Ann: HALFYR: MCK: MCK: 2013 H1 Results (Chairman&

• Release Date: 31/07/13 13:13
• Summary: HALFYR: MCK: MCK: 2013 H1 Results (Chairman's Review)
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MCK
31/07/2013 11:13
HALFYR

REL: 1113 HRS Millennium & Copthorne Hotels New Zealand Limited

HALFYR: MCK: MCK: 2013 H1 Results (Chairman's Review)

CHAIRMAN'S REVIEW

Financial Performance:

The Directors of Millennium & Copthorne Hotels New Zealand Limited ("MCK")
announced an unaudited profit after tax and non-controlling interests of
$9.02 million for the six month period ended 30 June 2013 (2012: $19.63
million).  Profit before income tax and non-controlling interests was $16.01
million (2012: $25.67 million).

In 2012, First Sponsor Capital Limited (FSCL) made a contribution to
first-half profit of $11.88 million.  That has not been repeated in 2013 as
FSCL has not recognized sales from its development portfolio.  Taking this
into consideration, the 2013 half-year result is satisfactory. The results
reflect increased profits from majority-owned land development subsidiary CDL
Investments New Zealand Limited and also demonstrates consistent cost control
from the New Zealand hotel operations.

Group revenue and other income for the period under review increased from
$57.53 million in 2012 to $60.27 million.  The increase is partly
attributable to increased section sales by CDL investments.  Gross profit for
the period also increased from $28.70 million in 2012 to $31.23 million.

As at 30 June 2013, shareholders' funds excluding non-controlling interests
totaled $450.48 million (2012: $427.74 million) with total assets at $686.74
million (2012: $675.29 million).  Net asset backing (excluding
non-controlling interests) per share as at 30 June 2013 now stands at 129.0
cents per share (2012: 122.5 cps).

Canterbury Update:

Works to repair Millennium Hotel Christchurch have been suspended pending
further discussions between the insurers and the owner.  Further guidance
will be given once these works recommence.  The group has renewed its
insurance for this property in the meantime.

The demolition of Copthorne Hotel Christchurch Central is in progress and is
expected to be completed within a few weeks.  No decision has been made by
the Christchurch Central Development Unit (CCDU) on the land and its use at
time of writing and the Company continues to own the land.  The Company
reiterates its intention to rebuild on the site should the opportunity arise
and dialogue with CCDU continues.

All business interruption insurance claims for the Company's Christchurch
Hotels have been settled and the only claims outstanding relate to the
Millennium Hotel Christchurch.

New Zealand Hotel Operations:

Total revenue for the New Zealand hotel operations (13 owned or leased and
operated hotels excluding 11 franchised properties) for the period under
review was $39.85 million (2012: $38.43 million).  Occupancy for those owned
/ leased hotels for the period increased to 69.0% (2012: 63.3%) across the
Group allowing for the closure of the three Christchurch CBD hotels.

Growth in inbound tourism has come about due to increases from Chinese and
other Asian visitors.  European and North American markets remain flat and
there is also little growth from Australia.

The refurbishment of Kingsgate Hotel Rotorua to a Copthorne Hotel was
completed at the end of 2012 and has delivered improvements to the hotel and
to the Group.

The first stage of a refurbishment of the Kingsgate Hotel Palmerston North to
a Copthorne Hotel is being finalized and work is scheduled to commence in the
second half of this year.

Millennium Hotel Queenstown will also benefit from a room refurbishment in
the second half of 2013.  On completion, the hotel will be well positioned to
attract conference and leisure business as more domestic and international
guests visit Queenstown.

The company's hotels in Wellington have not been damaged in the earthquake in
Wellington on 21 July 2013.  Copthorne Hotel Wellington Oriental Bay, an
owned property, and Kingsgate Hotel Wellington, a franchised property, were
undamaged and have remained open.

CDL Investments New Zealand Limited ('CDLI'):

CDLI announced an unaudited operating profit after tax for the six months
ended 30 June 2013 of $5.73 million, (2012: $3.83 million). Sales from its
Hamilton and Rolleston (Canterbury) subdivisions continue to be strong and
are forecast to continue during the second half of this year.  CDLI expects
to better its 2012 results in 2013.

Offshore investments - Australia and China:

In China, First Sponsor Capital Limited ("FSCL") (a 34.21% associate company)
reported a profit of US$0.49 million for the period to 30 June 2013 (2012:
US$28.17 million).  MCK has recognized $0.20 million as its share of this
profit (2012: $11.88 million profit).

FSCL is in the process of constructing its new mixed development in Chengdu,
Sichuan Province, the Millennium Waterfront Project, and over 80% of the
available units in the first and second stages have now been sold.  FSCL has
now commenced construction on the third stage of residential units and will
also commence construction of a Millennium-branded hotel with convention
facilities in the second half of 2013. Sales from the residential units are
expected to be recognised from 2014.

First Sponsor continues to look for new opportunities in China and advised
its shareholders accordingly.  It has also continued to review its property
portfolios and made divestments of non-core assets.

In Australia, occupancy at the Zenith Residences remains steady at 97%. The
units owned by the Group are leased out on short-term leases.

Outlook:

The Company's various business units have traded consistently during the
first half of 2013 and are expected to continue to perform satisfactorily in
the second half of the year.  The Group's property investment arms and other
business units are expected to report increased profitability due to better
sales. The groups' hotels continue to benefit from its investment into the
growth of Asian tourists.  The Board expects to see these patterns reflected
in the year-end results.

Wong Hong Ren
Chairman
31 July 2013
End CA:00239143 For:MCK    Type:HALFYR     Time:2013-07-31 11:13:14