City Lodge Hotels (CLH) H1 2025 earnings summary

Executive summary

• Revenue increased by 2% year-over-year to R1.02 billion for the six months ended 31 December 2024, driven by a 10% rise in average room rates despite a 4 percentage point drop in occupancy to 57%.

• Profit for the period rose 12% to R120.4 million, with diluted EPS up 16% to 21.6c year-over-year.

• Five major hotel refurbishments were completed, with four more in progress; one hotel was closed and is being sold for R68 million.

• The group focused on yield management, cost containment, and property modernisation, investing R408 million over 30 months and planning an additional R200 million.

• Group occupancy declined by 4 percentage points to 57% due to room refurbishments.

Financial highlights

• Revenue: R1.02bn, up 2% from R1.00bn year-over-year.

• Profit for the period: R120m, up 12% from R107m year-over-year.

• Headline earnings per share (undiluted): 21.6c, up 15% year-over-year; diluted EPS up 16% to 21.6c.

• EBITDAR increased to R330.1m (from R312.3m), with an EBITDAR margin of 32.3%.

• Interim dividend declared: 6c per share, unchanged.

Outlook and guidance

• Positive macro-economic outlook for South Africa over the next 12 months, supported by stabilised electricity, interest rate cuts, improved GDP forecasts, and the upcoming G20 summit.

• G20 summit and related events expected to boost hospitality demand.

• January 2025 occupancy at 44.4% (up 2.8 points year-over-year); February 2025 month-to-date at 60.3% (up 3.8 points year-over-year).

• Modernisation programme to complete refurbishments on 21% of the portfolio by year-end.

• Ongoing pursuit of new hotel opportunities in high-growth areas.