Millennium & Copthorne Hotels posts $40M profit, bolstered by property development
By Sophie Boot
Feb. 17 (BusinessDesk) - Millennium & Copthorne Hotels New Zealand, the hotel operator and property developer, nearly doubled profit in 2016, while CDL Investments, the residential property developer it controls, lifted net profit 55 percent in the year with housing in high demand.
The hotel operator lifted profit to $40.4 million in calendar 2016 from $21.7 million in 2015, on a 26 percent lift in revenue to $172 million. Strong sales at CDL contributed significantly to the results, offsetting the closure of the Copthorne Hotel in Auckland's Harbour City, the company said. The Millennium board declared a 5 cents per share dividend, with a May 12 record date, payable on May 19.
"2017 will be another exciting year for MCK as it will mark the opening of M Social Auckland in the second half after extensive refurbishment. The financial impact of having Grand Millennium Auckland for a full year will also be reflected in our results," the company said. "We expect to benefit from the growing tourism interest in New Zealand and the Lions Rugby Tour.
"We also expect strong sales activity at CDL Investments to continue which will also assist our profitability. Given all of these factors, we aim to exceed our 2016 trading results in 2017."
Listed subsidiary CDL lifted profit to $27 million from $17.5 million a year earlier, with property sales and other income up 57 percent to $74.5 million a year earlier. The board will pay a 3 cent dividend on May 19, with a May 5 record date.
Managing director BK Chiu said that in 2017 CDL would look to increase its sales activity and ensure that the company continues to grow by acquiring additional land for development in the future.
"Our recent land purchase in Westgate/Whenuapai West Auckland looks promising under the Auckland Unitary Plan," Chiu said. "We remain mindful and disciplined with regard to the fundamentals of land investment and its development in an environment of high land price expectations.
"In the meantime, the land development work established through 2015 and 2016, and moving into 2017 will better enable us to deliver profitable growth in 2017 from our existing subdivisions at Greville Road (Auckland), Magellan Heights (Hamilton), and Prestons Park (Christchurch)."
Millennium shares last traded at $2.95, up 1.4 percent today, while CDL shares rose 10 percent to 88 cents.