City Lodge Hotel Group (CLHG) said yesterday that its annual results for the year ended June 30, 2022, pointed to a strong recovery and a promising position for the future as the firm reduced its headline loss and saw a steady improvement in occupancies.
This, after the hospitality, travel, and tourism sector were hit hard by Covid-19, devastating riots and insurrection in South Africa.
In its reviewed provisional condensed consolidated results for the year ended June 30, 2022, the group said total revenue for the year increased by 117% to R1.1 billion compared to the previous year’s R508 million.
“This included the 150% increase in food and beverage revenue spurred by our enhanced offering,” CLHG said.
The headline loss improved to R49.5m compared to 2021’s R455.2m. This excluded the profit on disposal of the East African operations, but included an impairment of the deferred tax asset of R20m held in Namibia.
Undiluted headline loss per share improved by 90%, from a loss of 90.9 cents in 2021 to 8.7c in 2022.
CLHG generated positive cash flows from operating activities of R265.8m compared to utilisation of cash from operations of R97.3m in the prior year.
The group settled R720m outstanding interest-bearing borrowings and subsequently entered into new R600m interest-bearing debt facilities, which mature between three and five years, and were at more favourable financial terms and covenants, it said.
The company did not declare a dividend.
Andrew Widegger, the CEO of CLHG, said while the Covid-19 pandemic still lingered, the burden on the hospitality, travel and tourism sector lightened significantly during the year under review. The year had been a tale of two halves.
“We started this financial year in Lockdown Level 4 and in the midst of devastating riots and insurrection in South Africa (SA), which was a stark reminder of how the last few years of state capture and the fresh struggles of the pandemic have affected livelihoods and the economy,“ he said.
Widegger said the past two years of strategic innovation enabled City Lodge Hotel to capitalise on the changing travel trends and needs of the post-Covid traveller.
“CLHG launched the new ‘Eat-In’ offer at all Town Lodges and Road Lodges during the year, which now offers a bespoke lunch and dinner menu, in addition to our much-loved, value-for-money breakfast.
“The enhanced food and beverage offering at all hotels across all CLHG brands has made us more appealing to travellers who prefer hotels with complete accommodation and meal offerings, for the safety and convenience provided under one roof,” he said.
Chief financial officer Dhanisha Nathoo said the steady improvement in occupancies and demand for hospitality services over the past few months had led to average group occupancies, based on total rooms inventory, of 38% compared to 2021’s 19% and 40%; compared to the previous year’s 26% based on the open hotels.
Occupancies for the SA hotels averaged 40% and 42% for open hotels, respectively. The group started the financial year with 89% of its 63 hotels open and by February 2022, opened all of its hotels except one in Nairobi, Nathoo said.
Looking forward, Widegger said there were still many challenges ahead, from the state of the country’s economy, to load shedding, petrol price increases, global inflation trends supply constraints, and geopolitical tensions.
BUSINESS REPORT