Mantra go public at ASX Sydney

Mantra Group Limited has announced its solid results for the half year ended 31 December 2014, with profit up significantly, while also signing new hotels in Tasmania has the company continues to grow.

“I am pleased to report that for the half year ended 31 December 2014, the Group performed strongly in terms of revenue, profitability and cash flow,” said Mantra Group Chief Executive Officer Bob East.

“The Group delivered total revenue of $252.7 million representing a 9.4% increase on H1FY2014.

“This result reflects improved occupancy levels and average room rates as well as a focus by Management on cost control and improved efficiencies in key areas of the business.

“The Group is in a good financial position with total assets of $545 million, net assets of $279 million and a strong cash flow, and is well placed to deliver shareholder value in FY2015,” he said.

The Group achieved period-on-period growth in each of its operating segments:
-CBD delivered revenue of $136.4 million and EBITDAI of $25.1 million representing a period-on-period increase in revenue of $16.2m, $12.1m of which was from new properties. Among other factors, strong conference and corporate demand in Melbourne, Adelaide and Darwin and the G20 in Brisbane drove corporate demand resulting in increased occupancy levels.
-Resorts delivered revenue of $95.1 million and EBITDAI of $15.0 million representing increases on H1FY2014 of 3.6% and 4.9% respectively. This sector benefitted from growth in both domestic and international visitors, with occupancy increasing by 5.4% period on period.
-Central Revenue and Distribution (CRD) delivered revenue of $20.1 million and EBITDAI of $15.8 million representing increases on H1FY2014 of 21.1% and 20.6% respectively. Fees from new properties under management coupled with an increase in online booking volumes through centralised channels contributed to this solid performance.

As indicated at the time of the IPO the Board has approved payment of a fully franked dividend of 5 cents per share for the period to 31 December 2014. Dividends will be paid on 31 March 2015.

Network Growth
Between July and December 2014 Mantra Group added five new hotels to its network – three in Brisbane; one in Canberra and one in Sydney. A dual branded property was added in Melbourne in January 2015. Property Pipeline is strong with two Tasmanian properties and one Christchurch property scheduled to join the Group in April 2015. Further new properties are expected to enter the portfolio over the next 12 months with future new build developments awaiting construction.

Strategy and FY2015 Outlook
East said that Mantra Group is committed to driving growth and delivering shareholder value in FY2015 and beyond.

“We reaffirm our prospectus forecast results for FY2015. Seasonality means approximately over 60% of FY15 EBITDAI and over 64% FY15 NPATA per prospectus has been earned in the period which makes Mantra Group on target to meet its overall prospectus forecast for FY15,” he said.

Based on the Group’s earning capability and strong cash flow position, East said that the Mantra Group is well placed to take advantage of growth opportunities and deliver year-on-year shareholder value.

“We continue to strengthen our platforms and we are taking advantage of leading distribution capabilities and brand appeal. These factors are also aiding our development team as they continue to sign new properties into the portfolio,” he said.

As flagged by East, the Mantra hotel presence in Tasmania is set to increase with the acquisition of two properties – the Hotel Collins in Hobart and the Hotel Charles in Launceston.

The hotels will rebrand as Mantra Collins Hotel Hobart and Mantra Charles Hotel Launceston on 30 April 2015.

The new hotels will increase the number of Mantra Group hotels in Tasmania to six, joining Mantra One Sandy Bay Road in Hobart and the three regional Peppers properties – Peppers Seaport Launceston, Peppers York Cove and Peppers Cradle Mountain Lodge.

Mantra Group negotiated an off-market opportunity to secure the leaseholds from Tasmanian businessman Lyndon Jago, who currently markets the hotels under the Stay Tasmania brand. Mantra Group will now operate the hotels under a lease agreement with owners Sultan Holdings Pty Ltd in Hobart and Joseph Chromy in Launceston.

East said the new hotels were a significant addition to the Mantra portfolio:

“Hobart and Launceston are strong markets and with forecasted domestic leisure visitation growth, future market conditions are favourable for each,” East said..

“Both hotels have an excellent reputation, ranking in the top ten for their respective cities on TripAdvisor, and they are an ideal addition to the Mantra brand with their dual leisure and corporate appeal.”

Hotel Collins was constructed in 2009 and boasts an enviable location in the heart of Hobart‘s waterfront district. Rising from the building’s original 1950’s facade, the modern hotel tower consists of 80 guest rooms and apartments, all stylishly furnished with a contemporary design, with views of Mt Wellington, Queens Domain or the waterfront. A Boardroom is available for small meetings and a 50-seat restaurant is open seven days for breakfast, lunch and dinner.

Hotel Charles opened in July 2010 as part of an iconic Launceston redevelopment. While the interior has been completely rebuilt, the art deco facade of the building has been carefully retained. The hotel has 99 contemporary rooms and an extensive range of facilities including a 60-seat restaurant, conference room for up to 60 delegates, guest lounge, and private dining room and boardroom.

James Wilkinson

Editor-In-Chief, Hotel Management