Millennium & Copthorne first half pre-tax profits down 14.9%

Millennium & Copthorne has blamed the strengthening pound and higher costs for a fall in revenue and profit in the first half of 2014.

Pre-tax profit for the six months to 30 June 2014 fell 14.9% to £58.4m (2013: £68.6m), while revenue was down 0.4% to £380.6m from £382.2m for the same period last year.

Revenue per available room (revpar) was down 2.4% at £65.7m from £67.3m, which the company blamed on the impact of foreign currency and challenging Asian markets.

Commenting on the figures, chairman Kwek Leng Beng said it was too early to predict results for the full year.

"But the group is cautiously optimistic that with appropriate actions performance will meet management expectations," he added.

"Management is adopting a more cautious outlook and increasing its attention to cost control in uncertain markets."

The hotel group completed two acquisitions during the first half of 2014, including the Wyndham Grand London Chelsea Harbour in London for £65m and the Novotel New York Times Square for $273.6m (£161m), which completed on 25 March and 12 June respectively.

The company also reported that it has invested £106m on its hotel refurbishment programme, which began in 2010, and expects to spend a further £33m this year on revamps that have already commenced or been approved. Another £22m is expected to be spent on refurbishments in future years.

Additional projects totalling £214m are under consideration, including one at Millennium Hotel London Knightsbridge.

Millennium and Copthorne Hotels reports profit drop due to "strong pound" >>