Hotels group Millennium & Copthorne today said its recovery was “firmly on track” after turning half-year losses into profits of £20.6m.
The Surrey-based group, which suffered a sharp fall in profitability last year after Sars and the Iraq war hit the travel industry, said it was well positioned to make further good progress in the rest of its financial year.
It hailed the continued recovery of hotels in London, New York and Asia, although the move into the black was widely expected due to last year’s weak comparatives.
M&C also announced that joint interim chief executive Tony Potter would become permanent chief executive by the end of the year.
Chairman Kwek Leng Beng said: “Our recovery is firmly on track. The improving trend that we saw in the second half of 2003 and in the first quarter has continued.”
The group operates 89 four-star and five-star hotels in 16 countries.
It has 2,200 employees in the UK and 12,300 staff worldwide.
It has been working to reverse the performance by its hotels by tightening costs, introducing new marketing initiatives and strengthening its management teams.
M&C moved into the black during the six months to 30 June after posting pre-tax losses of £6.3m in the same period last year.
Turnover increased by 8% to £262.7m.
This included particularly encouraging performances from the key markets of New York, London and Asia.
Occupancy rates improved at Millennium’s five London hotels, with the Copthorne Tara Hotel in Kensington particularly strong.
The rest of the UK also performed well, with strong demand at its two Gatwick hotels reflecting the increase in passenger numbers.
The average revenue per available room was £62.37 in London, against £54.85 on a like-for-like basis last time.
The average for the rest of the UK was £47.84 against £45.44.
New York continued to enjoy high volumes of business as the weak dollar helped to boost leisure travel in the US.
Business travel was also improving and helping to strengthen average revenues.
The Millennium Hilton, which reopened in July last year after repairs following damage caused by the September 11 terrorist attacks, continued to perform strongly.
Meanwhile, Asia continued its recovery with a 46% increase in average revenues.
Analyst Paul Leyland at stockbroker Seymour Pierce said current trading was in line with forecasts.
But he pointed out that much of the growth came as a result of weaker comparisons last year.
“It is therefore still too early to assume much long term momentum in the hotel recovery story,” he added.
Shares weakened 9.25p to 309p.
References: EGi News 05/08/04
