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Millennium & Copthorne Hotels PLC

Millennium & Copthorne Hotels PLC Refurbishment impacts on trading results

Millennium & Copthorne Hotels PLC (LON:MLC), today announced first quarter results to 31 March 2019.

Highlights for 1st quarter 2019:

 

Q1

2019

Reported Currency

Constant Currency

Q1

2018

Change

 

Q1

2018

Change

RevPAR

£70.01

£68.48

£1.53

2.2%

£70.65

£(0.64)

(0.9)%

Revenue – total

£215m

£217m

£(2)m

(0.9)%

£224m

£(9)m

(4.0)%

Revenue – hotel

£187m

£187m

£193m

£(6)m

(3.1)%

Profit before tax

£11m

£26m

£(15)m

(57.7)%

£26m

£(15)m

(57.7)%

* Like-for-like comparisons exclude the impact of acquisitions, closures and refurbishments; and they are stated in constant currency terms.

· Group RevPAR in constant currency for Q1 2019 decreased by 0.9% to £70.01 (Q1 2018: £70.65). Like-for-like* Group RevPAR decreased by 0.8%. Like-for-like* comparison excludes the Mayfair hotel and Millennium New Plymouth New Zealand.

· Operating performance was negatively impacted by refurbishment affecting major hotels in two of the Group’s key gateway cities – London and Singapore. The Mayfair London property was partially closed in November 2017 and then fully closed in July 2018. The Orchard Hotel in Singapore has been under phased refurbishment since middle 2017.

· Total revenue in constant currency decreased by £9m, driven mainly by the impact of hotel refurbishment and lower contributions from the REIT hotels and property income.

· Pre-tax profit in constant currency for Q1 2019 decreased by £15m to £11m (Q1 2018: £26m). Profit was impacted by the Mayfair property refurbishment and lower contributions from Asian hotels, principally due to the Orchard Hotel Singapore refurbishment. In addition, REIT profit contributions were down by £3m and net finance cost was higher by £5m. In Q1 last year, CDL Hospitality Trusts recognised £3m profit from divestment of its two Australian properties.

· Management is in the final stage of discussions with Hilton regarding the Group’s operation of the newly renamed Millennium Times Square New York, formerly known as the Millennium Broadway New York Times Square, as an affiliate of Hilton, with access to its reservation channels and loyalty programme.

· For the first 21 days of April 2019, like-for-like* Group RevPAR increased by 2.2%.

Mr Kwek Leng Beng, Millennium & Copthorne Hotels Chairman, commented:

“Despite the uncertainties and challenges in the global economy, we remain focused on making the best use of our hospitality assets. The Group is prioritising the refurbishment of our key gateway city properties to reposition our hotels, whilst seeking to minimise the short-term negative impact on our trading results. Operationally, we must successfully manage the refurbishment process and re-focus our sales efforts so as to improve yields. To that end, the affiliation agreement with Hilton for the Millennium Times Square New York will allow us to continue to manage one of our most significant hotels and help us to turn around the performance of the hotel more quickly.”