City Lodge Hotels Reports Strong Interim Results for H2 2023
CITY LODGE HOTELS INTERIM RESULTS FOR H22023: THE GROUP SEES STRONG RECOVERY, OVERCOMES PANDEMIC CHALLENGES, AND EYES SUSTAINABLE FUTURE.
City Lodge Hotels has posted robust interim results for the six months ending December 2023, signaling a strong recovery from pandemic challenges. Revenue soared to R1.0 billion, marking an 18% increase from 2022.
Group occupancy witnessed a notable uptick, rising by 4 percentage points to 61%, outperforming the pre-COVID levels by six points. Earnings per share (EPS) saw a significant surge of 10%, reaching 18.8c. Excluding certain factors, EPS showed a remarkable 66% increase, reaching 20.0c.
City Lodge Interim Results
Here are the insights of City Lodge Interim Results for H2 2023:
Revenue Growth and Financial Position
The revenue surge is attributed to a 16% increase in accommodation revenue and 36% rise in food and beverage revenue. The group’s net cash position strengthened to R54.6 million, marking a turnaround from the net debt of R52.1 million in 2022.
Despite economic challenges, the strategic adoption of best available rates (BAR) and an improved food & beverage offering contributed to the overall revenue surge.
Dhanisha Nathoo, CFO, emphasized the group’s financial position, having access to R600.0 million in available debt facilities. The group remains optimistic about its strategy and the country’s recovery, maintaining confidence amid economic uncertainties.
The City Lodge’s approach to balancing cost control and strategic investments in refurbishments and marketing initiatives has contributed to its financial resilience.
Operational Highlights and Future Initiatives
City Lodge Hotels showcased its commitment to sustainability with solar installations, water supply resilience strategies, and energy-efficient initiatives. The group achieved a 3% increase in EBITDAR and a 10% rise in profit for the period.
In line with its strategy, the group repurchased shares and declared an interim cash dividend of 6.00 cents per share.
While optimistic about the recovery, CEO Andrew Widegger acknowledged challenges posed by the South African economy, including low GDP growth and inflation. The pending government elections have introduced uncertainty, impacting business and consumer confidence.
City Lodge Hotels anticipates stable power supply and reduced utility usage post the completion of sustainable energy initiatives. The sale of City Lodge Hotel Sandton, Katherine Street, is in progress, promising further strategic reinvestment.
