By Phil Boeyen, ShareChat Business News Editor
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Wednesday 13th March 2002 |
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The company is New Zealand's largest hotel business with a portfolio of 28 hotels under the Millenium, Copthorne and Quality Hotel brands. It also owns stakes in listed investment subsidiaries Kingsgate International and CDL Investments.
The net profit figure for the year ended December was a rise of 637% compared with the previous year's $1.45 million and has prompted the company to declare a fully imputed special dividend of 0.7 cents per share in addition to its ordinary dividend of 0.7 cents.
Managing director, Tsang Jat Meng, says a solid performance from the NZ hotel operation underpinned the latest result.
"This is very pleasing given the testing environment experienced by the local tourism market resulting from the demise of Qantas New Zealand, the aftermath of the September 11 tragedy and the uncertainty that surrounded Air New Zealand and Ansett Australia.
"Any one of these situations on its own would have been a significant issue for us. But with all three coming at once it certainly created its challenges."
Mr Tsang says despite the challenges the NZ hotels lifted occupancy by 4% in the second half of the year and yields for the year were 5.2% higher than previously, helped by a very strong conference period in Christchurch and a good ski season.
"Despite the drop in inbound traffic, international arrivals made up 65% of the guest mix for the New Zealand hotels operation. This compared to 62% the previous year."
Although turnover from the New Zealand hotels operation was up 5.3% on 2000 levels at $105.2 million total turnover for the company fell from $242.1 million to $202.3 million.
This includes a drop in earnings contribution from the property operations of the subsidiary companies, which slipped to $11.9 million from $21.4 million in 2000.
"This was mainly due to reduced apartment sales at Kingsgate and a $2.1 million loss attributed to the business of Knight Frank New Zealand Limited, which CDL Investments has now sold," says Mr Tsang.
Despite lower revenue at Kingsgate Mr Tsang says the company, which is 50.74% owned by CDL Hotels, had a solid year and lifted net operating profit to $10.8 million previously.
Kingsgate's operations include the Millennium Hotel in Sydney, the Birkenhead Point Shopping Centre, The Kingsgate Shopping Centre, the Birkenhead Marina and the Birkenhead Quays Project comprising 148 apartments.
However Mr Tsang says the $264,000 net loss at New Zealand-based property development and services subsidiary CDL Investments was disappointing. It is 60.12% owned by CDL Hotels.
"Though CDL Investments produced a disappointing result, it has taken steps to ensure that it will return to profitability and as such make a positive contribution to the group in the current year, which already has begun well."
Both Kingsgate and CDL Investments are fully consolidated into CDL Hotels' accounts.
Mr Tsang said the outlook for the group remained positive, with encouraging prospects for property and tourism in Australasia.
"We are in good shape and looking at opportunities to expand, particularly in Auckland and Wellington," he says.
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