Johannesburg - City Lodge’s expansionary plans are paying off for the group as new additions to its portfolio helped boost revenue for the year to June 14.6 percent.
The group, which is moving ahead with more new hotels, says income for the full 12 months was R1.5 billion, while pre-tax profit gained 12.4 percent to R511.8 million. Normalised headline earnings - a key measure of profitability - increased 12.5 percent to R373.7 million.
City Lodge Group says its turnover was bolstered 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.
Normalised diluted headline earnings per share rose 13.2 percent to 859.9 cents and a final dividend of 248 cents was declared, taking the year's dividend distribution to 517 cents, up 12.4 percent on the previous year.
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In a statement, the listed hotel company says it 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 - should 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.
In addition, 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, it says in a statement.
However, the group acknowledges the economic hardships that consumers are facing.
It says average occupancies for the year decreased by one percentage point to 66 percent with South African occupancies negatively impacted by low business confidence, poor consumer sentiment and negligible economic growth.
CEO Clifford Ross says the group continues to assess development opportunities in South Africa, Southern Africa and East Africa.
Ross added that, although 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.
IOL