HOLIDAY FEVER DRIVES MANTRA PROFIT HIGHER

Australia's second-largest accommodation provider has posted a net profit of $24.3 million for the six months to the end of December, up 11.15 per cent from a year earlier.

The result was buoyed by a 21.7 per cent surge in revenue to $307.4 million as Mantra added nine hotels to its property portfolio during the period, all of which benefitted from a rising trend by Australians to holiday at home.

Underlying business growth was reflected in a 26.1 per cent lift in EBITDAI to $53.2 million. Even when stripping out the contribution of acquisitions, that growth remained a robust 11 per cent.

The mantra business grew both its leisure and corporate business, driven by the addition of nine new properties during the period.

Mantra Group CEO Bob East (pictured) notes that the result was marked by confidence in its key CBD locations, where growth in conventions and events helped drive the latest result.

With more acquisitions in the pipeline, the company has upgraded its after-tax net profit to between $41.5 million and $43 million, from $40 million to $42 million previously.

"It's been another period of continued improvement across the group," says East.

"Mantra group has continued to build on its strong foundations and continues to deliver growth in revenue and profitability.

"This has been achieved by the acquisition of nine properties in the six-month period, an increase in domestic and international travellers enjoying Australian holidays and positive business sentiment in key capital cities.

"This result reflects the contribution of the nine new properties acquired during the period, improved occupancy levels and average room rates in most of the regions as well as a focus by management on cost control and improved efficiencies in key areas of the business."

Mantra's portfolio now stands at 126 hotels and resorts, totalling 14,800 rooms, with nine properties located in New Zealand and Indonesia.

CBD hotel revenue rose $21 million to $157.4 million, driven by three new properties. EBITDAI was $27.7 million, up 10.6 per cent as the CBD market benefited from growth in conference and events business.

The CBD hotels also benefitted from higher leisure demand, combined with low airfares, helping occupancy to edge 0.4 per cent higher to 85.9 per cent.

Resorts' revenue surged 32 per cent to $125.3 million, while EBITDAI jumped 44.7 per cent to $21.7 million, with Mantra highlighting growth in Queensland as a key driver.

Four of the company's nine property acquisitions in the December half were located in its home market of the Gold Coast.

In the CBD markets, average room rates crept higher year-on-year to $171.14 from $165.17. Revenue per average room lifted 6 per cent to $136.82.

Resorts saw even stronger growth with the average room rate up 9.2 per cent to $166.63 and revenue per average room climbing 14.3 per cent to $125.53. Occupancy also lifted 4.7 per cent to 75.3 per cent.

Mantra Group ended the period with total assets of $713 million and net assets of $350 million.

The company has added another property to its stable in the current half year with its first Peppers hotel in Melbourne's CBD. A new Mantra hotel will be added to Brisbane in the current half.

East says Mantra has capacity to grow its portfolio further through both borrowings and cashflow.

"We continue to strengthen our platforms and take advantage of leading distribution capabilities and brand appeal," Easy says.

"These factors also benefit our development team as they continue to sign new properties into the portfolio."

Mantra is paying a fully franked interim dividend of 5c a share.