls. Competition in Taipei is becoming more intense with more local and international hotel groups entering the market.

Australasia

Australasia was the fastest growing region in RevPAR terms. The 15.9% increase was driven by higher occupancy and average room rate. New Zealand continues to benefit from increased visitors from Asia, particularly China, and increased airline capacity into the country. The 2014 refurbishment of Copthorne Hotel Palmerston North is also contributing to higher revenues and RevPAR.

Development

In December 2014, Urban Environmental Improvement approval was granted for the Group's land in Seoul, South Korea to be used for lodging facilities. Preparation for the next stage of authority submission to the Construction Deliberation Commission is in progress and expected to be submitted by end of the year. The Group is optimistic that work will commence next year.

The Group is considering a range of options with regard to the future of the freehold site occupied by the Millennium Hotel St Louis, which was closed in January 2014.

As previously indicated, the Group is also considering its options with respect to its freehold interest in a 35,717m2 mixed-use landsite at Sunnyvale, California. A project team has been engaged and in June 2015, preliminary approval was obtained from the local authority to amend the current site plan in order to incorporate retail use and modify the previously approved hotel and residential uses.

Hotel refurbishments

The Group has made good progress in discussions with all relevant third parties on the scope and nature of the refurbishment programmes for the Millennium Hotel London Knightsbridge and Millennium Hotel London Mayfair.

Work on the third to fifth floor guestrooms at Millennium Bailey's Hotel London is complete. The remaining first and second floors and public areas are scheduled for completion in October 2015.

In the US, refurbishments of Millennium Hotel Buffalo and Millennium Hotel Durham are underway and will complete in Q4 2015 and Q1 2016 respectively. Work on Millennium Biltmore Hotel Los Angeles will complete in late 2016. Refurbishment has been completed for all 248 guestrooms and common parts of Millennium Alaskan Hotel Anchorage, which has been re-branded as The Lakefront Anchorage.

Refurbishment of the East Tower of ONE UN New York is scheduled to start in November 2015 and complete in April 2016, with a total approved budget of approximately US$38m (£24m).

Refurbishment of all guest accommodation, corridors and a Chinese restaurant at Grand Hyatt Taipei is complete. Work on the main Café / All Day Dining Restaurant started in June and is scheduled to finish by the end of September. Remaining work on the main lobby and two other F&B outlets is scheduled to complete by the end of this year.

Refurbishment of 237 deluxe guest rooms and corridors at the Millennium Seoul Hilton commenced in April and is scheduled to complete in August. Work on the final phase of 113 deluxe guestrooms and corridors will commence thereafter, with completion scheduled for October 2015.

In New Zealand, Copthorne Hotel Harbour City Auckland closed this month for a major refurbishment valued at over NZ$40m (£17m) that will enable the Group to capitalise on the hotel's premium waterfront location in New Zealand's gateway city. Work will include complete replacement of the building services, new guestrooms and public areas. The hotel is expected to re-open in early 2017.

Additional projects are under consideration including refurbishment of Millennium Broadway Hotel New York. All projects are subject to relevant consents and phasing to minimise impact on earnings.

Other Group Operations

CDL Hospitality Trusts ("CDLHT") which is consolidated within the Group's accounts under IFRS 10 and in which the Group owns a 36% stake, reported its results for the first six months of 2015 to the Singapore Exchange on 29 July 2015.

FSGL, an associated company reported its results for the first six months of 2015 to the Singapore Exchange on 24 July 2015.

Hotel inventory and pipeline

The Group opened a new Millennium hotel in Kuwait during the second quarter of 2015, under management contract. The Group currently has 124 hotels offering 34,578 rooms.

The Group's pipeline at 30 June 2015 comprises 19 hotels offering 6,345 rooms. These are mainly properties to be operated under management contract.

Financial Position

At 30 June 2015, the Group had net debt of £540m (Dec 2014: net debt £525m).  Excluding CDLHT, the net debt was £201m (Dec 2014: net debt £185m).

The Group has a total of £172m of undrawn committed bank facilities at 30 June 2015. Most of the facilities are unsecured, with unencumbered assets representing 94% of fixed assets and investment properties.

Dividend

The Board has declared an interim dividend of 2.08 pence per share. The interim dividend will be paid on 2 October 2015 to shareholders on the register at the close of business on 14 August 2015. The ex-dividend date of the Company's shares is 13 August 2015. The Board will consider the full dividend for the year following the close of the financial year.

Outlook

On a constant currency basis, Group RevPAR was down 2.2% for the three weeks ended 21 July 2015, with London down 3.8%, New York down 2.3% and Singapore down 7.2%. Excluding Hotel Grand Palace Rome (acquired in October 2014), Group RevPAR was down by 2.7%.

This interim management report contains certain statements that are or may be forward-looking with respect to the financial condition, results or operations and business of Millennium & Copthorne Hotels plc. By their nature forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. Undue reliance should not be placed on forward looking statements which speak only as of the date of this document. The Group accepts no obligation to publicly revise or update these forward-looking statements or adjust them to future events or developments, whether as a result of new information, future events or otherwise, except to the extent legally required.

Condensed consolidated income statement

for the half year ended 30 June 2015

The financial results above were derived from continuing activities.

Condensed consolidated statement of comprehensive income

for the half year ended 30 June 2015

Condensed consolidated statement of financial position

as at 30 June 2015

Condensed consolidated statement of cash flows

for the half year ended 30 June 2015

Condensed consolidated statement of changes in equity

for the half year ended 30 June 2015

¹ Restated due to the adoption of IFRS 10.

Notes to the condensed consolidated financial statements

1. General information

Basis of preparation

The consolidated financial statements in this interim management report for Millennium & Copthorne Hotels plc ("the Company") as at and for the half year ended 30 June 2015 comprise the Company and its subsidiaries (together referred to as "the Group") and the Group's interests in joint ventures and associates.

These interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting. They do not include all the information required for a complete set of IFRS financial statements. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance since the last annual consolidated financial statements as at and for the year ended 31 December 2014.

The comparative figures for the financial year ended 31 December 2014 are not the Company's statutory accounts for that financial year. Those accounts have been reported on by the Company's auditor and delivered to the registrar of companies. The report of the auditor was (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

These interim financial statements were authorised for issue by the Company's Board of Directors on 29 July 2015.

Use of judgements and estimates

The financial statements were prepared on a going concern basis supported by the Directors' assessment of the Group's current and forecast financial position, and forecast for the foreseeable future; and are presented in the Company's functional currency of sterling, rounded to the nearest millions.

In preparing these interim financial statements, management has made judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

The significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those applied to the consolidated financial statements as at and for the year ended 31 December 2014.

Significant accounting policies

Except as described below, the accounting policies applied in these interim financial statements are the same as those applied in the Group's consolidated financial statements as at and for the year ended 31 December 2014.

2. Foreign currency translation

The Company publishes its Group financial statements in sterling. However, the majority of the Company's subsidiaries, joint ventures and associates report their revenue, costs, assets and liabilities in currencies other than sterling. The Company translates the revenue, costs, assets and liabilities of those subsidiaries, joint ventures and associates into sterling, and this translation of other currencies into sterling could materially affect the amount of these items in the Group's financial statements, even if their values have not changed in their original currencies. The following table sets out the sterling exchange rates of the other principal currencies of the Group.

Notes to the condensed consolidated financial statements

3. Operating segment information

Disclosure of segmental information is principally presented in respect of the Group's geographical segments.

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items principally comprise: interest-bearing loans, borrowings, cash and cash equivalents, net finance expense, taxation balances and corporate expenses.

Geographical segments

The hotel and property operations are managed on a worldwide basis and operate in seven principal geographical areas as follows:

· New York

· Regional US

· London

· Rest of Europe (including the Middle East)

· Singapore

· Rest of Asia

· Australasia

The segments reported reflect the operating segment information included in the internal reports that the Chief Operating Decision Maker ("CODM"), which is the Board, regularly reviews.

The reportable segments are aligned with the structure of the Group's internal organisation which is based according to geographical region. Discrete financial information is reported to and is reviewed by the CODM on a geographical basis. Operating segments have Chief Operating Officers ("COOs") or equivalent who are directly accountable for the functioning of their segments and who maintain regular contact with the Chief Executive Officer and Chairman of the CODM to discuss the operational and financial performance. The CODM makes decisions about allocation of resources to the regions managed by the COOs.

The results of CDL Hospitality Trusts ("CDLHT") have been incorporated within the existing geographical regions. In addition, CDLHT operations are reviewed separately by its board on a monthly basis.

Notes to the condensed consolidated financial statements

3. Operating segment information (continued)

1 Hotel fixed charges include depreciation, amortisation of lease premium prepayments, property rent, taxes and insurance, operating lease rentals and management fees.

2 EBITDA is earnings before interest, tax and, depreciation and amortisation.

3 Hotel revenue includes £183m (H1 2014: £181m) of room revenue from hotels that are both owned and managed by M&C.

Notes to the condensed consolidated financial statements

3. Operating segment information (continued)

Segmental assets and liabilities

Notes to the condensed consolidated financial statements

4. Income tax expense

The Group recorded a tax expense of £10m for the first half of 2015 (2014: £12m) excluding the tax relating to joint ventures and associates.

Income tax expense for the period is the expected income tax payable on the taxable income for the period, calculated at the estimated average underlying annual effective income tax rate applied to the pre-tax income for the period, and further adjusted to take into account the impact of over or under-provision adjustments for prior years.

5. Earnings per share

Earnings per share are calculated using the following information:

6. Dividends

Dividends paid to equity holders in the first half of 2015 totalled £37m (2014: £67m).

Subsequent to 30 June 2015, the Directors declared an interim ordinary dividend of 2.08p per share (2014: 2.08p) which has not been provided for.

Notes to the condensed consolidated financial statements

7. Significant related parties' transactions

Identity of related parties

Transactions between the Company and its subsidiaries have been eliminated on consolidation and are not disclosed in this note. Details of transactions between the Group and other related parties are disclosed below. All transactions with related parties were entered into in the normal course of business and at arm's length.

The Group has a related party relationship with its joint ventures, associates and with its Directors and executive officers.

Significant transactions with ultimate holding company and other related companies

The Group has a related party relationship with certain subsidiaries of Hong Leong Investment Holdings Pte. Ltd. ("Hong Leong"), which is the ultimate holding and controlling company of Millennium & Copthorne Hotels plc and holds 63% (31 December 2014: 61%) of the Company's shares via City Developments Limited ("CDL"), the intermediate holding company of the Group. During the half year ended 30 June 2015, the Group had the following significant transactions with those subsidiaries.

The Group deposited certain surplus cash with Hong Leong Finance Limited, a subsidiary of Hong Leong, on normal commercial terms. As at 30 June 2015, £5m (2014: £9m) of cash was deposited with Hong Leong Finance Limited.

Fees paid/payable by the Group to CDL and its other subsidiaries were £1m (2014: £1m) which included rentals paid for the Grand Shanghai restaurant and Kings Centre; property management fees for Tanglin Shopping Centre and Glyndebourne in Singapore; charges for car parking, leasing commission and professional services.

As at 30 June 2015, City e-Solutions Limited ("CES"), a fellow subsidiary of CDL held 1,152,031 (2014: 1,152,031) ordinary shares in M&C.

8. Risks and uncertainties

The interim management report has been prepared on the basis set out in Note 1. The risks and uncertainties facing the Group are consistent with those outlined in the Annual Report and Accounts for the year ended 31 December 2014.

9. Financial commitments, contingencies and subsequent events

Except as stated below, there have been no material changes to commitments, contingencies and subsequent events as disclosed in the annual report and accounts for the year ended 31 December 2014:

Capital commitments

Contracts placed for future capital expenditure not provided in the financial statements amount to £39m at 30 June 2015 (31 December 2014: £25m).

Subsequent events

There are no events subsequent to the balance sheet date which require adjustments to or disclosure within these consolidated financial statements.

MILLENNIUM & COPTHORNE HOTELS PLC

Responsibility statement of the Directors in respect of the interim management report

We confirm that to the best of our knowledge:

• the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU;

• the interim management report includes a fair review of the information required by:

(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.

By order of the board

Aloysius Lee

Chief Executive Officer

29 July 2015

Independent review report to Millennium & Copthorne Hotels plc

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2015 which comprises the condensed consolidated income statement, condensed consolidated statement of comprehensive income, condensed consolidated statement of financial position, condensed consolidated statement of changes in equity, condensed consolidated statement of cash flows and the related explanatory notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

The half-yearly financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly financial report in accordance with the DTR of the UK FCA.

As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the EU. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2015 is not prepared, in all material respects, in accordance with IAS 34 as adopted by the EU and the DTR of the UK FCA.

Steve Masters (Senior Statutory Auditor)

for and on behalf of KPMG LLP,

Chartered Accountants

15 Canada Square

London

E14 5GL

29 July 2015

APPENDIX 1: Key OPERATING STATISTICS

for the half year ended 30 June 2015