SINGAPORE / LONDON, Nov 18, 2020 – (ACN Newswire) – – A year after delisting from the London Stock Exchange, Millennium & Copthorne Hotels Limited (M&C), a global hospitality leader, disclosed today major initiatives that will prepare it for a recovery by as early as 2021 from the recent challenges caused by the COVID-19 pandemic.
The privatisation granted M&C greater agility and cushioned impact of the pandemic. Lessons learned and operational changes in recent months have helped to lay a much stronger foundation. Properties across the globe have started to show ‘green shoots’ of improvements in occupancy and Gross Operating Profit (GOP) from the second half of 2020 which are expected to gain momentum in 2021.
London-headquartered M&C was privatised on 19 November 2019 after delisting from the London Stock Exchange at a valuation of GBP2.23 billion (S$3.96 billion). M&C operates 66 hotels (seven of which are managed by third parties) in Asia (12), Europe/UK (21), USA (18) and New Zealand (15) under the Millennium Hotels and Resorts (MHR) global brands; and 79 are under franchise and management contracts.
M&C, with an inventory of over 40,000 rooms and operations in 29 countries, is wholly owned by Singapore Exchange-listed City Developments Limited (CDL), a leading global real estate company with total assets of over S$23.8 billion. CDL is also a Sponsor that holds an effective 37.8% effective stake in CDL Hospitality Trusts (CDLHT), a Singapore-listed Real Estate Investment Trust (REIT) with a market value of over S$1.40 billion.
Assessing The Operating Landscape
In 2019, M&C recorded revenue of GBP1.025 billion (S$1.82 billion) (2018: GBP997 million (S$1.78 billion)) and a pre-tax profit of GBP102 million (S$181.2 million) (2018: profit of GBP106 million (S$188.3 million)) and included net valuation and impairment charges of GBP34 million (S$60.4 million) (2018: GBP36 million (S$101.2 million)). Excluding the effects of impairment losses and net revaluation gains, M&C reported profit before tax of GBP136 million (S$241.6 million) in 2019 (2018: GBP142 million (S$252.3 million)).
M&C has assessed as positive recent reports of vaccines against COVID-19, air travel ‘bubbles’, the recent US presidential elections and plans to hold the Tokyo Olympics in 2021 (postponed from 2020). The signing by 15 countries of the Regional Comprehensive Economic Partnership (RCEP) world trade pact also points to a brighter future for the region.
In Singapore, where M&C operates over 2,000 hotel rooms, several properties will resume pre-COVID-19 activities such as selling rooms, corporate bookings, events and weddings in the next few months.
M&C recognises that in this ‘new normal’ hygiene is much more important when a customer chooses a hotel, restaurant or consider events; and that brands must look beyond ‘personal touch’ and ambience to include the promise of safety and to emphasise value for money.
The new business dynamics mean that large hospitality groups such as M&C must have sufficient working capital to weather possible prolonged uncertainty or