Ikeja Hotel Plc may be considering a capital raise sometime in the near future. The new management of the company disclosed this yesterday during a Facts Behind The Figure session held at the Nigerian Stock Exchange.
The company recorded a revenue increase of 9.45% from N12.1 billion in 2017 to N13.2 billion in 2018. The earnings before interest and tax rose from N1.4 billion in 2018 to N1.9 billion in 2019 while profit after tax also rose by 83.12% from N603 million in 2017, to N1.1 billion in 2018.
While addressing stockbrokers, the company’s Chief Operating Officer, Theophilus Eniola Netufo, linked the improved performance in profit to effective cost of management and planning which was established by the new management team.
Netufo expressed his optimism that the company’s growth will be retained because measures have been put in place to ensure that statutory obligation will be complied with.
He also stated that Ikeja Hotels made enormous savings in the 2018 financial year, due to prompt payment of all required payments to the federal government and other agencies, improved marketing and cost reduction.
“We have zero tolerance for the default. All our reports are returned at the appropriate time. We don’t wait for any government agency to slam us with fine. In 2018, we did not pay a dime. No penalty. No fine”
Speaking further, the COO disclosed that the firm would be seeking to raise capital to rehabilitate the 1st to 4th floor of the Sheraton Lagos, as well as the public area.
“The 5th and 6th floors were renovated in 2017. That has driven our revenue. The room rate is very high.
“We are looking for money to renovate the 1st, 2nd, 3rd, and 4th floor and the public area. We want to move now. We want to move as quickly as possible because many hotels are coming up, and we don’t want to be caught in the web. We want to position the hotel so we can stay competitive.
“We want to improve our banquet facilities. We see what’s happening in Lagos. (Federal Palace Hotel). We want to replicate the same thing.”
Meanwhile, the company’s General Manager, Barry Curran, also provided some more details on the 2018 operating numbers.
“Our room growth 18/17 was 12%. That’s a big number when you consider we are a mature business. Our food and beverage growth year on year was 11%. We had about 10%/11% growth in our topline growth for the year (2018).
“Our compset (competitive set) includes all of the big hotels on the island and mainland. There are 7 hotels in our compset we measure ourselves against. We are one of the biggest hotels, with 340 rooms. We did 58.4% occupancy over 12 months (in 2018). The average within our in compset was 51.5%.
“Even occupancy itself is not the best measure. We use a metric called Revpa (Revenue per available room). Our revpa for the entire year grew by 30.2%. While our compset went –0.8%. The average length of stay in our hotel is 3.5 nights.”
In response to a question from Nairametrics about whether the firm would take up an additional stake in Federal Palace Hotel (since Sun International is in the process of divesting), the company’s COO said that would be a board decision.
Other members of the company’s board that attended the event are- the Non-Executive Director, Dr. Alex Thomopulos, General Manager, Barry Curran, and the Company Secretary, Mrs. Chisom Umeofia.