Johannesburg - City Lodge Hotels on Thursday reported
a 31% decline in diluted headline earnings per share to 360.2c for the year ended
June 2009 from 524.9c a year ago. Normalised diluted HEPS were up 4% at 549.2c.
An ordinary dividend of 158 cents per share was declared compared with 194 cents a
year ago. The full year dividend was 361 cents compared with 2008's 371 cents.
The group, which is currently involved in its biggest-ever expansion programme,
achieved an average occupancy rate of 77% and an 11% rise in turnover to R665m.
Profit before tax on a normalised basis increased by 5.4% to R353m and
normalised headline earnings grew by 4.2% to R236m.
These results were achieved against a backdrop of a weak economy and a second half
adversely affected by public holidays, especially April which had an extra mid-week
holiday added for this year's general election.
The group opens the first phase of its 44th hotel - the 125-room Road Lodge
Umhlanga Ridge - on August 14, and has nine new hotels and an extension to an existing
hotel in various stages of development, all of which will be completed by the end of
Once these developments have been completed, the group will have a portfolio of 53
hotels across its four brands - Road Lodge, Town Lodge, City Lodge and Courtyard -
offering 6 629 rooms across South Africa.
Given the extensive development programme, the group has dropped its dividend
payout ratio for the final dividend to 60% from 70% of normalised net profit,
resulting in a full year dividend of 361 cents (2008: 371 cents).
New hotels currently under construction include: City Lodge OR Tambo Airport (303
rooms), City Lodge Fourways (211 rooms), City Lodge Lynnwood (205 rooms), City Lodge
Hatfield (187 rooms) and Town Lodge Port Elizabeth (203 rooms).
Construction will commence shortly on Road Lodge Port Elizabeth Airport (90 rooms)
and Road Lodge Bloemfontein Airport (66 rooms) while final approvals are imminent
regarding Road Lodge Southgate (118 rooms) and Town Lodge Grayston Drive, where 70
rooms are being added to the existing hotel. A site has also been secured for the
development of a 187-room Town Lodge at Umhlanga Ridge.
The group has secured long-term debt facilities of R400m to facilitate
the funding of the biggest expansion programme it has undertaken in its 25-year
history. As at June 30, R100m had been utilised.
Looking ahead, founder and non-executive chairperson, Hans Enderle, said the group is
well positioned and prepared for the 2010 Fifa World Cup, only half of which will
occur in the 2010 financial year.
"There are some signs of improving demand, but trading conditions are expected to
remain soft in the short term," he said.
"Occupancies are not expected to normalise until the 2011 financial year, which
will also benefit from half of the World Cup, an anticipated recovery in local and
global economies, and contributions from the new hotels being added to our portfolio."