The City Lodge Hotels Limited – Annual results for year ended 30 June 2016
The City Lodge Hotel Group has begun the development of a 151-room Town Lodge hotel in Windhoek, Namibia, and is making good progress with the development of two new City Lodge branded hotels in Nairobi, Kenya, and Dar es Salaam, Tanzania.
Town Lodge Windhoek – which will be the 60th hotel in the group - is expected to open in July 2017, City Lodge Hotel Two Rivers (Nairobi) by July 2017 and City Lodge Hotel Dar es Salaam towards the end of the fourth quarter of 2017.
Announcing its results for the year ended 30 June, 2016, the group said final approvals are still being sought for the development of the 148-room City Lodge Hotel Maputo in Mozambique. It is hoped that construction will begin in the current quarter for completion in the first quarter of 2018.
Total revenue for the year grew by 14.6% to R1.5bn, boosted by a full year’s contribution from City Lodge Hotel Waterfall City, the opening of the 90-room Road Lodge Pietermaritzburg in December 2016, the opening of the 147-room City Lodge Hotel Newtown in February and the first full year consolidation of the Courtyard Hotel brand.
Average occupancies for the year decreased by one percentage point to 66% with South African occupancies negatively impacted by low business confidence, poor consumer sentiment and negligible economic growth.
Normalised headline profit before tax increased by 12.4% to R511.8m while normalised headline earnings increased by 12.5% to R373.7m. Normalised diluted headline earnings per share rose by 13.2% to 859.9 cents. A final dividend of 248 cents was declared, taking the year’s dividend distribution to 517 cents, up 12.4% on the previous year.
Chief executive Clifford Ross said the group continues to assess development opportunities in South Africa, Southern Africa and East Africa.
While he said the group’s 2017 financial year has started off with softer occupancies than in the previous year, mainly due to disruption to business travel from the recent local government elections, the upward occupancy trend that began in late 2011 is expected to resume with a limited number of new hotel rooms opening in the South African market.