Mantra outlines plans to expand as earnings lift

Bob East, right, with Mantra executive Jeremy Nordkamp. Picture: Annette Dew Source: News Corp Australia

Announcing a net profit after tax of $23 million, chief executive Bob East said he expected Mantra to win the management rights for at least 12 hotels and resorts in the next year targeting Australian capital city and regional areas, as well as Bali and New Zealand.

“We have more people wanting us to manage their properties, and I think it’s because we are listed,” Mr East said. “If you look at the Asian owners a lot of them like the fact we are a listed company. I presume it’s because they know the Australian-listed companies have good credibility.”

Mr East said the falling dollar was helping Mantra fill its hotels and resorts. “It helps us in two ways. It makes Australians consider more domestic holidays but it also makes us more affordable for the inbound Asian markets,” he said.

Mantra’s total revenues increased 9.4 per cent to $252.7m while earnings before interest, tax, depreciation, amortisation and impairment (EBITDAI) was up 17.5 per cent at $42.2m.

After listing in June last year, market capitalisation has reached $808m, with the group operating 117 hotels and resorts under brands including Peppers, Mantra and BreakFree.

Mr East said Mantra was happy to take an equity stake in new projects and was carrying about $100m worth of hotels on the balance sheet.

He looked at buying Sheraton Noosa with a partner last year, but was knocked out by the Karedis and Laundy families, which bought the ageing 176-room resort for $110m.

Of the capital cities, Mantra’s properties in Melbourne performed best for the company, followed by those in Sydney.

“Perth’s hotel performance is up year on year, but it is not back to where it was,” Mr East said. “Brisbane will probably perform better than last year. The weakest market in Australia is Canberra, where we have three properties.”

Mr East blamed a drop in federal government spending for Canberra’s performance.

The half-year results were in keeping with expectations, while the acquisition program was growing at double initial expectations. “I am pleased with the pipeline of new hotels coming in,” Mr East said.

“We are doing one a month at the moment, whereas we had told people it would be six a year.”

A fully franked dividend of 5c per share will be paid to shareholders on March 31.

Source:  The Australian - 28th February 2015