Redcape Hotel Group has delivered a strong first half performance to the financial year with revenue, profits and distributable earnings all increasing.
The group reported like-for-like revenue up 6.2 per cent on the prior corresponding period (PCP), with total revenue up 12.7 per cent to $160.6m. Gross profit increased 14 per cent to $85.7m, with operating EBITDA of $38.7m, up 19.8 per cent. Additionally the group reported distributable earnings per security of 4.78 cents, up 10.9 per cent on the PCP.
Speaking about the result, Redcape CEO, Dan Brady, said: “We are pleased to report a strong first half operating performance. This reflects our focus on top line growth by investing in our people and facilities, while maintaining good cost discipline
“We delivered a 10.9 per cent increase in distributable earnings per security and distribution of 4.41 cps, representing an annualised yield of 7.81 per cent. This highlights the strength of our hotel portfolio, sustainable operating model and targeted investment strategy.
“During the period we continued our strategic focus on growing and optimising our asset base. We added one new venue with good growth potential and divested another at a premium to book value. We also announced that in 2H20 we would divest Royal Hotel Granville, also at a premium to book value, and acquire The Kings Head Tavern. In addition, we invested $6.8 million in growth capex as part of our ongoing refurbishment program.
“With strong cash flow and a capital structure to support growth, we have the funding flexibility to continue to optimise our existing assets and expand our venue footprint, with a view to maximising returns for our security holders.”
Looking ahead Brady added: “Pleasingly, our strong operating performance has continued into the second half. Our focus remains on maximising the value of our existing assets and acquiring venues where we can achieve significant returns through our operational expertise, refurbishment pipeline and insights-driven management platform.”
Redcape said it expects to deliver distributable earnings of 9.2cps or greater with distributions maintained at 8.75cps and its payout ratio less than 100 per cent of distributable earnings.