Millennium & Copthorne Hotels PLC A challenging year which is reflected in the results

Millennium & Copthorne Hotels PLC (LON:MLC), today announced preliminary results for the full year and forth quarter results to 31 Decmber 2018.

Highlights for the full year 2018:

Highlights for the 4^th quarter 2018:

*  Like-for-like comparisons exclude the impact of acquisitions, closures and refurbishments; and they are stated in constant currency terms.

· In constant currency, Group RevPAR for 2018 increased by 0.7% to £81.57 (2017: £80.97). In reported currency, it decreased by 1.5% reflecting a stronger pound sterling against the Group’s main trading currencies.

· Like-for-like* Group RevPAR for 2018 increased by 2.4%. Like-for-like comparison excludes the Mayfair hotel which was impacted by its closure in July 2018, the Millennium New Plymouth New Zealand which was acquired in February 2018, and M Social Auckland which was re-opened in October 2017.

· In constant currency, hotel revenue for 2018 increased slightly by 0.6%. Reported hotel revenue was down by £13m or 1.5%, reflecting the stronger pound.

· In constant currency, total revenue for the year increased by £10m or 1.0%. Reported total revenue for 2018 fell by £11m or 1.1% to £997m (2017: £1,008m).

· Pre-tax profit for 2018 decreased by £41m to £106m (2017: £147m) and included net valuation and impairment charges of £36m (2017: £29m); and higher operating costs. After removing the effects of impairment losses and net revaluation gains, the Group’s reported profit before tax was £142m (2017: £176m). In 2017, the Group recognised £12m credit from the reversal of an earlier shareholder’s loan impairment.

· During 2018, the closure of the Mayfair hotel resulted in the reduction of the Group’s revenue and operating profit of £20m and £12m respectively.

· In Q4 2018, Group RevPAR grew by 3.9% in constant currency. Like-for-like* Group RevPAR increased by 5.0%.

· For the first 28 days of January 2019, Group RevPAR in constant currency was up by 1.2%.

· The Board recommends a final ordinary dividend of 2.15p per share (2017: 4.42p per share), giving a total ordinary dividend for the year of 4.23p per share (2017: 6.50p per share).

Mr Kwek Leng Beng, Millennium & Copthor Chairman commented:

“The hospitality industry faced a range of geo-political and global economic headwinds in 2018, many of which look set to continue in the current year, including US/China trade relations, Brexit and increasing minimum wage levels in many jurisdictions.

The Board’s priority is to evaluate and develop new and innovative strategic plans to meet the challenges facing our fast-changing operating environment. The shortage of talent-from rank and file to senior management-is intensifying with many new hotels being built around the world, not to mention the growth of Airbnb and serviced apartments. Any hospitality business that wants to progress will need to evolve and embrace these changes to stay relevant and profitable in the immediate and medium term. Restoring profitability in our New York hotels also remains at the top of the Board’s objectives.

Meanwhile, we continue to invest in and reposition our hotels. We look forward to our Mayfair hotel being rebranded and opened as The Biltmore, Mayfair in the second quarter of this year. This is the first opening under Hilton’s new LXR Hotels & Resorts collection in Europe. This also will mark the Group’s debut in the London five-star deluxe market and it is our aim to fast track our lost earnings growth at this hotel after it re-opens.

2019 will be another challenging year for the Group, with significant capital projects underway and several large hotels earmarked for major renovations. These investments will be carefully managed and phased to deliver the right returns to shareholders and underline the Group’s intention to maintain strict control of costs throughout the business.”