M & C has reported increased revenue per available room (RevPAR), firm control of costs, and strengthened financial position for 2012. Revenue and headline pre-tax profit increased on a like-for-like, constant currency basis, and hotels achieved good operating profit margins.
Highlights for the full year 2012
• RevPAR up 3.9% primarily because of higher average room rate – good performance in London, Singapore, Rest of Asia
• Revenue up 1.1% on a like-for-like, constant currency basis at £762.0m (2011: £753.8m).
• Like-for-like headline operating profit in constant currency terms increased by 6.6% to £158.9m (2011: £149.0m). Reported headline operating profit down 14.7% to £163.3m (2011: £191.4m).
• Asset management programme expanded from four projects (ONE UN, Grand Hyatt Taipei, London Millennium Mayfair and Millennium Seoul Hilton) to include further refurbishment at Orchard Singapore, Millennium Minneapolis, further upgrades at ONE UN and Millennium Seoul Hilton and other upgrades across the portfolio. Major works undertaken successfully at Millennium Seoul Hilton, ONE UN and Orchard Singapore. Projects commenced at Grand Hyatt Taipei and Millennium Minneapolis. Capital spending on the asset management programme is estimated at £240m.
• Strong cash flow from operating activities enabled M & C to turn cash-positive in 2012, ending the year with zero gearing.
• Final dividend of 11.51p, giving a total for the year of 13.59p (2011: 12.5p plus a special dividend of 4.0p) per share.
Highlights for the fourth quarter 2012
• Group RevPAR grew by 0.9%. Steady trading in all regions
• Like-for-like revenue in constant currency terms decreased by 2.1% to £201.3m (2011: £205.6m). Reported revenue down 2.2% to £203.2m (2011: £207.8m).
• Like-for-like headline operating profit in constant currency terms decreased by 18.6% to £39.9m (2011: £49.0m). Reported headline operating profit down 16.8% to £41.7m (2011: £50.1m).
• Profit before tax up 24.0%, as a result of £10.5m gain arising from insurance settlement for Christchurch earthquake.
Mr Kwek Leng Beng, Chairman commented
“The Group overcame more challenging conditions in some markets during the second half of 2012 to deliver an overall increase in like-for-like revenues and profits for the year. This illustrates the earnings benefit of a balanced portfolio of assets in good locations, as well as our ability to respond effectively to changes in the economic climate, whilst continuing to control costs, invest in our assets and improve our attractiveness to customers.
“During the current year we will deploy our strong balance sheet to invest in our existing asset portfolio, thereby supporting the core earnings engine of the Group. We continue to monitor acquisition opportunities, although prices continue to remain unjustifiably high.”