Millennium & Copthorne reveals 42% profits drop
Millennium & Copthorne Hotels has warned of a raft of challenges to the global hotel market, including terrorism, health alerts and a fall in commodity prices, as it unveiled a 42% drop in profits in 2015.
Total revenue at the group, which has more than 20 hotels in the UK, and operates globally in countries including America, France, Italy, across Asia, and the Middle East, stood at £847m for the full year to 31 December 2015, up 2.5%.
Pre-tax profit was down 42% to £109m, and revpar was broadly flat at £71.98 (up 0.6% on the year before).
The company attributed the drop in profit to a net charge of £43m. The net charge includes £76m of impairment losses relating primarily to four of the group's properties located in New York, the rest of Europe and the rest of Asia; offset by net revaluation gains of £33m on its investment properties.
Excluding the revaluation gains and impairment losses, pre-tax profit fell 5.6% to £152m.
Commenting on the results, 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.
"Although the short-term trading outlook is uncertain, the group 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."
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