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MILLENNIUM & COPTHORNE HOTELS PLC
INTERIM RESULTS PRESENTATION
03rd AUGUST 2016
WELCOME TO
OUR WORLD OF
HOSPITALITY
H1 2016 HIGHLIGHTS
£m H1
2016
H1
2015
%
Change
Revenue 418 404 3.5%
- at constant rates 418 418 -
Profit before tax 56 62 (9.7)%
- at constant rates 56 63 (11.1)%
Basic EPS 9.3p 11.2p (17.0)%
Interim ordinary dividend per share 2.08p 2.08p -
H1 2016 HIGHLIGHTS
RevPAR – key gateway cities
H1
2016
£
H1
2015
£
%
Change
£
New York 116.31 138.13 (15.8%)
New York LFL 132.87 145.42 (8.6)%
London 91.54 96.66 (5.3)%
London LFL 92.60 99.63 (7.1)%
Singapore 75.60 84.21 (10.2)%
Singapore LFL 75.60 84.21 (10.2)%
FINANCIAL REVIEW
Angela Ong, SVP Finance
The Bailey’s Hotel London
TOTAL REVENUE
Revenue Growth of 3.5%
404 418
5 11
14
(16)
300
320
340
360
380
400
420
RevenueH1 2015
Hotel REIT Property Foreximpact
RevenueH1 2016
£m Total Revenue H1 2015 to H1 2016
• Reported total revenue is up £14m or 3.5%.
• Revenue in constant currency is flat.
• Hotel revenues declined by 1.4%. Down by 4.3% in
constant currency.
• Property revenues are up £11m in constant currency, with
higher land sales in NZ.
• The weakening of the British Pound has a positive translation
impact on our overseas income.
HOTEL REVENUE
Hotel Revenue Declined By 1.4%
365 360
2
11 (2)
(16)
300
310
320
330
340
350
360
370
Hotel RevenueH1 2015
Acquisitions Net roomopenings
Underlying Foreximpact
Hotel RevenueH1 2016
£m Hotel Revenue H1 2015 to H1 2016
• Hotel revenue is down by 1.4%.
• In constant currency, hotel revenue declined by 4.3%.
• Deterioration of trading in our NY, London and Singapore
hotels.
• FX gain of £11m.
OPERATING PROFIT AND PROFIT BEFORE TAX
Operating Profit down 7.8%
64 59
7 3
2 2
(15)
(4)
40
45
50
55
60
65
Op ProfitH1 2015
Hotels Property Central costs Insurance Claim RevaluationDeficit
Forex Impact Op ProfitH1 2016
£m Operating Profit H1 2015 to H1 2016
• Operating profit is down by 7.8%. PBT is down by 9.7%.
• New York hotel operating loss has increased by £8m to
£10m.
• Property operations contributed £15m in profit, an
increase of £7m.
• Central costs is lower by £3m.
• Revaluation deficit relating to Tanglin Shopping Centre of
£4m.
62
56
2
(7) (1) (0) 50
54
58
62
PB
T H
1 2
015
Ope
ratin
g P
rofit
Share
of
JV
/Asso
cia
tes
Ne
t F
inance
cost
Fore
x Im
pact
PB
T H
1 2
016
£m PBT H1 2015 to H1 2016
96.66
50.18
138.13
50.49
84.21
55.04 45.02
91.54
50.42
116.31
51.57
75.60
56.77 51.64
20
40
60
80
100
120
140
160
London Rest of Europe New York Regional US Singapore Rest of Asia Australasia
H1 2015 *
H1 2016
REGIONAL REVPAR TRENDS
* Restated at H1 2016 rates
Group RevPAR down 4.2% in Constant Currency
Rest of Europe: Paris was impacted by terrorist attacks. Excluding Hard Days Night Hotel, RevPAR declined by 1.6%.
New York: Influx of new inventory and struggles with rates. Excluding ONE UN, RevPAR fell by 8.6%.
Singapore: Weak demand in corporate travel segment and increasing room supply putting pressure on pricing. Rest of Asia: RevPAR up, with strong
performance in Seoul after room refurbishment programme.
Australasia: Strong growth, driven by increased overseas visitors.
Regional US: Reflecting a pick-up in trading.
London: London RevPAR impacted by threat of terrorism related attacks leading to reduction in group bookings and individual travellers. Excluding Bailey’s, RevPAR fell by 7.1%
(5.3%)
0.5%
(15.8%)
2.1%
(10.2%)
3.1%
14.7%
£
96.66
50.18
138.13
50.49
84.21
55.04 45.02
91.54
50.42
116.31
51.57
75.60
56.77 51.64
20
40
60
80
100
120
140
160
London Rest of Europe New York Regional US Singapore Rest of Asia Australasia
H1 2015 *
H1 2016
REGIONAL REVPAR TRENDS
* Restated at H1 2016 rates
Group RevPAR down 4.2% in Constant Currency
Rest of Europe: Paris was impacted by terrorist attacks. Excluding Hard Days Night Hotel, RevPAR declined by 1.6%.
New York: Influx of new inventory and struggles with rates. Excluding ONE UN, RevPAR fell by 8.6%.
Singapore: Weak demand in corporate travel segment and increasing room supply putting pressure on pricing. Rest of Asia: RevPAR up, with strong
performance in Seoul after room refurbishment programme.
Australasia: Strong growth, driven by increased overseas visitors.
Regional US: Reflecting a pick-up in trading.
London: London RevPAR impacted by threat of terrorism related attacks leading to reduction in group bookings and individual travellers. Excluding Bailey’s, RevPAR fell by 7.1%
(5.3%)
0.5%
(15.8%)
2.1%
(10.2%)
3.1%
14.7%
£
OPERATION REVIEW
Aloysius Lee, CEO
Grand Hyatt Taipei
Operation Review
Brexit and Recent Events in Europe
• Referendum result could impact London, one of our most profitable regions, on revenue and cost
lines
• Terrorist attacks and other events add to uncertainty regarding future trading
29 June (Istanbul, TUR) – Airport Bombings
14 July (Nice, FRA) – Lorry Attack
18 July (Wuezburg, GER) – Train Incident
22 July (Munich, GER) – Shopping mall Shooting
24 July (Anbach & Reutlingen, GER) –
Multiple
26 July (Saint-Etienne-du-Rouvray, France) – Church
Incident
Terror Events
(Late June – July 2016)
Uncertainties
Currency Fluctuation
Staffing Issues
Brexit Referendum Result
(June 24)
Operation Review
Opportunities as well as Threats
• Boost in domestic tourism is noted by several media
outlets to be the key effect following recent terror
events and Brexit effects.
• M&C, with hotels in all key cities, are perfectly
poised to capitalize on any inflow of domestic
tourists to these cities
Operation Review
Brexit – Staff Issues
EU 37%
UK Nationals
50%
ROW 13%
Total UK
EU 55% UK
Nationals 28%
ROW 17%
London
• Over one-third of UK hotel staff come from neighbouring EU nations. In London, more than
half.
• Their eligibility to work in the UK is unclear.
• Contingency planning at this stage
• Additional pressure on costs from National Living Wage legislation
EU 26%
UK Nationals
66%
ROW 8%
Regional UK
ROW: Rest of the World
Operation Review
Revenue Initiatives
• The Group is focused on several key areas to improve revenue and reduce cost.
• Cross-regional management team targeting key areas for growth
M&C Revenue Practices
Targeting Growing Markets
Digital Platform
Prudent Cost
Spending
Upselling Initiatives
This presentation contains certain statements that are or may be forward-looking with respect to the financial condition, results or operations and business of Millennium & Copthorne Hotels plc. By their
nature forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual
results and developments to differ materially from those expressed or implied by such forward-looking statements. Undue reliance should not be placed on forward looking statements which speak only as of
the date of this document. The Group accepts no obligation to publicly revise or update these forward-looking statements or adjust them to future events or developments, whether as a result of new
information, future events or otherwise, except to the extent legally required.
THANK YOU
Hard Days Night Hotel, Liverpool