Millennium & Copthorne Hotels New Zealand (MCK) H2 2024 earnings summary

Executive summary

• Achieved highest revenue in five years at $176.2m, up 21.0% year-over-year, with operating profit up 32.1% to $42.5m and profit before tax up 25.6% to $47.1m.

• Profit after tax was $2.8m, impacted by a one-off, non-cash deferred tax adjustment of $25.8m; excluding this, profit after tax would be $27.2m.

• Robust balance sheet with net cash of $41.3m and low bank debt; no final dividend declared due to takeover offer conditions.

• Expanded hotel portfolio with acquisition of The Mayfair Hotel Christchurch and first full year of Sofitel Brisbane joint venture.

Financial highlights

• Revenue: $176.2m (up 21.0% year-over-year); Operating profit: $42.5m (up 32.1%); Profit before tax: $47.1m (up 25.6%).

• Profit after tax: $2.8m (down from $21.6m in 2023) due to $25.8m one-off deferred tax adjustment; Adjusted profit after tax: $27.2m.

• Total assets: $762.3m (2023: $746.8m); Book value of property assets: $694.1m; Market value: $1.1b.

• Net asset backing per share (market value): $5.39; Basic EPS: 1.75 cents (2023: 13.65 cents).

• Net cash position: $41.3m; Bank debt: $3.0m at year end.

Outlook and guidance

• Anticipates recovery in tourism and property markets in 2025, with benefits expected for both hotel and property segments.

• Refurbishment and upgrades to key hotels nearly complete, increasing room capacity for 2025.

• CDI to advance development in Hamilton and Hawkes Bay, with critical projects underway.

• Focus on targeted growth, surplus land development, and expanding the My Millennium loyalty scheme.