Mantra Group Limited has announced solid results for FY2017, with the company revealing a significant increase in revenue.
Six properties were added to the network during the year and Mantra Hotel at Sydney Airport opened in July 2017.
Mantra Group Chief Executive Officer, Bob East, said the Group performed strongly in FY2017 and delivered continued growth in revenue and profitability.
“During FY2017, the Group performed ahead of the previous corresponding period in revenue, and underlying EBITDAI, NPAT and NPATA,” he said.
“I’m pleased to report that for the year ended 30 June 2017, Mantra Group achieved earnings in line with market guidance given on 17 February 2017.
“The Group’s revenue increased by $82.9 million, or 13.7%, to $689 million during the year.
“The majority of this improvement was driven by six new property acquisitions during the year and was supported by strong revenue growth from the key markets of Sydney, Melbourne, ACT, and Sunshine Coast, a $4.9 million increase in revenue from our Central Revenue & Distribution segment, improved occupancy levels, higher average room rates, an increase in the total number of rooms available and improved efficiencies in key areas of the business.
“The Group is in a strong financial position with total assets of $806.3 million, an increase of $37.2 million, and a strong operating cash flow,” he said.
East said the recent acquisition of the Art Series Hotel Group, due to settle in late 2017 (subject to customary conditions), has again demonstrated Mantra Group’s ability to identify and secure sizeable assets.
He said this acquisition enhances Mantra Group’s already extensive portfolio with a selection of unique properties in cultural hubs in Australian capital cities, offering guests additional experience options under this unique brand.
Development pipeline remains strong for the Group with Mantra MacArthur Hotel, Canberra and the first two (of three) towers of FV by Peppers, which heralds the arrival of the Peppers brand in Brisbane, due to open in H1FY2018 (subject to customary settlement conditions).
The Group’s new-build Mantra Southport Sharks Hotel on the Gold Coast and Mantra Albury Hotel in the Riverina district of New South Wales are scheduled to join the Group in H2FY2018 (subject to customary settlement conditions).
East said Mantra Group will continue to surge ahead with FY2018 set to see ongoing portfolio growth, characterised by further acquisitions in key Australian and international destinations.
“As at 30 June, the Group has 18 contracted properties in our acquisition pipeline, including the Art Series Hotel Group properties, with our expansion focus predominantly remaining in Australia and New Zealand,” he said.
“The Group’s balance sheet and cash flow remain strong placing the business in a good position to capitalise on new opportunities as they arise.”
East said Mantra Group is well placed to continue to deliver profitable growth and shareholder value in FY2018 and beyond.
“The Group’s strong balance sheet, healthy pipeline of opportunities for future growth and sound business base all provide an excellent platform to deliver value to shareholders,” he said.
“Many markets are also experiencing favourable industry fundamentals, including strong inbound and domestic leisure demand, a growing corporate travel market and low supply growth.
“The Gold Coast region is also expected to significantly benefit from the Gold Coast 2018 Commonwealth Games next year.
“By contrast, we expect the markets that have slowed down in recent years, being Perth, Brisbane and Darwin, to continue to experience difficult trading conditions in FY2018.
“On balance, we expect further growth across the Resorts, CBD and Central Revenue and Distribution segment in FY2018,” East said.
Based on this, Mantra Group said it was well placed to deliver on its six key strategic priorities for FY2018:
·Pipeline: Continue to invest in the development team to ensure they have the resources to pursue opportunities which add shareholder value and prioritise sizeable portfolio assets;
·Blue sky and funding options: Pursue opportunities to invest in asset classes aligned with the Group’s strategy and investigate alternative funding sources to enable further growth;
·Engagement: Increase the use of digital technology to engage guests, refresh employee value proposition to enhance engagement with team members, continue investor relations engagement, implement a ‘virtual interactive display’ enabling owners to view furniture options when considering apartment refurbishment, continue to deliver quality room inventory and F&B facilities, and an ongoing emphasis on owner engagement;
·Distribution and brand: To promote the Group’s three brands to become the favourite in the market through the newly launched Mantra Hotels ‘My Kind of Wonderful’ brand campaign;
·People: Continue team member training and deliver quality service; and
·Efficiency: Continue to review processes and procedures aimed at improved efficiency and cost controls.