Mauritius’ Constance Hotels & Resorts gets back in the game after weak 2013
Constance Hotels and Resorts intends to proceed with a rights issue of Rs 1.23 billion at a price of Rs 27.00 per share, in order to repay the bridging facilities which were used to finance the expansion of the business and strengthen the company’s financial structure.(Image: Constance)
After a weak performance last year, Mauritian hospitality major Constance Hotels and Resorts appears to be edging back, as attested by the half-year financial statements declared so far.
Constance Hotels & Resorts saw group revenues going up a whopping 67% to Rs 1.86 billion for the half year to 30 June 2014 from Rs 1.12 billion in the year ago period, while group profit after tax improved significantly to reach Rs 175 million compared to a loss of Rs 88 million a year-ago.
Following the acquisition of Constance Halaveli Resort, Maldives (CHRM) in July 2013 and the improved performance of its hotels, the group generated an appreciable EBITDA, or operating profit, up 138.9% to Rs 614 million against Rs 257 million last year.
Finance costs stood at Rs 193 million against Rs 154 million in the first half of 2013, while the share of loss from associates dipped to Rs 6 million from Rs 35 million a year-ago, as the combined performance of hotels operating in the Seychelles improved compared to 2013.
Given the robust performance recorded for the first semester of 2014, the management of Constance Hotels and Resorts is confident that, providing there is no unexpected deterioration in the market, and given the encouraging forward bookings for next quarter, Constance Hotels will record a vastly improved result for the full year compared to 2013.
Furthermore, following a related party transaction between Belle Mare Holdings and a significant number of shareholders from Hotelest Limited, which is the holding company for Constance Hotels and Resorts, Belle Mare shareholding in Hotelest Ltd would increase to 30.01%.
As a consequence, Belle Mare shall make a mandatory offer to the shareholders of Hotelest Ltd and Constance Hotels and Resorts.
Moreover, to repay the bridging facilities which were used to finance the expansion of the business and strengthen the company’s financial structure, Constance Hotels and Resorts intends to proceed with a rights issue of Rs 1.23 billion at a price of Rs 27.00 per share.
On the expansion front, it may be noted that, since 2009, Constance Hotels and Resorts has rapidly grown its operations through the implementation of its regional development strategy.
This included the opening of three new properties, Constance Halaveli Resort and Constance Moofushi Resort in the Maldives, Constance Ephélia Resort in the Seychelles, and the refurbishment of Constance Le Prince Maurice in Mauritius and of Constance Tsarabanjina in Madagascar.
Subject to shareholder approval, the rights issue to repay bridging facilities used for expansion will take place after completion of Belle Mare’s mandatory offer. The invitation to shareholders to vote on the rights issue is expected to be made at the beginning of October 2014.
Meanwhile, investment firm Belle Mare Holdings has also declared its half-year results, showing a decline in profits by 33% to hit Rs 15.9 million at the end of June 2014 compared to the half-year ended 30 June 2013, pulled down by lower performance from its associates.
The share of results of associated companies showed a loss of Rs 3.12 million for the first six months of the year, compared to a profit of Rs 2.80 million last year.
Furthermore, group turnover showed a marginal dip of 4.5% to Rs 21.7 million for the half year ended 30 June 2014, compared to Rs 22.8 million for the year-ago period.
Moreover, investments stood at Rs 1,635 million compared to Rs 1,409 million at 30 June 2013.
Finally, net cash from operating activities has shown an increase of Rs 1.5 million to Rs 21.7 million for the six months ended June 2014 compared Rs 20.2 million a year-ago.