Millennium & Copthorne cuts dividend to invest

Millennium & Copthorne has cut its dividend to preserve cash for investment after a year in which the hotel group struggled to adjust to travellers booking online and rising costs.

The international hotel company cut its final dividend to 4.442p a share from 5.66p a year earlier to maintain and improve hotels. The reduction caused the annual payout to fall to 6.50p from 7.74p.

Revenue for the year to 31 December rose 8.9% to £1.01bn, helped by currency gains and two new hotels, but the underlying trend was flat. Revenue fell in the final quarter of the year. Annual pre-tax profit rose 36% to £147m, yet the company was cognisant of its disappointing revenue trends.

Kwek Leng Beng, Millennium & Copthorne’s chairman, said: “Performance was impacted by industry-wide factors, including political instability in Korea, the unabated growth in popularity amongst customers of online travel agents and alternative lodging options, and rising costs.

"The group expects to make significant capital investment for a needed transformation to the repositioning of our hotels so as to keep pace with guest expectations. Increased expenditure on both maintenance and product improvement will therefore be necessary for the group to stay relevant and competitive.”

He said costs were rising strongly in London, where Brexit is pushing up wages already boosted by the introduction of the government’s national living wage. London’s hospitality industry relies heavily on workers from the EU and companies have warned that labour shortages could push up wages.