* Q1 pretax profit down 34.7 pct to 16.9 mln stg
* Q1 Revpar up 1.6 pct
* FY profit to be 140-150 mln stg vs 160 mln stg consensus
* Shares down 4 pct
By Neil Maidment
LONDON, May 2 Hotelier Millennium & Copthorne
said full-year profit would fall below expectations in
2013 after warning the worst of a slowdown in its core Asian
market was not yet over.
M&C, with 100 hotels globally, on Thursday said trading in
Asia, where it makes 40 percent of its revenue, had suffered
from slower growth in China, falling tourist numbers in South
Korea and a host of problems in its biggest market, Singapore.
"Singapore will see another increase in the number of hotel
rooms this year, which is putting pressure on revenues, whilst
government's tighter foreign labour quotas are putting pressure
on costs," Chairman Kwek Leng Beng told reporters.
"We also have the spectre of Avian flu returning in Asia, so
all in all the continent looks like it will remain a more
challenging hospitality market for the time being ... The worst
in Asia, I think, is not over."
Shares in the firm, whose profit has also been hit by a 240
million pound hotel refurbishment roll-out, fell 4 percent to
533 pence after the group said the slowdown in Asia - a region
that has led growth in recent years - would hit annual profit.
"I would recommend that the 160 million pounds (full-year)
profit before tax figure to be adjusted downwards to in the
region of 140 million pounds to 150 million pounds," Chief
Financial Officer John Chang told reporters.
According to a Reuters poll of nine analysts, M&C had on
average been expected to post a full-year pretax profit of
161.25 million pounds.
M&C's warning contrasts with more upbeat recent statements
from larger rivals including Intercontinental Hotels,
Starwood Hotels and Marriott.
M&C's pretax profit for the first quarter to March 31,
posted on Thursday, fell by 34.7 percent to 16.9 million pounds
after revenues were hit by the impact of a slowing economy and
less corporate spending in Singapore, poor weather and austerity
measures in Europe, as well as the closure of hotels for
The firm added its Seoul hotel in South Korea had also been
effected by geo-political tensions, and was gloomy on prospects
in South East Asia, where markets like Malaysia, Thailand and
Jakarta in Indonesia had improved year-on-year but could soon
see a slowdown due to changing macroeconomic environments.
"The outlook is more cautious than normal ... In terms of
trading it looks pretty soft and I wasn't expecting it (the
profit downgrade) to be as severe a drop as it was," Liberum
analyst Patrick Coffey said.
M&C, whose brands include Millennium, Grand Millennium,
Copthorne and Kingsgate, said global revenue per available room
(RevPAR) - a key hotel measure - grew by 1.6 percent in the
first quarter, however, on improved trading in the United States
It was also up 1.9 percent in the first four weeks of its
second quarter, it said, with its important London and New York
markets both up, but Singapore and the rest of Asia down.
"The group's financial strength will get us through any
economic storms ahead, we remain focused on repositioning and
upgrading a number of our properties," said Beng, whose firm
ended the first-quarter with net cash of 56.4 million pounds.