Mantra kicks goals
MANTRA Group has set itself up for its most successful year after selling a record number of rooms in the first half of FY18.
Releasing its half-year results, the Surfers Paradise-based company reported first-half revenue of $366.2 million, an increase of $10.1 million, or 2.8 per cent, due to continued growth in domestic and international travel and record RevPAR (revenue per available room).
The group sold 1.97 million rooms in the first half of the financial year, which is the highest for the period, after increasing the number of rooms on its books by 2.6 per cent. While revenue was up, the acquisition spree hit the bottom line, with earnings before interest, tax, depreciation, amortisation and impairment down 3.6 per cent to $56.6 million.
Mantra had transaction costs of $700,000 for the Art Series Hotel Group acquisition and spent another $2 million on the proposed sellout to AccorHotels.
Net profit was also down on the same time last year, dropping 17.7 per cent to $25.1 million, when transaction costs were taken into account.
Mantra will not pay a dividend for the half, citing the proposed sale of the company to AccorHotels, which would see shareholders paid a special dividend of up to 23.5c a share.
The transaction is expected to settle in the final quarter of FY18, subject to regulatory and shareholder approval.
CEO Bob East said the results broke records in revenue, rooms sold and RevPAR.
“This result was driven by a number of factors including the acquisition of 10 new properties, continued growth in domestic and international travel, increased business travel to some CBD locations, an increase in the total number of rooms available across the group’s resorts and CBD operating segments, as well as improved RevPAR,” he said.
“We are pleased with the performance of the properties that we transitioned into the portfolio. In particular the seven Art Series Hotels have transitioned smoothly and performed ahead of expectations in the short period they have been with the group.”
Mr East said while the group’s results were usually more heavily weighted to the first half of the year, the addition of the Commonwealth Games in the final quarter of FY18 was expected to drive results in the second half.
“Mantra Group is in a good financial position with total assets of $905 million, net assets of $485 million and a strong cash flow,” he said.
New properties expected to open this financial year include Mantra City Road, Melbourne; the redevelopment of the Kings Wharf grain silos in Launceston, named Peppers Silo Hotel; Mantra Albury in NSW; and Mantra at Southport Sharks on the Gold Coast. Additional properties are scheduled in FY20 and beyond.
Mr East said Mantra Group was focused on driving its core business.
“The second half of the financial year is off to a solid start; the Gold Coast 2018 Commonwealth Games will be the biggest event to happen in Australia this decade and the fact that 23 of Mantra Group’s 136 hotels are located on the Coast means Mantra Group is well placed to drive results in 2H18,” Mr East said.
Shares closed 1 per cent lower at $3.84.