/Millennium & Copthorne down on Eurozone slow-down – MoneyWeek

Millennium & Copthorne down on Eurozone slow-down – MoneyWeek

ThekeynumberforhotelchainsisRevPARorrevenueperavailableroom。

AllowingforcurrencyeffectsMCsRevPARrose7。

8%comparedtothethirdquarterof2010。

Onalike-for-likebasisheadlineprofitincreased19。

9%to£42。

1monrevenuesof£198。

2m(excludinga£44。

2mlandsaleinMalaysia)。

Sowhythebigdrop?

TheproblemforMilleniumandCopthorneistheEurodebtcrisiswhichishavingachillingeffectonbusinessinEurope。

InhisstatementthecompanyschairmanKwekLengBengacknowledgeswearenoticingmorecautionamongstbusinesscustomers,reflectinganxietyabouteventsaffectingtheEurozone。

JustyesterdaythenewheadoftheEuropeanCentralBank,MarioDraghi,intimatedaEurozonerecessionwasarealpossibility。

Bytheirverynaturehotelchains,especiallyoneslikeMCtargettinggatewaycitiesfeelthefullforceofadownturnaspeoplesimplystoptravelling。

Soinvestorsareplayingitsafeandsellingthestock。

Neverthelessatleastonebroker,EvolutionSecurities,maintainsMCasabuycommenting:

MCreportedagoodQ3justaheadofourforecasts,butcautionedontheoutlook。

Inatougheningscenario,avirtuallydebt-freebalancesheetisagoodplacetobewithgoodfreeholdassetsinSingapore,LondonandNewYork。

Thestockisdown28%sinceitsMarchhigh-pointbuthastickedupinthelastmonth。

BS

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