Hotel group City Lodge is back in the black, according to its interim results to end-December, after three years of interim losses.
Its half-year results show its headline earnings will rise as much as four times, after the company struggled during lockdown when local and international travel slowed to a halt.
The company said in a trading statement on Monday that interim headline earnings per share (Heps) will spike 371%-402% to 16c-17.8c.
This comes after the loss of 5.9c for the interim period to December 2021 and a loss of 62.5c in the matching six months in 2020, when international travel had stopped and business travel was mostly prohibited.
The company earns about two-thirds of its revenue from local travel, and is heavily tilted towards the business sector. Almost half of its hotels are in Gauteng.
With the rise of virtual meetings during the pandemic, it was not clear if business travel would resume to levels seen before 2019.
Unlike its competitors, City Lodge owns most of its hotels, which gives it an intrinsic value. It has been pushing promotions aimed at the domestic market to attract more leisure travellers.
The company sold its unprofitable east African hotels last year.
Heps, excluding the one-off settlement received for its Covid-19 business interruption claims, will be 12.6c-14.5c, representing an increase of 314%-345%.
The share price was 2.83% lower at R4.81 at the close, suggesting shareholders expected a better result. It has dropped 5.31% in the year to date, but is up just more than 12% in the past six months.
City Lodge was forced to go to the market in a rights issue in August 2020 to raise R1.2bn as it ran up losses during lockdowns.
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