January 19, 2004

By Zobuzwe Ngobese

Durban - Hotel group City Lodge will report an improvement in profit of between 10 percent and 30 percent when it releases its interim results for the six months to December.

This was because of positive trading conditions that led to good occupancy levels, Hans Enderle, the chief executive, said on Friday.

"We have been able to maintain the same level of occupancies as the same period last year, despite the effects which the World Summit on Sustainable Development had in that period," he said.

The occupancies were achieved at better yields and off an expanded base.

"That means we had more rooms sold over the period because of the additional rooms at the V&A Waterfront and we also managed to get a better average rate for the rooms which we sold," Enderle said. 

However, the company said its statement had not been reviewed by auditors and it warned shareholders to exercise caution until the interim results were released next month.

City Lodge's occupancies have been boosted by the festive season, with a huge number of local and international tourists booking rooms at its hotels.

City Lodge reported a 42 percent increase in operating profit to R130.5 million for the year to June 2003, due to strong demand for rooms from business travellers and tourists.

Turnover grew 26 percent to R293 million.

City Lodge shares gained 35c to close at R27.15 on Friday.