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Hotel group Millennium & Copthorne said the post-Brexit fall in sterling had a major impact on its full-year results as it warned of an “intense” profit squeeze last year and continues its hunt for a new chief executive.
The hotelier said that Tan Kian Seng, its current chief and staff president of its Asia division will become interim CEO from March 1 following the resignation Aloysius Lee.
In the aftermath of the UK’s vote to leave the EU in June, Millennium said it had seen an immediate boost to earnings in its third quarter. Sterling has fallen around 17 per cent against the dollar since the referendum, helping flatter the hotelier’s earnings performance.
Millennium’s full year measure of revenues per room (RevPAR), a key hotel metric, was up by 6.6 per cent last year to £76.71 but fell when measured in constant currency terms by 2.3 per cent.
Total revenue rose by £79m, or 9.3 per cent, to £926m but was again flat in when stripping out exchange rate moves, “indicating that exchange translation contributed £79m to total reported revenue” said Millenium.
Profits in constant currency terms were down 12.9 per cent but just 0.9 per cent lower when accounting for sterling’s moves to £108m
Chairman Kwek Leng Beng said:
Pressure on revenue and profit was intense in all of our key gateway cities. In London, leisure business in the first quarter was impacted by the November 2015 Paris terror attacks and in the second half of the year trading was affected by reduced corporate business.
New York results were affected by significant under-performance at Millennium Broadway as well as the refurbishment of ONE UN’s east tower, which is now complete.