City Dev

City Dev: Group’s Hotel Operations arm Millennium & Copthorne Hotels (revenue and profit contribution of 46% and 26% respectively for FY12), posted revenues of £169.2m, a decline of 3.6% y/y, due to several factors: - ongoing refurbishment programme at Grand Hyatt Taipei and Millennium Minneapolis; - geo-political tensions affecting South Korea; - harsh weather conditions at EU and US; - Singapore’s increasing labour costs and slowing economy, coupled with increasing supply of hotel rooms; Mgmt also stated that the factors (as stated above) are unlikely to abate in the foreseeable future. RevPAR increased 1.6% to £60.1m due to a 1.7% increase in average room rate, offset slightly by lower occupancies. Consequently, operating profits fell 48.3% to £10.7m, as a refection of the group’s high operating leverage. Net profit fell 29% y/y to £13m. City Dev will be releasing its results on 13 May; There are currently 2 Buys, 8 Holds and 12 Sells on the stock with a 12-month TP of $11.22; Consensus 1Q13 revenue and net profit estimates are $882.5m and $140m respectively.