MCK: 2018 Interim Results Announcement

MCK REPORTS ANOTHER INCREASE IN REVENUE AND OPERATING PROFIT FOR THE FIRST HALF OF 2018 New Zealand hotel owner / operator, Millennium & Copthorne Hotels New Zealand Limited (NZX:MCK), today announced its (unaudited) results for the six months to 30 June 2018: In summary: --Average hotel occupancy across the Group = 83.2% (2017: 81.3%) --Group revenue and other income = $127.51 million (2017: $104.14 million) --Operating profit before finance income = $53.84 million (2017: $42.92 million) --Profit before income tax and non-controlling interests = $54.66 million (2017: $43.91 million) --Profit after tax and non-controlling interests = $30.15 million (2017: $24.23 million) MCK Chairman & Independent Director Colin Sim said that the results reflected the steady tourism market in New Zealand and growth in section sales from CDL Investments. MCK's Managing Director Mr. BK Chiu noted that the newly rebuilt and refurbished M Social Auckland and the recently acquired Millennium Hotel New Plymouth Waterfront had made contributions to the half-year result. "We are pleased that these two hotels are performing well and making valuable contributions to our results", he said Mr Chiu noted that the commercial accommodation market has become more competitive over the past two years with the entry of several traditional and non-traditional suppliers. "However, we are confident of our competitive position as we focus on the demand side of the equation in selected market segments and the guest experience", he said. MCK also noted that it is party to a judicial review brought by several Auckland hotel owner / operators against Auckland Council in relation to the Accommodation Provider Targeted Rate (APTR). The review seeks to rescind the APTR on the basis of unfairness and lack of consultation by Auckland Council. As the matter will likely be in 2019, MCK said that it would not have any material impact on its 2018 results. Looking at the remainder of this year, MCK's Board said that it expected to better its 2017 performance in 2018 with both its hotel and residential section sales operations. ENDS Issued by Millennium & Copthorne Hotels New Zealand Ltd Any inquiries please contact: B K Chiu, Managing Director Millennium & Copthorne Hotels New Zealand Ltd (09) 353 5058 *_*_*_*_*_*_*_*_*_*_* CHAIRMAN'S REVIEW Financial Performance: Millennium & Copthorne Hotels New Zealand Limited ("MCK") announced an unaudited profit after tax and non-controlling interests of $30.15 million for the six month period ended 30 June 2018 (2017: $24.23 million). Profit before income tax and non-controlling interests was $54.66 million (2017: $43.91 million). Group revenue and other income for this increased to $127.51 million (2017: $104.14 million) and gross profit for the period also increased to $77.66 million (2017: $62.33 million). These increases in profit and revenue from the previous year reflect a steady tourism market across New Zealand as well as additional contributions from M Social Auckland and Millennium Hotel New Plymouth Waterfront. MCK's majority-owned land development subsidiary CDL Investments New Zealand Limited also saw good sales in the first half of 2018 which boosted MCK's overall results. Earnings per share for the period increased to 19.05 cents per share (2017: 15.32 cps). New Zealand Hotel Operations: The New Zealand hotel operations (14 owned or leased and operated hotels (excluding 5 franchised and 2 managed hotels) continue to perform well. Revenue for the period increased in the past six months to $64.27 million (2017: $51.63 million). RevPAR also increased by 13.2% to $133.12 (2017: $117.63). Occupancy for the owned / leased hotels for the period improved to 83.2% (2017: 81.3%). While demand for accommodation remains steady, the imminent arrival of new competitors in regions such as Auckland and Queenstown together with non-traditional accommodation supply has seen rate pressure in certain market segments. MCK is party to a judicial review action brought by several Auckland hotel owner / operators against Auckland Council in relation to the Accommodation Provider Targeted Rate (APTR). This High Court action seeks to rescind the APTR on the basis of unfairness and lack of consultation by Auckland Council and will likely be heard some time in the first half of 2019. This will have no material impact on MCK's 2018 results. CDL Investments New Zealand Limited ('CDL'): CDL announced an unaudited operating profit after tax for the six months ended 30 June 2018 of $25.47 million, (2017: $20.39 million). Sales were recorded in Auckland, Hamilton and Canterbury. While it has noted that market conditions in some areas appear to have peaked, CDL remains on target to better its 2017 results. Offshore investments - Australia: Occupancy at the Zenith Residences, Sydney was steady at 88.5% across the complex. Apartment units are now being put up for sale as the leases expire and one apartment was sold in the first half of 2018. Outlook: The outlook for the group as a whole remains positive for the rest of 2018. MCK's hotels are expected to continue to see positive occupancy and revenue and with further sales from CDL, the Board expects MCK to better its 2017 performance this year. Colin Sim Chairman 2 August 2018 End CA:00321579 For:MCK Type:HALFYR Time:2018-08-02 08:30:09