Johannesburg - City Lodge Hotels is set to expand its hotel portfolio by 15% to 7 837 rooms over the next few years as it moves ahead with development plans.
The group, which celebrated its 30th birthday on August 1, says its average occupancy in the year to June gained 4 percentage points to 67% compared to 63% in the previous year, despite the impact of several headwinds. These issues included less public holidays than last year, a slowdown in Kenya due to the perceived Ebola risk and ongoing travel advisories issued by various governments in regard to security concerns in parts of East Africa.
In a statement to shareholders, the listed company says total revenue for the year gained 22.6% to R1.3 billion, assisted by a contribution from City Lodge Hotel Waterfall City, which became fully operational in February, and from the acquisition of Hospitality Property Fund’s 50% stake in the Courtyard Joint Venture with effect from May for R77.5 million.
Its post tax profit came in 15% higher at R318.3 million, while normalised headline profit before tax for t increased by 18.7% to R455.7 million. Normalised headline earnings increased by 17.9% to R332.1 million.
The company adds it will be expanding its South African and African presence through the addition of new hotels.
In South Africa, City Lodge Hotel Newtown (148 rooms) and Road Lodge Pietermaritzburg (90 rooms) are on schedule for a phased opening towards the end of the fourth quarter, with both hotels fully operational early in 2016, it says.
In addition, construction on the 169-room City Lodge Hotel Two Rivers in Nairobi is due to start in September with completion expected in the first quarter of 2017. Construction on the 147-room City Lodge Hotel Dar es Salaam is expected to begin during September, with completion also targeted for the first quarter of 2017.
City Lodge adds formal agreements are due to be signed shortly relating to a 150-room City Lodge Hotel in Kampala, but these remain subject to the completion of a detailed feasibility study. “It is anticipated that the study will be favourable and that construction will commence in the fourth quarter of 2015 or the first quarter of 2016.”
The company has also inked formal agreements for the lease of land in Maputo for the development of a 148-room City Lodge Hotel. Building work will start once final development approvals are received, which the listed company expects to happen in the last quarter of this year, or early 2016, allowing it to complete the hotel in the first quarter of 2017.
In Windhoek, formal agreements have now been signed for the development of a 151-room Town Lodge, which it will start building in the first quarter of next year.
City Lodge, which expects to continue increasing occupancy rates, declared a 230c dividend, taking the total dividend for the year to 460 cents per share, a 17.7% increase on the previous year.
IOL