Hotel group City Lodge on Thursday reported a 22% rise in fully diluted headline earnings per share (Heps) to 413 cents for the year ended June from 337.9 cents a year ago.

A final dividend of 148 cents per share was declared, taking the annual distribution to 293 cents, an increase of 23%.

The group said continued strong accommodation demand from both business and leisure travellers enabled it to record its highest ever annual occupancy of 82%, up from 79% in the previous year.

Revenue for the year rose by 15% to R509.7 million and profit for the period increased by 24% to R177.9 million.

The number of rooms sold during the year increased due to the higher occupancies and additional capacity brought about by the opening of new hotels and extensions to an existing hotel.

Town Lodge George made a full year's contribution, the 106-room Town Lodge Roodepoort opened in January, Road Lodge Germiston was extended by 30 rooms in March, and there was a two-month contribution from the 90-room Road Lodge East London, the group's 40th hotel.

Continued improvement in occupancies at the Courtyard brand together with higher achieved room rates resulted in income from the Courtyard joint venture increasing by 42% to R7.6 million.

Looking ahead to the 2008 financial year, chairman Hans Enderle said the period would be boosted by full contributions from Road Lodge East London, Town Lodge Roodepoort and the extension to Road Lodge Germiston. 

In addition, two new hotels - Road Lodge Richards Bay and Road Lodge Centurion - are currently under construction and expected to open at the beginning of calendar 2008.

"A comprehensive extension programme is underway; a 27-room extension to Courtyard Port Elizabeth is due for completion in October, a 60-room extension to City Lodge Johannesburg Airport should be completed in the first quarter of next year, and a 56-room extension to City Lodge GrandWest will also be finished early in 2008. In addition, Road Lodge Nelspruit will
be extended by 30 rooms," said Enderle.

Looking ahead to further expansion, Enderle said a site has been acquired for a 90-room Road Lodge in Potchefstroom and the construction of a 204-room Town Lodge in Port Elizabeth is anticipated to commence in the first quarter of 2008. Suitable sites to expand the group's four brands are constantly being sought and evaluated around the country.

Total investment in new hotels, extensions of existing hotels and refurbishments will amount to 297 million rand and will result in the group having 44 hotels with 5,071 rooms, representing a capacity increase of 15%.

Enderle noted that the group is well advanced with regard to the introduction of a significant BEE shareholding and anticipates making an announcement before the end of the calendar year.

With occupancies likely to remain at high levels and new capacity coming on stream, Enderle said the group should achieve satisfactory earnings growth in the year ahead.