City Lodge Hotels total dividend up 31% to 351c

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Commenting on the group’s development pipeline‚ Chief Executive‚ Clifford Ross‚ said progress was being made in Kenya‚ Ghana and South Africa‚ with expansion investigations also continuing in the rest of East Africa and in several SADC countries. Commenting on the group’s development pipeline‚ Chief Executive‚ Clifford Ross‚ said progress was being made in Kenya‚ Ghana and South Africa‚ with expansion investigations also continuing in the rest of East Africa and in several SADC countries.

City Lodge Hotels Limited (CLH) has increased average occupancies by three percentage points to 62% in the 12 months to June 30‚ 2013‚ underpinning a revenue increase of 11% to R975.9 million and a 32% rise in normalised headline earnings to R252.2 million.

City Lodge has “refreshed” its branding to better differentiate its four brands and reflect its ongoing enhancements and modernisation initiatives.

Although operating costs‚ excluding depreciation‚ rose by 11.7%‚ the rise in operating costs per room sold was limited to 5.8%‚ illustrating the effectiveness of the group’s on-going cost controls and energy efficiency programmes and initiatives.

Normalised diluted headline earnings per share rose by 31% to 578.3 cents and a final dividend of 175 cents was declared‚ taking the total dividend to 351 cents‚ an increase of 31% on the previous year.

Cash generated by operations was 20% higher than in the 2012 financial year and return on equity was 26% compared to 22% in the prior year.

While the Courtyard Joint venture returned to profitability‚ showing a profit of R2.4 million compared to a loss of R125‚000 in the prior year‚ the Kenyan Joint Venture made a solid first time contribution to the group with an equity accounted after tax profit of R13.6 million.

An operational highlight during the period was the opening of the 104-room Town Lodge Gaborone in mid-May‚ which‚ together with the Kenyan acquisition‚ increased the group’s overall room numbers to 6‚755 from 6‚440 in South Africa‚ Kenya and Botswana.

With effect from August‚ the group has “refreshed” brands and logos across its Courtyard‚ City Lodge‚ Town Lodge and Road Lodge brands. This exercise has begun with stationery‚ advertising and marketing material and will be extended over the next few months to signage at all of the group’s hotels.

Commenting on the group’s development pipeline‚ Chief Executive‚ Clifford Ross‚ said progress was being made in Kenya‚ Ghana and South Africa‚ with expansion investigations also continuing in the rest of East Africa and in several SADC countries.

“We have entered into non-binding memorandums of understanding in respect of development opportunities in both Kenya and Ghana with ongoing negotiations to finalise agreements in both countries‚” he said.

“In South Africa‚ the acquisition of a site for a 90-room Road Lodge in Pietermaritzburg is expected to be completed in the final quarter of 2013 with construction anticipated to start shortly thereafter.

Lease and development agreements are currently being finalised for a 150-room City Lodge at Waterfall City near Midrand, it is expected that construction will begin in the fourth quarter of 2013 and that the hotel will be opened in the fourth quarter of 2014.”

Looking ahead to the 2014 financial year‚ Ross said that the upward trend in occupancies has continued into the first six weeks of the year and the group is well placed to benefit from any increased level of economic activity.


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