Ann: FLLYR: MCK: MCK: FY2013 Results Announcement

• Release Date: 14/02/14 15:01
• Summary: FLLYR: MCK: MCK: FY2013 Results Announcement
• Price Sensitive: No
• Download Document  12.11KB

					MCK
14/02/2014 13:01
FLLYR

REL: 1301 HRS Millennium & Copthorne Hotels New Zealand Limited

FLLYR: MCK: MCK: FY2013 Results Announcement

MCK provides its audited financial statements for the period ended 31
December 2013, Chairman's Review and Press Release, the text of which follows
below:

CHAIRMAN'S REVIEW

Financial Performance & Financial Position

Millennium & Copthorne Hotels New Zealand Limited ("MCHNZ") has reported a
profit attributable to owners of the parent of $27.1 million (2012: $46.1
million) for the year ended 31 December 2013.  MCHNZ's revenue and other
income for the year increased to $123.4 million (2012: $116.5 million).  As
in 2012, contributors to the 2013 profit were CDL Investments New Zealand
Limited, its land development subsidiary and First Sponsor Capital Limited,
the Company's associate company which conducts property development in China.

MCHNZ's profit before tax and non-controlling interests was $41.1 million
(2012: $59.6 million). The difference is due to a total of $19.0 million
worth of one-off items which were recognized in 2012 mainly due to the
Canterbury Earthquake. These items included a $18.4 million gain from the
settlement of the material damage insurance claim for Copthorne Hotel
Christchurch Central.

Shareholders' funds excluding non-controlling interests as at 31 December
2013 totalled $466.4 million (2012: $443.3 million) with total assets at
$719.2 million (2012: $686.1 million). Net asset backing (with land and
building revaluations and before distributions) as at 31 December 2013
increased to 133.4 to cents per share (2012: 126.8 cents per share).

New Zealand Hotel Operations

Revenue for the operating hotels increased by 3% to $78.0 million (2012:
$75.8 million) and revenue per available room (REVPAR) increased by 6% over
2012.  Occupancy also increased to 67.7 % in 2013 (2012: 63.6%).  Our hotels
in Auckland, Rotorua and Queenstown performed better than our regional hotels
during the year.

Recent surveys have confirmed that visitor numbers are increasing,
particularly from China and other Asian destinations and we expect current
trends to continue during 2014.  We are also starting to see increased
numbers of North American visitors.

Canterbury Update

--Millennium Hotel Christchurch, a leased property, remains closed for the
foreseeable future.  Discussions between the landlord and the insurers have
continued without resolution to the way forward on repairs to the building.
The rent is current abated.  Once an agreed plan for repairs has been
formulated between the landlord and the insurers, we will be able to update
shareholders and our stakeholders accordingly.

--The demolition of Copthorne Hotel Christchurch Central is virtually
complete and the site has been almost cleared of all debris.  All claims
relating to material damage and business interruption have now been settled
with the Company's insurers. As at time of writing, the acquisition
designation remains on the property pending final determination of
Christchurch Central Development Unit's / Christchurch City Council's plan
for the Town Hall and Arts Precinct.  MCHNZ is optimistic that the
designation will be removed in the near future which will allow MCHNZ to
commence assessment of future planning for the site.

CDL Investments New Zealand Limited ("CDLI")

CDLI announced an increased operating profit after tax for the year ended 31
December 2013 of $13.4 million (2012: $9.3 million) and reported an increase
in its section sales from 123 in 2012 to 202 in 2013 reflecting a positive
market in general.

CDLI increased its ordinary dividend to 2.0 cents per share from 1.7 cents
per share in 2012.  MCHNZ's stake in CDLI is currently 67.25%.

Offshore Operations - Australia & China

In Australia, short term leasing of the units at the Zenith Residences
continued during the year with occupancy of over 90% recorded.  While
marketing of the units is ongoing, no sales were made in 2012.

The Company's 34% associate, First Sponsor Capital Limited (FSCL), reported a
net profit of S$ 29.4 million for the financial year ended 31 December 2013
(2012: US$24.3 million). The Company's share of the profit is NZ $9.8 million
(2012: NZ$10.1 million).

FY2013 marked the completion of the commercial component of the Chengdu
Cityspring project. The entire Chengdu Cityspring project is thus deemed
successfully developed and completed.  The SOHO units that are available for
sale are substantially sold while those currently available for rental are
substantially leased as well.  The first phase of the 196-room M Hotel
Chengdu, which also forms part of the Chengdu Cityspring project, soft opened
on 20 September 2013 and is managed by the M&C group.  Phase two renovation
work of the hotel comprising mainly certain ancillary facilities to the hotel
will be completed in FY2014.  FSCL will continue to evaluate the feasibility
of embarking on phase three of the M Hotel Chengdu development which involves
the conversion of existing bare shell commercial space into additional hotel
rooms and ancillary facilities.

As at 31 December 2013, the Millennium Waterfront project in Chengdu is
proceeding satisfactorily.  Of the 10 blocks comprising 1,618 residential
units launched since 24 November 2012, 1,490 units have been sold either
under option agreements or sale and purchase agreements, with approximately
79.2% of the sales proceeds collected as at 31 December 2013. FSCL has also
commenced the sales of some auxiliary retail commercial units located in our
residential project in June 2013, and sales have been encouraging. In early
January 2014, FSCL made another sales launch of 376 residential units and 223
units have been sold either under option agreements or sale and purchase
agreements as at 26 January 2014.  Further development and sales launches
will be phased according to demand.  FSCL commenced the construction of a
Millennium-branded hotel with convention facilities at Millennium Waterfront
in June 2013, which will be financed by cash flows from residential sales.

FY2013 also marked the successful restructuring of FSCL's real estate
interest in Guangdong Province.  In March 2013, FSCL disposed its entire
equity interest in Fogang Cityspring project at a price of S$17.3 million and
recognised a pre-tax loss of S$0.04 million.  In September 2013, a mixed use
Dongguan Humen development site which was under construction was sold to a
PRC listed developer at a price of S$79.4 million and a pre-tax profit of
S$28.3 million was recognized. In November 2013, FSCL disposed a substantial
part of its remaining property interests in Guangdong Province, including its
entire equity interest in the Lianzhou Cityspring project, and recognized a
net pre-tax profit of S$6.3 million.  FSCL ended FY2013 with property
exposure of less than S$4.8 million consisting of strata titled commercial
units in Dongguan Humen held for rental.  This is the last property asset
exposure remaining since the Cheung Ping Kwong crisis in FY2010.  FSCL will
look into new property development opportunities in Dongguan in FY2014.

FSCL capital call

The Company has received notice from FSCL of a capital call for March 2014.
MCHNZ's share of this latest call is approximately NZ$60 million. MCHNZ
intends to undertake a capital raising in order to meet this call.  Further
details in relation to that capital raising are expected to be announced
later this month.

The additional investment in FSCL will take the form of new preference shares
in FSCL.  MCK intends to  provide its pro rata share of the required capital
in order to maintain its percentage holding of preference shares in FSCL.
After the issue of the new preference shares in FSCL (which is expected to
occur in March 2014), the MCK group should remain at approximately 33.42% of
FSCL.

FSCL requires additional funding for further expansion, in particular the
development of its properties in Chengdu, Sichuan Province, China.

MCK applied for, and has been granted, a waiver from the requirement under
Rule 9.2.1 of the NZSX Listing Rules to obtain the prior approval of MCK
shareholders in relation to the additional investment in FSCL. NZX
Regulation will announce that waiver decision today. The waiver was required
because:

--the MCK group will be providing funding totalling approximately 26% of
MCK's current market capitalisation.  The acquisition will therefore be a
"Material Transaction" under the NZSX Listing Rules; and

--MCK and FSCL are "Related Parties" under the NZSX Listing Rules as MCK,
FSCL and a number of MCK's subsidiaries have some common directors.

Dividend Announcement

The Company has resolved to pay a fully imputed ordinary dividend of 1.2
cents per share (2012: 1.2 cents ordinary and 1.2 cents special dividend per
share).  The dividend will be paid on 16 May 2014.  The record date will be 9
May 2014.

Outlook

With economic indicators pointing to growth over the medium term, the Company
must ensure that it can take full advantage of increased business activity.
The Board and Management expect that 2014 will be a profitable year.

Management and staff

The Board and I would like to thank the Company's management and staff for
their efforts and dedication during 2013.

Wong Hong Ren
Chairman
14 February 2014

PRESS RELEASE

MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND REPORTS 2013 PROFIT

Millennium & Copthorne Hotels New Zealand Limited (NZX: MCK) today reported
its preliminary results for the year ended 31 December 2013 and announced a
profit after tax and non-controlling interests of $27.1 million (2012: $46.1
million) on total revenue and other income of $ 123.4 million (2012: $ 116.5
million).

MCK Managing Director Mr. B K Chiu noted that the fall in profit reflected
the difference between the one-off items recorded in 2012 mainly due to the
Canterbury Earthquake. In 2012, there was a total of $19.0 million of one-off
items which included an $18.4 million gain from the settlement of the
material damage insurance claims with the Company's insurers relating to
Copthorne Hotel Christchurch Central.

"In 2013, we were pleased to see progress in increasing our operating hotels'
revenue and their revenue per available room (REVPAR) performance.  We also
benefited from strong contributions from CDL Investments reflecting increased
sales and confidence in the local property market and we also booked profits
from our investment in China through First Sponsor Capital Limited", he said.

The Group received $13.4 million from its 67% subsidiary CDL Investments New
Zealand Limited which posted an improved profit over its 2012 results. First
Sponsor's contribution to profit was of $9.8 million from sale of land and
recognised profits on completed sales at its residential developments.

MCK announced a fully imputed dividend of 1.2 cents per share (2012: ordinary
dividend of 1.2 cents per share and a special dividend of 1.2 cents per
share). The dividend will be paid to shareholders on 16 May 2014. The record
date will be 9 May 2014.

MCK advised that it had received notice from First Sponsor Capital Limited of
a capital call for March 2014. MCK's share of this latest call is
approximately NZ$60 million and the Company intends to undertake a capital
raising in order to meet this call. Further details in relation to that
capital raising are expected to be announced later this month. MCK intends to
provide its pro rata share of the required capital in order to maintain its
current shareholding in FSCL. MCK's current shareholding in First Sponsor
Capital Limited is approximately 34%.

Looking at the year ahead, Mr. Chiu noted that with New Zealand economic
indicators pointing to growth over the medium term, the Company must ensure
that it can take full advantage of increased business activity.

Summary of results:

--Profit after tax and non-controlling interests $27.1 million (2012: $46.1
m)
--Profit before tax and non-controlling interests $41.1 million (2012: $59.6
m)
--Group revenue and other income $123.4 million (2012: $116.5 m)
--Shareholders' funds excluding non-controlling interests $466.4 million
(2012: $443.3 m)
--Total assets $719.2 million (2012: $686.1 m)

ENDS
Issued by Millennium & Copthorne Hotels New Zealand Limited

Enquiries to:

B K Chiu
Managing Director
(09) 353 5058
End CA:00247023 For:MCK    Type:FLLYR      Time:2014-02-14 13:01:49