Millennium & Copthorne halves dividend after hotel revenues dive
Thursday 19 February 2009
The troubles facing the international hotelier Millennium & Copthorne Hotels (M&C) were laid bare yesterday when it revealed dreadful revenues in the US and Asia this year, tumbling profits and a halving of its full-year dividend.
The hotelier said it had also put a freeze on recruitment and virtually halted all new capital expenditure.
Kwek Leng Beng, the chairman of the hotelier, said: “The group is anticipating that the next few quarters will present challenging trading conditions.”
M&C said that group revenues per available room (revpar), a critical indicator of performance in the industry, tumbled by 21.2 per cent in the first five weeks of 2009. In the US, revpar at its New York hotels plummeted by 41 per cent and by 23 per cent at regional US hotels. Revpar at M&C’s Asian hotels fell by 20 per cent, but those in London fared better by being down by only 4 per cent.
The results from M&C come hard on the heels of Tuesday’s statement from InterContinental Hotels, the world’s largest hotelier, which warned of a continuing marked slowdown during its fourth quarter, particularly in New York and China.
The awful numbers and a surprise halving of M&C dividend spooked investors, who sent its shares down by 38p, or 17 per cent, to 190p. M&C cut the final dividend to 4.17p a share, taking its full-year dividend down by half to 6.25p compared with 12.5p in 2008.
Mark Reed, an analyst at Teathers, said: “Current trading is dire and while not too much weight should be given to just five weeks trading, the economic backdrop suggests things will not improve. We have previously estimated that without cost cuts Ebitda [underlying earnings] would be eliminated with a 20 per cent sales fall.” He said the slashing of the dividend was a “surprise”, given that Teathers had expected it to be held flat.
For the year to 31 December, M&C’s revpar increased to 7.6 per cent. Group revenues rose by 5 per cent to £702.9m, but actually fell by 1.2 per cent in constant currency terms. Its pre-tax profits slumped by 34.5 per cent to £102.8m.
Despite the turbulent economic conditions, M&C grew revenues in 2008 at its London hotels by 2 per cent to £93.8m and their annual revpar rose by 4 per cent to £85.5m. But regional UK revpar fell by 6.2 per cent, driven by a 4.5 per cent fall in occupancy rates.
Mr Beng said: “In this current uncertain climate, it is difficult to predict with accuracy how long these [global] conditions will continue to exist and when a correction and improvement in market sentiment can be expected.”
Britain First criticised for using actress's memory to draw attention to their 'hate-filled home page'
- 1 This 'woman calls police to order pizza' story isn't going where you're expecting
- 2 Axe wielding man shot dead after attacking four New York policemen on busy street
- 3 Watch what happened when food critics were unknowingly served McDonald's
- 4 Jimmy Carr's Oscar Pistorius joke goes a bit too far at the Q Awards
- 5 Ottawa shootings: Bruce MacKinnon's cartoon is the perfect tribute to soldier Nathan Cirillo
Renee Zellweger on plastic surgery rumours: 'I'm living a more fulfilling life and I'm thrilled that perhaps it shows'
FCKH8: YouTube reinstates provocative anti-sexism video showing young girls swearing
Axe wielding man shot dead after attacking four New York policemen on busy street
This 'woman calls police to order pizza' story isn't going where you're expecting
Jimmy Carr's Oscar Pistorius joke goes a bit too far at the Q Awards
Of course, teenage girls need role models – but not like beauty vlogger Zoella
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Support for EU membership 'at highest level since 1991' with most Brits wanting to stay 'in'
Thousands with degenerative conditions classified as 'fit to work in future' – despite no possibility of improvement
Residents should throw a street party and mix with immigrant neighbours, councils told
Attacks on 'Ukip Calypso' show how skewed people’s priorities are
iJobs Money & Business
£60000 per annum: Ashdown Group: Compensation and Benefits Manager - Compensat...
£30000 - £35000 Per Annum plus excellent benefits: Clearwater People Solutions...
£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...
£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...