Stamford Land Corporate Ltd

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Operations Review

Hotel Operations & Management

The Group’s hotel owning and management segment continued to deliver stable results in the financial year ended 31 March 2018 (“FY2018”). The Group reported an increase in revenue from this segment of 2.7% from the previous financial year which was contributed mainly by an increase in revenue per available room (“RevPar”) of 3.1%. The operating profit shown a growth of 11.6%, which was attributed to higher revenue and lower operating costs.

International visitor arrivals to Australia continued to increase and reached a record high at the end of March 2018 with a year-on-year growth of 7.6%. This upward trend is set to continue in the financial year ending 31 March 2019 (“FY2019”). Demand for hotel rooms in key cities, such as Sydney and Melbourne, is expected to remain strong and this will have a favourable impact of increasing room rates. However, secondary cities such as Brisbane will continue to experience pressure on RevPar as the supply of hotel rooms is expected to increase with new hotels entering into the market.

SYDNEY

Stamford Plaza Sydney Airport ("SPSA")

SPSA reported another year of good results, with improvements in both room and food and beverage (“F&B”) revenue.

SPSA was again awarded the Best Airport Hotel in Australia/Pacific Region at the SKYTRAX World Airport Awards in 2018. This is the fifth consecutive year that SPSA has won this award. As a choice hotel in the competitive Sydney airport precinct, SPSA achieved occupancy of above 90.0% and an improvement in RevPar of 9.8% in FY2018. Room revenue will continue to remain strong as domestic and international visitors continue to fly into Sydney. SPSA has built a strong base business over the years and is in a good position to capture this strong demand.

On the F&B business, our concept restaurant, La Boca Bar and Grill (“La Boca”) delivered stable results as SPSA continued its marketing efforts to promote it as the choice restaurant for Argentinian cuisine in the vicinity.

SPSA has plans to refurbish its lobby and rooms in FY2019 to enhance overall guest experience and strengthen its position as the best airport hotel in Australia.

Sir Stamford at Circular Quay ("SSCQ")

SSCQ delivered stable results in FY2018 with an increase in room revenue due to RevPar growth of 2.4%, offset by a decline in F&B revenue.

SSCQ completed the refurbishment of its reception lobby to create a more intimate and comfortable area for guests at check-in/check-out to enhance their overall experience. Also, SSCQ has converted a common area to a revenue generating conference area to cater to the growing demands for events/ functions. SSCQ has further plans to refurbish its restaurant, the Dining Room, and to create an outdoor dining area to showcase the attractions of its iconic location.

MELBOURNE

Stamford Plaza Melbourne ("SPM")

SPM reported respectable results with improvements in both rooms and F&B revenue in FY2018. The refurbishment which comprised of the construction of 26 additional rooms was completed in September 2016, and the business disruptions caused during the construction was not present in FY2018 which contributed to the increase in revenue. While there was an improvement in occupancy in FY2018, SPM faced challenge in moving room rates in the competitive Melbourne market.

SPM has plans to refurbish its rooms in FY2019 to enhance overall guest experience and to remain competitive in the Melbourne market. Also, SPM is working on the feasibility of converting its restaurant and bar to our concept restaurant, La Boca. If successful, this will be our third La Boca in Australia.

BRISBANE

Stamford Plaza Brisbane ("SPB")

SPB delivered stable results in FY2018 and maintained its position as the top hotel in Brisbane in the highly competitive Brisbane market despite a marginal decline in RevPar of 0.5%. SPB continued to focus on its F&B efforts to maintain its position as a choice venue for events/functions along the Brisbane River precinct. Room supply in Brisbane will continue to grow and with supply over and above demand, this will create pressure on occupancy levels and room rates in FY2019.

SPB has plans to embark on a refurbishment program on its rooms in FY2019 as it strives to maintain its leading position in the competitive Brisbane market.

ADELAIDE

Stamford Plaza Adelaide ("SPA")

SPA delivered stable results in FY2018 with an increase in room revenue due to RevPar growth of 3.1%, offset by a decline in F&B revenue. Despite a marginal increase in revenue, SPA was able to achieve higher operating profit from its costs efficiency management and productivity improvement initiatives implemented to overcome the weak Adelaide market. On the F&B business, La Boca in SPA continued to perform well, with an increase in revenue of 7.2% in FY2018.

SPA completed the makeover of its porte-cochere to blend in with the refurbished lobby and create a welcoming entrance for guests. SPA has plans to refurbish its rooms in FY2019 to further enhance overall guest experience so as to strengthen SPA’s position in the competitive Adelaide market.

Stamford Grand Adelaide ("SGA")

Despite the weak Adelaide market, SGA reported respectable results with improvements in both rooms and F&B revenue in FY2018. SGA was able to achieve RevPar growth of 5.6% in FY2018 which was contributed by improvements in both occupancy and room rates.

SPA has plans to refurbish its rooms in FY2019 to reinforce its position as the only five star hotel in Glenelg.

AUCKLAND

Stamford Plaza Auckland ("SPAK")

SPAK recorded another year of good results, with an increase in revenue of 4.2% in FY2018. With international visitor arrivals continuing to increase in Auckland, SPAK was well-positioned to maintain its position as a choice hotel in Auckland, thus recording a RevPar growth of 6.7%.

PROPERTY DEVELOPMENT

The Group’s property development segment recorded stellar results for FY2018 where revenue increased by S$134.8 million to S$251.0 million, mainly attributed to the settlement of Macquarie Park Village (“MPV”). Despite the tightening of credit environment in Australia, the Group successfully settled 361 remaining units in FY2018, bringing the total number of units settled to 535 as at 31 March 2018. Construction of the last tower was completed in April 2018 and settlement of the remaining units will continue in FY2019 and beyond.

The Group sold two more units at The Stamford Residences (Auckland) and continues its marketing efforts on the sale of the remaining three units.

PROPERTY INVESTMENT

The Group recorded a significant impairment loss of S$12.0 million on Dynons Plaza, owing to the depressed Perth market and the shorter lease term remaining. The Group is monitoring the lease expiry profile of Dynons Plaza and working to replace the single tenanted lease when it expires in 2020.