February 21, 2014 / 11:41 AM / 4 years ago

UPDATE 1-Hotel chain M&C rises on strong profit, special dividend

(Adds analyst comments, details and share movement)

Feb 21 (Reuters) - Hotel chain operator Millennium & Copthorne announced 20.66 pence per share in dividends after its full-year profit jumped 54 percent as it booked revenue from the sale of Singapore condominiums.

The owner of the Millennium, Grand Millennium, Copthorne and Kingsgate chain of hotels proposed a special dividend of 9.15 pence and a final dividend of 11.51 pence per share, sending its shares up as much as 6 percent on Friday.

The stock was up 25.5 pence at 596.94 pence at 1122 GMT, making it one of the top percentage gainers on the FTSE-250 Midcap Index.

Competitor InterContinental Hotels Group’s shares took a hit earlier this year after the company failed to announce a return of cash to shareholders.

“We remain cautiously optimistic about the Group’s full-year performance in 2014 despite uncertainty affecting some regions, and poor weather conditions in US and UK in the first quarter,” said Chairman Kwek Leng Beng.

Millennium & Copthorne (M&C) is majority-owned by Kwek’s Singapore-based property company City Developments Ltd and has a big presence in Singapore, London and New York.

“The global economy is not fully restored to complete health, with pockets of uncertainty continuing to affect some travel destinations,” the company said in a statement.

M&C reported a pretax profit of 263.6 million pounds ($439.14 million) for the year ended Dec. 31, compared with 171.3 million pounds a year earlier. Revenue rose 35 percent to 1.04 billion pounds.

The company said in December that the sale of 147 condominiums by its subsidiary Glyndebourne Development in Singapore brought in revenue of 274 million pounds.

Millennium & Copthorne, which operates over 110 hotels, said on Friday that the sale contributed 139.3 million pounds to pretax profit.

Revenue per available room (RevPAR) - a metric of hotel health, calculated by multiplying a hotel’s average daily room rate by its occupancy rate - rose 3.4 percent to 69.58 pounds due to overall improvement in room rates in the United States, from where M&C gets more than a fourth of revenue.

M&C said group RevPAR increased 5.3 percent in the first six weeks of 2014 on a reported currency basis, with RevPAR up 5.8 percent in New York.

Hotel chains are benefiting from improving demand and lower than average growth in new rooms in the United States.

U.S.-listed Starwood Hotels & Resorts Worldwide Inc also said earlier this week that RevPAR rose almost 8 percent at company-operated hotels in North America in January.

M&C recently acquired Novotel New York and the Chelsea Hotel in London to bolster its presence in these cities.

“We note that 2015 numbers could benefit from the two new hotels in London and New York, with both acquisitions set to complete in Q1 and Q2 2014,” Panmure Gordon analysts said in a note. ($1 = 0.6003 British pounds) (Reporting by Noor Zainab Hussain and Aastha Agnihotri in Bangalore; Editing by Supriya Kurane and Saumyadeb Chakrabarty)

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