CDL ahead of budget

By Phil Boeyen, ShareChat Business News Editor

Thursday 31st May 2001

Hotel operator CDL Hotels (NZSE: CDL) says it has had a strong start to the year with the first four month's performance exceeding expectations.

At its AGM today the company told shareholders that its hotel operations in the first part of the year are showing very significant profit growth, and it is expecting another sound result this year and more improvement next year.

"We believe the continuing new initiatives being adopted by the company will enable CDL to continue to extend its share of the market and improve its overall profitability," it says in a statement.

Last year the company's revenue was 48% higher than the previous year although net profit before tax was affected by a writedown of the Millennium Hotel Sydney.

"If that $23.661million writedown is excluded then the profit (before other items and tax) for the year 2000 would be $27.038 million which compares very favourably to the $12.7 million profit for 1999."

Despite the improved operating profit CDL says it has not been reflected in the company's share price, which has continued to decline and is trading at less than a third of net asset backing.

But it told shareholders that with visitor numbers to NZ set to grow this year, and evidence of more arrivals from Asia, they should be confident that the company is performing well and remains in a very strong financial position.

The company paid a recent dividend of 0.7 cents per share and the board is planning to maintain regular annual dividend payments in the future subject to financial performance and the capital needs.

CDL runs the Millennium, Copthorne and Quality Inn hotel brands. Last year the hotel business contributed 77% of the company's revenue, up from 73% previously.

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