Hotels group City Lodge has reported diluted headline earnings per share of 524.9 cents for the year ended June, up 27% from 413 cents a year ago.

Revenue was 18% higher at R599.9 million, while operating profit grew 23% to R312.2 million. Net profit grew to R225.6 million from R177.9 million a year earlier.

A final dividend of 194 cents was declared, taking the distribution to shareholders for the full year to 371 cents, 27% higher than the previous financial year's 293 cents.

The group said in a statement that strong demand across its four brands enabled the group to maintain its average annual occupancy at 82% for the year ended June 2008, matching the record achievement of the previous financial year and providing the base for solid rises in revenue, profit and dividends.

The group attributed the 18% rise in revenue to more rooms being sold and higher average room rates.

Occupancy in the second half was marginally lower than in the first half due to the impact of additional capacity as a result of the opening of the 118-room Road Lodge Centurion and the 90-room Road Lodge Richards Bay, combined with the further rooms being added between March and May at City Lodge Johannesburg Airport (59 rooms), City Lodge GrandWest (56 rooms) and Road Lodge Nelspruit (27 rooms).

Looking ahead, the group's founder and non-executive chairman, Hans Enderle, said positive trading conditions have continued into the first six weeks of the new financial year, which will be boosted by full year contributions from additional capacity added in 2007/08.

"Excluding the accounting effects of the recently concluded BEE transaction, satisfactory earnings growth is expected for the year ahead, whilst expansion initiatives should underpin longer-term earnings prospects," he said.

Enderle said construction is well under way on the 90-room Road Lodge Potchefstroom, which is due to open in early November, while construction on the 204-room Town Lodge Port Elizabeth is expected to begin shortly with completion targeted for early 2010.

Regulatory approvals are still being awaited for previously announced Rod Lodges at Southgate (Johannesburg) and Gateway (Umhlanga). Construction on these is likely to begin during the first quarter of the 2009 financial year.

In addition, Enderle said negotiations are at an advanced stage for the development of a 200-room City Lodge in Fourways (Johannesburg), a 200-room City Lodge in Lynnwood (Pretoria) and a 150-room City Lodge in Hatfield (Pretoria). The two Pretoria hotels will be land and building leases.

Construction on all three of these hotels is expected to begin before the end of calendar 2008.

The group currently has 42 hotels offering 4 773 rooms across its four brands Courtyard, City Lodge, Town Lodge and Road Lodge.

"On the successful completion of our current expansion plans, the portfolio will rise to 49 hotels offering 5 855 rooms across South Africa by the start of the Fifa 2010 soccer World Cup," concluded Enderle.

Source: I-Net Bridge