Ever since a takeover bid from its largest shareholder, City Developments, fell through, management at Millennium & Copthorne Hotels (MLC) has been under pressure to improve the performance of the hotel group. As such, the full-year dividend has been cut so that money can be directed towards maintenance and improvement work to keep the business "relevant and competitive”.
Outside the failed deal, it hasn’t been an easy time to run a hotel group. Brexit-fuelled uncertainty and higher labour costs have weighed on growth in the UK, while some US sites also continue to underperform. In Asia, excess capacity in Singapore has discouraged increases in room prices. Overall, group hotel revenue improved 3.2 per cent at constant currency to £27m, thanks mainly to new sites in New York and Auckland, while revenue per available room was also up 3.2 per cent to £82.78.
Following the failed takeover bid, analysts at Stifel still expect pre-tax profits of £185m in the year to December 2018, giving EPS of 39.8p.
| MILLENNIUM & COPTHORNE (MLC) | ||||
| ORD PRICE: | 539p | MARKET VALUE: | £1.75bn | |
| TOUCH: | 538-540p | 12-MONTH HIGH: | 630p | LOW: 412p |
| DIVIDEND YIELD: | 1.2% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 824p | NET DEBT: | 20% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2013 | 1.06 | 295 | 69.4 | 13.60 |
| 2014 | 0.83 | 188 | 34.0 | 13.60 |
| 2015 | 0.85 | 109 | 19.9 | 6.42 |
| 2016 | 0.93 | 108 | 24.0 | 7.74 |
| 2017 | 1.01 | 147 | 38.1 | 6.50 |
| % change | +9 | +36 | +59 | -16 |
| Ex-div: | 15 Mar | |||
| Payment: | 11 May |
