The Directors of Millennium & Copthorne Hotels New Zealand Limited ("MCK")
announced an unaudited profit after tax and non-controlling interests of
$19.63 million for the six month period ended 30 June 2012 (2011: $4.27
million). Profit before income tax and non-controlling interests was $25.67
million (2011: $7.90 million).
The increase in half-year profit is primarily due to profit improvements from
the group''s majority-owned land development business CDL Investments New
Zealand Limited and its investment in China through First Sponsor Capital
Limited. Both business units have been able to recognise profits from sales
made in 2011 and 2012.
Group revenue and other income for the period under review increased from
$54.02 million in 2011 to $57.53 million. Gross profit for the period also
increased from $25.48 million in 2011 to $28.70 million.
As at 30 June 2012, shareholders'' funds excluding non-controlling interests
totaled $427.74 million (2011: $402.90 million) with total assets at $675.29
million (2011: $645.62 million). Net asset backing (excluding
non-controlling interests) per share as at 30 June 2012 now stands at 122.5
cents per share (2011: 115.4 cps).
Canterbury Earthquake Update:
With the demolition and termination of the lease at Copthorne Hotel
Christchurch City (Durham Street), the Group has two remaining properties in
the Christchurch Central Business District.
--Reservations at Millennium Hotel Christchurch will not be accepted until
January 2014 at the earliest. Works to repair this leased hotel have now
commenced and are estimated to take up to two years to complete. The group
has renewed its insurance cover for this property.
--Reservations at Copthorne Hotel Christchurch Central will not be taken
until further notice. A final engineering recommendation on repair or
demolition is yet to be received. The Group is the owner of this hotel and
the land on which it is situated.
Copthorne Hotel Commodore, Christchurch Airport, a franchised property,
continues to trade well during the period under review.
This period has seen settlements reached with the Group''s insurers in respect
of the business interruption insurance claims for Copthorne Hotel
Christchurch City and Copthorne Hotel Christchurch Central. While the
details of these settlements are confidential to the parties, the Group is
pleased with the overall outcome.
New Zealand Hotel Operations:
Total revenue for the New Zealand hotel operations (16 owned or leased and
operated hotels excluding 9 franchised properties) for the period under
review was $38.43 million (2011: $42.27 million). Occupancy for those owned
/ leased hotels for the period was 63.3% (2011: 64.5%) across the Group
allowing for the closure of the three Christchurch CBD hotels.
Due to the ongoing effects of the Canterbury Earthquakes and the general
global decline in outbound tourism from traditionally strong markets such as
Europe and North America, visitor numbers to New Zealand remain flat and
tourism growth also remains sluggish. Visitor numbers from Australia have
also declined although this has been offset in part by increases from China,
India and other South / South-East Asian markets.
Refurbishment of the Kingsgate Hotel Rotorua has been completed involving
work to the roof and external cladding of the hotel as well as some public
areas. Work is scheduled to commence on a refurbishment of the Kingsgate
Hotel Palmerston North in the second half of this year.
Kingsgate Hotel Parnell will leave the Group on 31 July 2012 on expiry of the
CDL Investments New Zealand Limited (''CDLI''):
CDLI announced an unaudited operating profit after tax for the six months
ended 30 June 2012 of $3.83 million, an increase of 217% over 2011. Increased
sales from Hamilton and Rolleston (Canterbury) in particular contributed to
the improved result and CDLI also saw increased sales in Auckland and
Havelock North. CDLI is confident that it can better its 2011 results in
Offshore investments - Australia and China:
In China, First Sponsor Capital Limited ("FSCL") (a 34.21% associate company)
reported a profit of US$28.17 million for the period to 30 June 2012 (2011:
US$0.76 million). The Group''s share of this profit reflected in the results
is $11.88 million (2011: $0.29 million). This is mainly due to the
development profit recognition from the residential component of Chengdu
MCHNZ''s decision to invest in China was undertaken after careful deliberation
of the risks and rewards in taking part in the growing economy of China. The
results from FSCL show that MCHNZ''s diversification strategy into China is
Preliminary construction work has commenced at FSCL''s new mixed development
in Chengdu (Millennium Waterfront Project). The mixed development comprises
residential apartments, office and commercial units as well as a hotel. It is
anticipated that phase one of the residential development will be launched
for sale in 4Q2012.
In Australia, occupancy at the Zenith Residences remains steady at 98%. The
units owned by the Group continue to be leased out on short-term leases.
While the New Zealand Hotel Operations remain flat due to fewer international
visitors, the Group''s other business units are reporting increased
profitability due to better sales. At the hotel level, cost control
continues to be sound. These improvements will be reflected in the year-end
results. Overall, the Board expects the 2012 results to be better than 2011.
Wong Hong Ren
2 August 2012
End CA:00225607 For:MCK Type:ADDRESS Time:2012-08-02 17:00:30