A renaissance could well be under way at Millennium & Copthorne Hotels (MLC) after the international hotelier reversed a downward trend in half-year earnings. Pre-tax profits fell 14 per cent in the first six months of 2014, but have since bounced back thanks to strong performances in Australasia, the US, Europe and the Middle East.
Underlying revenue per available room rose 4 per cent, but operating profit fell marginally to £64m due to spiralling costs. The US was the standout performer in room revenue terms thanks to the Novotel New York Times Square hotel and regional growth in cities such as Chicago. Australasia was the fastest growing region thanks in part to increased visitor numbers to New Zealand from China. London let the side down, with room revenues dipping 4.2 per cent - a figure exacerbated by the refurbishment ongoing at the city's Millennium Bailey's Hotel.
Investors may have let out a sigh of relief as Singapore showed signs of stability in occupancy rates. But room revenues continue to be affected by the strong Singaporean dollar, which has discouraged tourists, and the group's 2014 sale of three remaining units in its Glyndebourne development also made last year's figures hard to beat.
Prior to these results, analysts at Natixis expected pre-tax profits of £219m this year (2014: £188m), giving EPS of 40.4p.
| MILLENNIUM & COPTHORNE HOTELS (MLC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 556p | MARKET VALUE: | £1.8bn | |
| TOUCH: | 556.5-557p | 12-MONTH HIGH: | 614p | LOW: 531p |
| DIVIDEND YIELD: | 2.4% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 680p | NET DEBT: | 20% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 380 | 58 | 9.4 | 2.08 |
| 2015 | 404 | 62 | 11.2 | 2.08 |
| % change | +6 | +5 | +19 | - |
Ex-div: 13 Aug Payment: 2 Oct | ||||
