Millennium & Copthorne profit hit by external factors

Pre-tax profit declined to £11m from £80m in the fourth quarter of 2014, although revenue nudged up 1.3% to £232m. Revenue per available room (RevPAR), which is a key performance gauge for the hotels industry, was down 3.7% to £73.64.

M&C attributed the fourth quarter RevPAR drop to the performance of its Asian hotels, where RevPAR fell 9% across Singapore and Rest of Asia combined.

London and New York also saw RevPAR declines in 2015, mainly due to the impact of refurbishments at Millennium Bailey's Hotel London and ONE UN New York.

For the full year, pre-tax profit slid 42% to £109m on revenue of £847m, up 2.5% from 2014. Revenue per available room was 0.6% higher at £71.98.

Chairman Kwek Leng Beng said: “In 2015, global hospitality markets were impacted by falling commodity prices, mounting concern with regard to terrorism, health advisory travel alerts and uncertainty regarding growth of the Chinese market. These external factors, which negatively affected the year's performance, are expected to continue in the current year.”

Beng said that while the short-term trading outlook is uncertain, Millennium has a long-term perspective.

“Management considers that asset ownership is key to creating long-term value in a changing hospitality industry landscape. The group will therefore continue to focus on its strategy of ownership and management of hospitality real estate assets. In 2016, management will work on optimising returns on the group's assets by undertaking refurbishment projects, whilst remaining vigilant with regard to controlling costs."

The company recommended a final dividend of 4.34p, giving a total dividend for the year of 6.42p a share, down from the previous year’s 13.59p.