Hotels group Millennium & Copthorne smashed expectations with profits and revenue reaching record levels in 2011, prompting the firm to raise its full-year dividend by almost two-thirds.
Pre-tax profits jumped 50.3% in the 12 months ended December 31st from £128.6m to £193.3m, well ahead of the consensus forecasts of £159.6m. Panmure Gordon was expecting a figure closer to £144.5m.
Profits were helped by the sale and lease-back of Studio M to CDL Hospitality Trusts REIT which resulted in a gain of £17.4m.
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Meanwhile, revenue per available room - or RevPAR, one of the key metrics in the hotels business - increased by 6.1% to £64.81 compared with 4.3% growth expected by Credit Suisse. Like-for-like group RevPAR rose by 5.5%, with London RevPAR increasing 8.8% and 6.1% growth being seen in both Singapore and New York.
"As in past years, our hotel operating strategy concentrated on maximising revenues from each hotel by achieving an optimal balance between occupancy and room rate, whilst maintaining strict control of cost," said Chairman Kwek Leng Beng.
Total revenue rose by 10.3% from £743.7m to £820.5m, well ahead of consensus estimates of £794.5m.
The board is recommending a dividend of 14.42p per share, made up of a final dividend of 10.42p per share plus a special dividend of 4p per share. The total dividend per share, which includes the 2.08p interim dividend, stands at 16.5p, up some 65% increase over last year's 10p payout.
"The economic outlook continues to be uncertain. However the global distribution of our business and the strength of our management provide a stable base from which we can respond quickly to economic conditions. We are focused on increasing sales whilst maintaining strict control of costs. We expect the Group's debt level to increase over time as we continue to invest in our properties and take advantage of other opportunities as they arise," Leng Beng said.
Shares were 1.43% higher at 495p in early trading on Wednesday.
BC
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