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Exclusive: Mantra Group’s East on results, growth

Mantra Group Bob East new 2

Mantra Group’s CEO, Bob East, says the company is experiencing “unprecedented enquiries” for new hotels as the organisation posted a solid first half for 2015-16 which saw revenue jump 21.7%.

Speaking exclusively to HM, East said probably the most compelling feature of the results “was the strength of the new hotels into the portfolio”, adding there was a lot more to come on the development front.

“We currently have unprecedented inbound enquiry for us to manage hotels and resorts under our brand,” he told HM.

Nine hotels joined the network during the first half of 2015-16 and one property was added in January 2016.

“We have a new Singapore office that is starting to receive very good leads and we will have more announcements in the near term on our strengthening Asian portfolio,” he said.

On the results front, statutory NPAT was AUD$24.3 million, higher than statutory NPAT for H1FY2015 of AUD$21.8 million, whilst underlying EBITDAI of $53.2 million was up 26.1% on the same period last year.

Peppers Clearwater Resort Christchurch

“It’s been another period of continued improvement across the Group,” East said. “Mantra Group has continued to build on its strong foundations and continues to deliver growth in revenue and profitability.

“This has been achieved by the acquisition of nine properties in the six month period, an increase in domestic and international travellers enjoying Australian holidays and positive business sentiment in key capital cities.

“We are delighted to report that for the half year ended 31 December 2015, the Group performed strongly in terms of revenue, profitability and cash flow and is on track to deliver earnings in line with guidance given in August 2015.

“We are pleased by the performance of the properties we transitioned into the portfolio in the period and with the growth in underlying EBITDAI for the business excluding new properties which grew at 11.0% compared to the prior corresponding period.

“The Group is in a good financial position with total assets of AUD$713 million, net assets of AUD$350 million and a strong cash flow, and is well placed to deliver shareholder value in H2FY2016 and beyond,” he said.

Mantra Sydney Airport SACL Logo_Option 9

East said the Group achieved period-on-period growth in each of its operating segments including:
-CBD delivered revenue of $157.4 million representing a period-on-period increase in revenue of $21.0 million. $6.8 million of the increase in revenue was from three new properties. EBITDAI for the period was $27.7 million. Among other factors, city wide conference and increased corporate demand in Sydney, Melbourne, and Canberra, together with higher leisure demand driven by special events and lower airfares contributed to this result;
-Resorts delivered revenue of $125.3 million and EBITDAI of $21.7 million representing increases on H1FY2015 of 31.8% and 44.7% respectively. As well as the contribution from new properties ($25.4 million revenue and $4.7 million EBITDAI), this sector benefitted principally from strong short term domestic travel demand, particularly in Queensland, as well as an increase in international travellers taking advantage of low cost carriers; and
-Central Revenue and Distribution (CR&D) delivered revenue of $23.1 million and EBITDAI of $16.8 million representing increases on H1FY2015 of 14.9% and 6.3% respectively. The results from this segment were driven by ongoing growth in central reservations and on-line booking channels and the full six month contribution of three properties under management acquired in FY2015.

The Board has approved payment of a fully franked dividend of 5 cents per share for the period to 31 December 2015. Dividends will be paid on 24 March 2016.

Between July and December 2015 Mantra Group added nine new hotels to its network – six in the Resorts segment, of which four are on the Gold Coast – and three to the CBD segment, one in each of Melbourne, Brisbane and Adelaide.

Mantra Group’s first Peppers property in Melbourne’s CBD was added in January 2016, continuing the move of the Peppers brand into key CBD locations.

Development pipeline is strong with Hotel Richmont by Mantra due to open in Brisbane in H2FY2016 and the first three towers in a portfolio of seven permanent rental residential properties scheduled to join the Group in July 2016, subject to customary settlement conditions.


East said that Mantra Group is committed to driving growth and delivering shareholder value in FY2016 and beyond.

“We are delighted to announce that taking into account all new properties added from 1 July 2015 to 18 February 2016, updated guidance for FY2016 EBITDAI is between $88.5 million and $90.5 million, NPAT between $41.5 million and $43.0 million and NPATA between $44.2 million and $45.7 million,” he said.

“This forecast excludes the transaction costs associated with acquisitions completed or to complete in FY2016,” East said.

Based on the Group’s earning capability and strong cash flow position, East said Mantra Group was well placed to continue to take advantage of growth opportunities in its ongoing commitment to deliver year-on-year shareholder value principally through growing the portfolio, delivering quality inventory, optimising distribution channels and capitalising on forecast increases in inbound tourism.

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

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