Millennium & Copthorne profit up 12.5% in H1

Millennium & Copthorne posted a 12.5% rise in first-half pre-tax profit on Friday thanks in part to solid demand for London hotels as the weaker pound attracted more tourists.

Pre-tax profit increased to £63m from £56m in the same period a year ago, as revenue per available room pushed up to £78.69 from £67.91. Meanwhile, total revenue came in at £485m from £418m in 2016.

RevPAR in London was up 10.7% in the first half, driven by higher tourist numbers as a result of the weaker pound. However, RevPAR in Singapore was down 1.1%, with a 4.1% points increase in occupancy more than offset by a 5.8% fall in average room rate.

RevPAR in New York by 10.0% during the period, mainly reflecting the increased contribution from ONE UN New York whose East Tower was closed for refurbishment during the same period last year. Excluding this property, RevPAR for New York increased by 1%. Despite higher revenue, M&C said the New York region was still loss-making for the period due to high operating costs, in particular payroll costs and travel agent commissions.

Chairman Kwek Leng Beng said: “Group results improved in the first half of 2017 on both a reported and constant currency basis, by 12.5% and 1.6% respectively. However, there is continuing pressure on the profitability of our hotel operations, particularly in North Asia and New York.

“The decline in Singapore RevPAR appears to be shallowing out. However RevPAR from Rest of Asia was down more sharply, in part as a result of geopolitical tensions impacting visitor arrivals in our hotels in Taipei and Seoul, especially from China.”

At 0812 BST, the shares were down 0.8% to 449.70p.