Hotels group Millennium and Copthorne has fallen sharply after a 15% decline in earnings and a weak start to 2013.
The company, which operates 100 hotels worldwide, said full year profits came in at £157.7m, down from £184.7m and marginally below analyst expectations. Its progress was hampered by increased refurbishment costs. It added that like for like room revenues had fallen 1.1% in the first six weeks of the new year, compared to a 3.4% rise in the same period last year.
Its shares have lost 19.5p to 548.5p on the news, and Credit Suisse analysts said:
[The results] reflect negative short term refurbishment impacts that we expect to continue through 2013, curtailing earnings per share growth but offering long term upgrade potential. The lack of visibility or target price upside keeps us neutral rated.
Three balance sheet factors are highlighted in today's release: 1) group is now net cash (¥52m); 2) the latest external hotel valuation supports an adjusted net asset value of 824p per share and 3) the chairman states no intention to dispose of gateway assets [Singapore, London and New York] but this leaves the door open for regional UK/US disposals, in our view.
