Millennium & Copthorne Q1 profit hit by refurbishments

Millennium & Copthorne posted a drop in first-quarter revenue and pre-tax profit on Friday as it took a hit from the refurbishment of some of its hotels.

Total revenue declined 0.9% during the quarter to £215m, while pre-tax profit fell 57.7% to £11m. However, revenue per available room was up 2.2% at £70.01.

At constant currency, total revenue was down 4% to £224m, while RevPAR was 0.9% lower at £70.65 and pre-tax profit also fell 57.7% to £26m.

The company said it had been negatively impacted by refurbishment affecting major hotels in two of the its key gateway cities - London and Singapore. The Mayfair London property was partially closed in November 2017 and then fully closed in July 2018, while the Orchard Hotel in Singapore has been under phased refurbishment since the middle of 2017.

M&C said it is in the final stage of discussions with Hilton regarding the group's operation of the newly renamed Millennium Times Square New York, formerly known as the Millennium Broadway New York Times Square, as an affiliate of Hilton, with access to its reservation channels and loyalty programme.

Chairman Kwek Leng Beng said: "Despite the uncertainties and challenges in the global economy, we remain focused on making the best use of our hospitality assets. The group is prioritising the refurbishment of our key gateway city properties to reposition our hotels, whilst seeking to minimise the short-term negative impact on our trading results.

"Operationally, we must successfully manage the refurbishment process and re-focus our sales efforts so as to improve yields. To that end, the affiliation agreement with Hilton for the Millennium Times Square New York will allow us to continue to manage one of our most significant hotels and help us to turn around the performance of the hotel more quickly."