While hotels group Millennium & Copthorne traded well in the first half of the year, the signs of strain from the slowing global economy are beginning to show.
The figures reported by the group were clouded by several closure-affected hotels and one-off events, including the benefit of a £17.4m property sale last year and a £9.1m gain on a Chinese apartment sale this year - that disposal was included in Millennium's own measure of underlying operating profits, which rose from £63.9m to £81.2m. Excluding the sale proceeds, underlying operating profit was still 13 per cent ahead, driven by a 4.2 per cent increase in like-for-like revenue per available room (RevPAR).
The group's development activity has also been going well, with impressive results from the refurbishment of its hotel in Seoul, and the sale of the vast majority of its Singapore apartments prior to the property market softening there.
However, the rub is that all kinds of markets are softening. In the first 24 days of July, group RevPAR fell 4.2 per cent. Singapore, an important region for the group and a former hot spot, registered a 1.1 per cent decline. Meanwhile, figures from New York, down 9 per cent, and London, down 12.5 per cent, were really ugly. The Olympics was partly to blame for the London fall.
Broker Panmure Gordon forecasts full-year EPS of 32.9p (37.3p in 2011).
| Millennium & Copthorne (MLC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 486p | MARKET VALUE: | £1.6bn | |
| TOUCH: | 485-487p | 12-MONTH HIGH: | 525p | LOW: 367p |
| DIVIDEND YIELD: | 2.6%* | PE RATIO: | 10 | |
| NET ASSET VALUE: | 654p | NET DEBT: | 1% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 370 | 80.3 | 19.8 | 2.08 |
| 2012 | 374 | 79.0 | 18.3 | 2.08 |
| % change | +1 | -2 | -8 | - |
Ex-div: 8 Aug Payment: 5 Oct *Excludes 4p special dividend | ||||
