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Operations Review

Hotel Operations & Management

The Group’s hotel owning and management segment recorded a decrease in revenue of 11.9% and a decrease in operating profit of 18.0% in the financial year ended 31 March 2020 (“FY2020”). The decrease in revenue and operating profit was mainly due to the weaker Australian Dollar and the decline in travellers due to the bushfires in Australia and the COVID-19 global pandemic.

International visitor arrivals to Australia continued to increase in 2019 with a year-on-year growth of 2.4% at the end of 2019, before declining by 28.5% in the first quarter of 2020 as compared to the first quarter of 2019, due to the COVID-19 pandemic. On an overall basis, international visitor arrivals in Australia declined by 5.4% in the year ended 31 March 2020.

The COVID-19 pandemic severely affected the global tourism industry. The severe travel restrictions imposed by many countries impacted almost all sectors, hitting tourism and travel the hardest. Major events and conferences, trade shows and travel plans were cancelled or postponed. Similarly, the financial performance of our hotels was adversely affected with an overall decline in revenue per available room (“RevPar”) of 10.6% in FY2020.

SYDNEY

Stamford Plaza Sydney Airport ("SPSA")

SPSA completed the refurbishment of its lobby in January 2020. It has commenced the refurbishment of its rooms in May 2020, with a target completion by the end of the financial year ending 31 March 2021 (“FY2021”). The completed refurbishment will enhance overall guest experience and strengthen its position as the best airport hotel in Australia.

Sir Stamford at Circular Quay ("SSCQ")

SSCQ is well-positioned to maintain its status as a prestigious boutique hotel with old world charms in Sydney. It relaunched the Highlander Whisky Bar in April 2019 and was awarded the Best Hotel Bar in June 2020.

MELBOURNE

Stamford Plaza Melbourne ("SPM")

SPM has plans to refurbish its rooms in FY2021 to enhance overall guest experience and remain competitive in the Melbourne market. In addition, SPM also has plans to convert its restaurant and bar to our Argentinian concept restaurant, La Boca. This will be our third La Boca in Australia.

BRISBANE

Stamford Plaza Brisbane ("SPB")

SPB completed the refurbishment of its rooms in FY2020, which will enhance overall guest experience and strengthen SPB’s leading position in the competitive Brisbane market.

ADELAIDE

Stamford Plaza Adelaide ("SPA")

With its newly refurbished rooms, SPA was able to deliver stable results whereby it recorded a growth in revenue of 5.5% in the first three quarters of FY2020. The last quarter of FY2020 was impacted by COVID-19 which brought an overall decline in revenue and RevPar in FY2020.

Stamford Grand Adelaide ("SGA")

SGA delivered stable results in the first three quarters of FY2020 and recorded a slight decline in revenue and RevPar only in the last quarter of FY2020. SGA completed the refurbishment of its suites in FY2020 which will reinforce its position as the only five star hotel in Glenelg.

AUCKLAND

Stamford Plaza Auckland ("SPAK")

Despite the challenging trading environment, SPAK achieved consistent results in the first three quarters of FY2020 and recorded a decline in revenue and RevPar only in the last quarter of FY2020.

PROPERTY DEVELOPMENT

The Group’s property development segment recorded a decline in revenue of 91.4% and operating profit of 92.6% due to the decrease in the number of units in Macquarie Park Village (“MPV”) settled during the financial year. The Group settled 8 units in FY2020, compared to 135 units in the last financial year. This brings the number of units in MPV settled to 678 as at 31 March 2020 out of a total of 712 units.

The Group sold the last remaining unit at The Stamford Residences (Auckland) in FY2020.

PROPERTY INVESTMENT

The Group made a further impairment loss of S$19.3 million on Dynons Plaza, owing to the expiry of the long lease to Chevron in April 2020. The Group has plans in place to refurbish and rename Dynons Plaza to Stamford Green which will be repositioned for multi-let tenancies.

To cushion the impact from this near-term loss of recurring income from Dynons Plaza, the Group acquired 8 Finsbury Circus, a freehold property comprising 10 floors of Grade A commercial office units (with ancillary retail units), with a total floor area of over 180,000 sq ft, situated at the City Core of London, in July 2019. This acquisition will position the Group for at least 13 years of multi-let tenancy revenue.

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