City Lodge expects profit to plunge as conditions weaken
The group says profits for the half year to end-December are likely to halve due to accounting changes and weak business confidence
Hotels group City Lodge warned on Tuesday that its profit for the half year to end-December would fall by about a half due to accounting changes and persistently weak trading conditions.
Amid accounting changes that bring leases on to the balance sheet, normalised headline earnings per share (HEPS) are expected to fall by between 49% and 54%, the company said.
Excluding accounting changes, normalised after-tax profit in SA — the group’s primary market — is expected to fall by between 12% and 17%.
The group had also reported a fall in profit for its year to end-June, citing weak consumer and business confidence, reduced government spending on travel, high unemployment and uncertainty regarding Eskom.
In morning trade, City Lodge’s share price was 2.03% weaker at R70, putting it on track for its worst one-day performance in about six weeks.