Millennium & Copthorne Hotels saw first quarter pre-tax profit fall 34.7 per cent on the previous year as the company closed accommodation for refurbishments.
Pre-tax profit for the first three months of the year dropped to £16.9m from the prior year's £25.9m, reflecting a 3.6% decline in revenue to £169m and the cost of renovations.
During the period, the company removed more than 100,000 room nights to make improvements to its hotels. The Grand Hyatt Taipei in Taiwan closed 461 of its rooms and the Millennium Minneapolis in the US was shut completely for the quarter.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The group said harsh weather conditions also deterred travellers in Europe and the US while a slowing economy put a strain on travel budgets.
Revenue per available room (RevPAR) was up 1.6% and the average room rate rose by 1.7% while occupancy fell slightly by 0.1 percentage point.
Net cash increased from £52.2m at the end of December to £56.5m and the end of March.
"Although Group RevPAR increased by 1.6% over the three months ended March 31st 2013, revenue declined due to a number of factors, which are unlikely to abate in the foreseeable future," Chairman Kwek Leng Beng said.
"Asia, which accounted for over 40% of group revenues last year and has led our revenue and profit growth in recent years, is facing a number of political, economic and other challenges that are likely to impact performance.
"Europe also continues to face challenges as a result of austerity programmes and the ongoing fallout from the financial crisis."
However, he said the company's strong financial position will provide a safeguard against economic headwinds and allow for flexibility to act on acquisitions and investments.
Shares dropped 3.24% to 537p at 08:56 Thursday.
RD
-
UK food price inflation rate ‘lowest level in two years’, British Retail Consortium findsNews Food price inflation is at its slowest rate since March 2022, according to the BRC. It also found non-food products have gone into deflation.
-
Top-quality, rapidly growing European stocks are selling at enticing valuationsTimothy Lewis, portfolio manager at JPMorgan European Growth & Income tells us where he’d put his money
