LONDON (Alliance News) - Millennium & Copthorne Hotels PLC on Friday said first-quarter profit more than halved due to the refurbishment of major hotels in London and Singapore.
The company's pretax profit sank to just GBP11 million in the three months to March 31 from GBP26 million a year before due to the refurbishment of its Mayfair London property, as well as from lower contributions from its Asian hotels and Orchard Hotel Singapore in particular.
Mayfair London was partially closed in November 2017 and the fully closed July 2018, and the Orchard Hotel Singapore has been undergoing phased refurbishment since the mid-2017.
Revenue in the first three months of 2019 fell to GBP215 million from GBP217 million and administrative expenses rose to GBP100 million from GBP95 million.
Moreover, real estate investment trust contributions fell to nothing from GBP3 million a year before and net finance expense rose to GBP8 million from GBP3 million.
The company said it has entered "the final stages" in its discussions with Hilton Hotels Corp regarding Millennium & Copthorne's operation of the recently renamed Millennium Times Square New York as an affiliate of Hilton. The deal would give Millennium & Copthorne access to Hilton's reservation channels and loyalty programme.
Millennium & Copthorne Chair Kwek Leng Beng said: "Despite the uncertainties and challenges in the global economy, we remain focused on making the best use of our hospitality assets. The group is prioritising the refurbishment of our key gateway city properties to reposition our hotels, whilst seeking to minimise the short-term negative impact on our trading results.
"Operationally, we must successfully manage the refurbishment process and re-focus our sales efforts so as to improve yields. To that end, the affiliation agreement with Hilton for the Millennium Times Square New York will allow us to continue to manage one of our most significant hotels and help us to turn around the performance of the hotel more quickly."
Shares in Millennium & Copthorne were up 0.9% at 444.00 pence on Friday morning.