Mantra Group (ASX: MTR) has lifted its underlying net profit after tax by 14.2 per cent to $47.2 as six new properties were added to its network during the 2017 financial year to June.
However, Australia's largest listed hotel and resort operator came in below market guidance of between $48.5 million and $52.5 million as its Gold Coast properties were impacted by lower occupancy than forecast because of the Dreamworld tragedy last October in which four people were killed on the Thunder Rapids ride.
Mantra's Gold Coast properties account for around a quarter of its total inventory with more than 5,000 rooms, but CEO Bob East says despite the underperformance in the company's home city, the company had performed to expectations.
RevPAR (revenue per available room) on the Gold Coast rose 2.1 per cent which was below the company's own forecasts.
"During FY2017, the Group performed ahead of the previous corresponding period in revenue, and underlying EBITDAI, NPAT and NPATA," says East.
"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.
"(There was also) a $4.9 million increase in revenue from our central revenue and 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."
Mantra acquired six new properties in FY17 across its three brands which include Peppers, Mantra and BreakFree.
These include the 1,176 room Mantra-branded Ala Moana Hotel in Honolulu Hawaii (pictured), Mantra Residences @ Southport Central, Peppers Kings Square Hotel at Perth, Mantra the Observatory at Port Macquarie, Mantra Club Croc at Airlie Beach and Tribe Perth (Mantra Group is managing Tribe Perth as its first external brand).
Mantra Hotel at Sydney Airport also opened in July 2017 and the recent acquisition of the seven-property Art Series Hotel Group is due to settle in late 2017.
East says portfolio growth is a key strategy heading into FY2018 with key acquisitions planned in Australia and overseas.
"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 says.
"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."
At around 11.20am (AEST), MTR shares were trading down by just under 5 per cent at $2.78.
Business News Australia
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