City Lodge Hotels yesterday released an upbeat operational and trading update, saying it expected its annual earnings to leap 75 percent as travel continued to rebound and the hospitality sector “has embraced the renewed activity”.
City Lodge’s headline earnings per share and earnings per share for the year ending June 30, 2022 were expected to show at least a 75 percent improvement, before adjusting for any impairment reversals and/or charges, compared to reported headline loss per share of 91 cents and loss per share of 161c for the comparable period.
City Lodge said yesterday that since reporting (in February, 2022) its interim results for the six months ended December 31, 2021, “travel has continued its rebound and the hospitality sector has embraced the renewed activity, albeit with caution, as the macro-economic outlook remains challenging due to, among others, increased inflation rates, the high price of fuel and the ongoing conflict in Ukraine”.
The improved occupancy trends over the past few months was encouraging, even as the discounted rates started returning toward pre-Covid levels.
City Lodge said the improved occupancy, and the opening of all hotels had enabled the group to relax some of the cost containment measures put in place during the pandemic, and salary reductions had been suspended with effect from May.
Furthermore, the completion of the disposals of its East Africa operations was imminent as the last of the conditions precedent were being finalised, and the “stop date has been extended to the end of June 2022”.
The expected net proceeds from disposal would be applied to repay outstanding debt.
The group said it was in the advanced stages of refinancing its funding arrangements to a R600-million facility in preparation for the current facilities nearing expiry over the next 13 months.