Hotel Grand Central (H18) H2 2023 earnings summary

Executive summary

• FY2023 revenue rose 3.9% to $149.1m; net profit increased to $11.9m from $0.8m, while EPS reached 1.61 cents from 0.11 cents.

• Profit improvement was driven mainly by lower investment-property fair-value and FX losses, plus higher fixed-deposit interest income.

• Financial position remained stable, with $1.56b in assets and nil net gearing; net assets per share were $1.79.

Financial highlights

• Revenue was $149.126m versus $143.510m; hotel operations contributed $137.557m and investment-property rent $11.569m.

• Profit before tax was $24.316m versus $12.999m; net profit was $11.873m versus $0.845m.

• Interest income from fixed deposits rose to $9.906m from $3.755m; FX loss narrowed to $1.335m from $7.110m.

• Investment-property fair-value loss was $9.766m versus $10.330m; hotel-asset revaluation recorded a $20.225m net decrement versus a $102.658m surplus in 2022.

• Operating cash flow was $39.952m versus $43.327m; property, plant and equipment purchases totaled $53.840m versus $35.085m.

Outlook and guidance

• Auckland hotel completion was rescheduled for early June 2024, with soft opening planned for early August, subject to unforeseen circumstances.

• The hotel industry was described as cautiously optimistic about continued recovery in 2024; no numerical earnings guidance was given.

• A first and final one-tier dividend of 2 cents per share for FY2023 was recommended, subject to shareholder approval.