Julius Baumann

Aviation and Tourism Editor

ALTX-listed Queensgate Hotels & Leisure said yesterday earnings and headline earnings a share for the six months to end February would be 420%-440% higher than in the previous comparable period.

Queensgate CEO Andrew Hubbard said the rise in earnings was largely attributable to the acquisition of Queensgate Business Development (QBD) in December.

QBD provides a turnkey solution to investors wishing to convert their property for use in the hospitality industry and in most cases the property is taken up by a Queensgate hotel.

“The transaction was backdated to September 1 so the full effect of QBD will be reflected in the interim results,” Hubbard said, pointing out that all Queensgate’s hotels to date had come through QBD.

Queensgate has slowly been crystallising its business model since it reverse-listed into Cyberhost in September when its hotel and restaurant business was added to Cyberhost’s reservation system.

The next step was to bring QBD into the Queensgate stable.

“Both groups had the same controlling shareholder and therefore it made sense to bring QBD into Queensgate.”

In a further step to streamline the business, Hubbard said the group had signed a heads of agreement with an international hotel brand which would be used by all its mid market hotels.

It expects to make an announcement in due course.

In December the group launched its second OneWellness spa facility in the Radisson Hotel Sandton Isle and is developing two new Cape Town properties through QBD.

One is a 164-room, four-star hotel being financed by Redefine Income Fund and the other is an office conversion in the city centre.

In its full-year profit announcement late last year, Queensgate took the bold step of giving detailed financial forecasts for the next two years and is expected to update them later this month.

Queensgate said at the time it expected headline earnings per share of 1,82c and 3,37c for the 12 months to August this year and next year respectively.

Hubbard said the forecast was a way of giving the market, which was still relatively unfamiliar with Queensgate, an indication of what to expect from the group.

Source: Business Day