City Lodge warns that its profit will halve

City Lodge, which owns the Courtyard, City Lodge, Town Lodge and Road Lodge brands, has warned that its profit has halved for the six months to end-December.

Its normalised headline earnings will fall by between 49% and 54% to between R83.3 million to R75.1 million.

The group blamed “weaker trading conditions” as well as the impact of adopting the IFRS 16 accounting standard -  the International Financial Reporting Standard for the accounting of its leases. 

Excluding the effects of implementing IFRS 16, its headline earnings would have between 27% and 32% lower.

City Lodge’s share price fell almost 5% on Tuesday morning following the profit warning.

It is now trading at around R68 – after reaching R164 less than two years ago.

The company plans to release its result on or about 20 February 2020.