This article is from the Australian Property Journal archive
OAKS Hotels & Resorts said its aggressive expansion plans during FY08 has weathered the company from the economic and tourism downturn.
Oaks which in August this year was target of a failed takeover bid launched by private equity manager Archer Capital has reported a 67% hike in first quarter earnings before interest tax depreciation and amortisation over the previous corresponding period to $8.28 million.
Oaks managing director Brett Pointon said the company remained on track to meet its fiscal year 2009 guidance EBITDA of $41 million to $44 million and net profit after tax of $16.5 million to $18.7 million.
Under the guidance forecast Oaks is aiming for operational EBITA of between $36 million to $39 million, supplemented by $5 million through the sale of Management Letting Rights.
Pointon said the surge in first quarter profitability was driven by the nine new properties opened by the group in FY08, which had boosted total rooms in its serviced letting pool 24% to 4,267 in the 12 months to June 30.
“Oaks’ strategy of strengthening its market presence over the past two years was paying decided dividends at a time when some regional and tourism focused accommodation markets were suffering a downturn.
“Excluding developing properties, our average occupancy rates across our CBD portfolio rose from 87.96% in the previous corresponding period, to 89.87% in the first quarter of FY 2009.
“A tightening room supply in CBD markets also helped underwrite higher room rates in the FY 2009 first quarter, with our established CBD properties experiencing a 5.2% jump in average rates over the previous corresponding period to $156.42,” he continued.
Oaks regional properties also delivered with average occupancy levels, excluding newly opened properties, increasing slightly to 79.17%, well above the industry wide average occupancy rate of 65.2% across Australia.
Pointon said total rooms as at end of October totalled 5,362 across 34 properties located throughout Australia and New Zealand, and in the United Arab Emirates at Dubai.
Over the next 18 months a further 582 rooms will be added through four new properties in Townsville, Broome, Mackay and Sydney.
“Our investment in MLRs to date has positioned us well to weather the current global economic storm and will allow us to consolidate our position and capitalise on the additional opportunities for growth we are confident will arise in 2009.” he concluded.
Australian Property Journal
