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We take a look at the latest trading statement released by City Lodge Hotels for the 6 months ended December 2019. And it does not make for pretty reading for their investors.
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About City Lodge Hotel Group
Through the vision of founder, Swiss-born Hans Enderle, and the financial backing of the Mine Pension Funds, the opening of City Lodge Randburg (now called City Lodge Hotel Bryanston) on 1 August 1985, became the catalyst for what today is South Africa's leading selected services hotel chain. From the start, emphasis was placed on quality accommodation, homely ambience and friendly service - and these are still hallmarks of the group today. After pioneering the quality, selected services hotel concept in South Africa, the group was incorporated in July 1986 and has since substantially grown and diversified its product offering to meet different travellers' needs.
In 1990, the second-tier Town Lodge concept was started and has proved highly popular. On 18 November 1992, the group successfully listed on the Johannesburg Stock Exchange. Then in 1995, the group acquired a 50% interest in the companies associated with the upmarket Courtyard Suite Hotel chain and also opened its first Road Lodge, a concept aimed mainly at budget conscious travellers. In 2015, the outstanding 50% in the Courtyard Joint Venture was acquired from HPF Properties Pty Ltd. On the occasion of the group's 10th anniversary on 1 August 1995, the City Lodge 10th Anniversary Employees Share Trust was launched which enabled all employees to become shareholders.
In 2013, the group acquired a 50% interest in two hotels in Nairobi, Kenya, and it has since taken full ownership of the Fairview Hotel and Town Lodge, Upper Hill, Nairobi. Town Lodge Gaborone in Botswana became the first new hotel developed by the group outside of South Africa. This development was followed by the Town Lodge Windhoek, Namibia, in 2017, the City Lodge Hotel at Two Rivers Mall, in Nairobi Kenya, in early 2018 and the City Lodge Hotel Dar es Salaam, in Tanzania, in late 2018. With 5 Courtyard Hotels (381 suites), 19 City Lodge Hotels (3 382 rooms), 13 Town Lodges (1 650 rooms) 22 Road Lodges (2 059 rooms), and the Fairview Hotel (120 rooms), the City Lodge Hotel Group has over 7500 rooms and suites and ranks amongst the 250 largest hotel chains in the world. Commitment to service excellence from a highly motivated and dedicated staff is a common thread throughout the group's hotels which have developed a loyal clientèle of both business and leisure travellers over more than three decades.
In 1990, the second-tier Town Lodge concept was started and has proved highly popular. On 18 November 1992, the group successfully listed on the Johannesburg Stock Exchange. Then in 1995, the group acquired a 50% interest in the companies associated with the upmarket Courtyard Suite Hotel chain and also opened its first Road Lodge, a concept aimed mainly at budget conscious travellers. In 2015, the outstanding 50% in the Courtyard Joint Venture was acquired from HPF Properties Pty Ltd. On the occasion of the group's 10th anniversary on 1 August 1995, the City Lodge 10th Anniversary Employees Share Trust was launched which enabled all employees to become shareholders.
In 2013, the group acquired a 50% interest in two hotels in Nairobi, Kenya, and it has since taken full ownership of the Fairview Hotel and Town Lodge, Upper Hill, Nairobi. Town Lodge Gaborone in Botswana became the first new hotel developed by the group outside of South Africa. This development was followed by the Town Lodge Windhoek, Namibia, in 2017, the City Lodge Hotel at Two Rivers Mall, in Nairobi Kenya, in early 2018 and the City Lodge Hotel Dar es Salaam, in Tanzania, in late 2018. With 5 Courtyard Hotels (381 suites), 19 City Lodge Hotels (3 382 rooms), 13 Town Lodges (1 650 rooms) 22 Road Lodges (2 059 rooms), and the Fairview Hotel (120 rooms), the City Lodge Hotel Group has over 7500 rooms and suites and ranks amongst the 250 largest hotel chains in the world. Commitment to service excellence from a highly motivated and dedicated staff is a common thread throughout the group's hotels which have developed a loyal clientèle of both business and leisure travellers over more than three decades.
City Lodge Hotel entrance
Todays trading statement release by City Lodge Hotels
Trading statement
In terms of the JSE Limited Listings Requirements, companies are required to publish a trading statement as soon as they are reasonably certain that the financial results for the current reporting period will be more than 20% different than those of the prior comparative period. In this regard, shareholders are advised that, for the six months ended 31 December 2019, the Company expects to report:
• normalised headline earnings of between R83.3 million to R75.1 million, being a decrease of between 49% and 54% compared to normalised headline earnings of R163.3 million for the six months ended 31 December 2018 (“HY2018“);
• normalised diluted headline earnings per share (“EPS“) of between 191.3 cents to 172.6 cents, being a decrease of between 49% and 54% compared to normalised diluted headline EPS of 375.1 cents for HY2018;
• basic EPS of between 136.4 cents to 117.5 cents, being a decrease of between 64% and 69% compared to basic EPS of 378.9 cents reported for HY2018; and
• basic headline EPS of between 136.4 cents to 117.5 cents, being a decrease of between 64% and 69% compared to basic headline EPS of 378.9 cents reported for HY2018;
The decrease is as a result of weaker trading conditions in the Company’s primary and secondary markets as well as the adoption of IFRS 16 Leases in the current reporting period. On a comparable basis, excluding the effects of implementing IFRS 16 and unrealised exchange gains or losses, normalised headline earnings would be between R119.2 million to R111.0 million, being a decrease of between 27% and 32% compared to the normalised headline earnings of R163.3 million for HY2018.
In South Africa, the Company’s primary market, normalised profit after tax, excluding IFRS 16, decreased by between 12% and 17%. Normalised headline earnings and normalised diluted headline EPS comprise headline earnings adjusted for the effects of transactions relating to BEE and those of a non-recurring and/or core nature. They are the responsibility of the directors and have been provided for illustrative purposes only. Because of their nature, normalised headline earnings and normalised diluted headline EPS usually differ from City Lodge’s headline EPS.
Shareholders are advised that the financial information on which this trading statement is based has not been reviewed or reported on by the Company’s auditors. City Lodge’s results for the six months ended 31 December 2019 will be released on SENS on or about 20 February 2020. 4 February 2020 Bryanston
In terms of the JSE Limited Listings Requirements, companies are required to publish a trading statement as soon as they are reasonably certain that the financial results for the current reporting period will be more than 20% different than those of the prior comparative period. In this regard, shareholders are advised that, for the six months ended 31 December 2019, the Company expects to report:
• normalised headline earnings of between R83.3 million to R75.1 million, being a decrease of between 49% and 54% compared to normalised headline earnings of R163.3 million for the six months ended 31 December 2018 (“HY2018“);
• normalised diluted headline earnings per share (“EPS“) of between 191.3 cents to 172.6 cents, being a decrease of between 49% and 54% compared to normalised diluted headline EPS of 375.1 cents for HY2018;
• basic EPS of between 136.4 cents to 117.5 cents, being a decrease of between 64% and 69% compared to basic EPS of 378.9 cents reported for HY2018; and
• basic headline EPS of between 136.4 cents to 117.5 cents, being a decrease of between 64% and 69% compared to basic headline EPS of 378.9 cents reported for HY2018;
The decrease is as a result of weaker trading conditions in the Company’s primary and secondary markets as well as the adoption of IFRS 16 Leases in the current reporting period. On a comparable basis, excluding the effects of implementing IFRS 16 and unrealised exchange gains or losses, normalised headline earnings would be between R119.2 million to R111.0 million, being a decrease of between 27% and 32% compared to the normalised headline earnings of R163.3 million for HY2018.
In South Africa, the Company’s primary market, normalised profit after tax, excluding IFRS 16, decreased by between 12% and 17%. Normalised headline earnings and normalised diluted headline EPS comprise headline earnings adjusted for the effects of transactions relating to BEE and those of a non-recurring and/or core nature. They are the responsibility of the directors and have been provided for illustrative purposes only. Because of their nature, normalised headline earnings and normalised diluted headline EPS usually differ from City Lodge’s headline EPS.
Shareholders are advised that the financial information on which this trading statement is based has not been reviewed or reported on by the Company’s auditors. City Lodge’s results for the six months ended 31 December 2019 will be released on SENS on or about 20 February 2020. 4 February 2020 Bryanston
City Lodge Hotel Group (CLH) share price history
The image below (taken from Sharenet) shows the share price performance of City Lodge Hotels over the last 5 years. And as the image shows the group's share price has been in almost constant decline over the last 5 years.
The summary below shows the share price performance of City Lodge Hotel Group (CLH) over various time periods:
The numbers above is the last thing City Lodge investors would want to see. And to make matters worse the stock is down by -7.5% following the release of their latest trading statement. So continued suffering is to be expected by City Lodge stockholders. The weak South African economy and subdued tourism numbers (due to crime, loadshedding etc) is not doing City Lodge Hotels any favours.
- 1 week: -0.75
- 1 month: -0.13%
- Year to Date (YTD): -0.13%
- 1 year: -41.91%
- 3 years: -50.72%
- 5 years: -45.87%
The numbers above is the last thing City Lodge investors would want to see. And to make matters worse the stock is down by -7.5% following the release of their latest trading statement. So continued suffering is to be expected by City Lodge stockholders. The weak South African economy and subdued tourism numbers (due to crime, loadshedding etc) is not doing City Lodge Hotels any favours.