Millennium & Copthorne posts 'disappointing' first half

Millennium & Copthorne Hotels posted its half-year report for the six months to 30 June on Wednesday, with Group revenue per available room (RevPAR) in constant currency falling by 4.2% to £67.91, compared to £70.88 in the same period last year.

The FTSE 250 firm put the drop down to decreases in both occupancy and average room rate of 1.4% and 2.2% respectively.

Total revenue for the first six months grew by 3.5% to £418m, in part reflecting higher land sales, the company’s board said, with hotel revenue declining by 1.4% to £360m in the same period.

In constant currency, hotel revenue declined by 4.3% during the half, which was put down to deterioration of trading in Millennium & Copthorne’s “key gateway cities” of New York, London and Singapore.

Hotel operating profit fell by 21.7% to £47m, from £60m last year.

The company’s board declared an interim dividend of 2.08p per share, but warned that the final dividend for the year remained under review.

“We are disappointed by our hotel operating performance during the first half of 2016, particularly in New York and Singapore, which remain areas of focus for the group,” said Millennium & Copthorne chairman Kwek Leng Beng.

“The UK referendum vote to leave the European Union, together with recent terrorist activity, has further intensified uncertainty over the direction of the global economy.”

Leng Beng said the group has a history of successfully navigating difficult economic environments given its broad geographic exposure and strong balance sheet.

“Against a backdrop of economic uncertainty, we are adopting a prudent strategy to protect the group's strong financial position, including a review of capital expenditure, whilst taking appropriate steps to strengthen areas of operating weakness.”