Millennium & Copthorne first half profit soars 93% on hotels, property developments

Net profit after minorities rose to $12 million, or 7.59c per share, in the six months ended June 30.

Hotel operator and property developer Millennium & Copthorne Hotels New Zealand [NZX: MCK] boosted first-half profit by 93% as it lifted the performance of its hotel operations and its property developments turned profitable in the period.

Net profit after minorities rose to $12 million, or 7.59c per share, in the six months ended June 30, from $6.2 million, or 1.4c, a year earlier, the Auckland-based company said in a statement. Revenue rose 4.5% to $70 million. The year-earlier profit was eroded by a $3.1 million loss in then-associated Chinese property development firm First Sponsor Group.

Last week Millennium said it has embarked on a $40 million refurbishment of its Copthorne Hotel Auckland Harbourcity. The hotel will be closed until early 2017 while the company replaces building services, adds new guest rooms and public areas.

"It is pleasing to be able to report further improvements on our 2014, and this confirms our current strategies of our short and medium-term capital expenditure programme dovetailing with our operational, sales and marketing initiatives in a fast-changing market environment," managing director BK Chiu said. "We are currently working on delivering a similar result to 2014, even with one earnings-significant hotel less."

Earlier today, Millennium-controlled CDL Investments, which develops residential property, reported a 3.6% increase in first-half profit to $8.5 million, selling 128 sections at subdivisions in Hamilton, Hawke's Bay and Rolleston.

Millennium's hotel operations lifted first-half profit 19 percent to $8.1 million on a 10 percent in crease sales to $44.7 million, while its residential land development unit increased profit 2.6 percent to $11.7 million on a 4% decline in revenue to $23.9 million.

Its residential and commercial property development segment, which included the First Sponsor business, generated a profit of $600,000 on $1.4 million of revenue, compared to a loss of $3.3 million on sales of $1.4 million a year earlier.

The board didn't declare an interim dividend. Millennium's shares were unchanged at $1.40, and have gained 7.7% this year. CDL's shares were unchanged at 64c.