As part of its HotelInvest strategy, the hotel group announced the purchase of 13 properties from Tritax for 89 million euros. It also posts solid results for the first semester of the year and aims to increase its operating results for the year 2014.
Representing 1,194 rooms, the portfolio consists of 12 ibis properties and an ibis budget property, located in the cities of Coventry, Birmingham, Leicester, Plymouth, Sheffield, Liverpool, Manchester and London. The properties have been operated under variable-rent leases by Accor since 2001, and since 2005 for the real estate investor Tritax.
Financed at 100% through debt, the operation will, according to the group, be immediately accretive to Accor's EBIT and reduce off balance sheet debt by about 39 million euros attached to lease commitments. Regarding this purchase and the recent Sale and franchise back of Novotel Stevenage and Novotel Nottingham to Fairview Hotels, John Ozinga, COO of HotelInvest, remarked, "These transactions demonstrate Accor's ability to act swiftly in implementing the strategy announced nine months ago. It's an important step forward in the significant restructuring that we are leading in HotelInvest, fully aligned with our objectives which include creating value by optimising return on capital employed, while strengthening our position as the largest owner of economy and midscale hotels in key European markets."
Solid results on the first semester 2014
The transformation undertaken by the group nine months ago appears to have produced results for the first semester 2014, during which Accor improved its revenues by 2.8% like-for-like to 2,593 million euros. This progress is thanks to robust activity in the majority of the group's key markets (Middle East, Africa, Americas, Central, Northern and Eastern Europe). In France, instead, the market was penalized by the increase in the VAT rate that came into effect January 1, 2014, sluggish demand, and an unfavorable calendar in May and June.
EBIT rose by 17.6% like-for-like to 219 million euros. The operating profit before tax and non-recurring items amounted to 192 million euros on June 30, 2014, versus 146 million euros at the end of the first semester 2013, a 38.6% like-for-like increase. The net profit group share is significantly higher at 60 million euros. On the period, both of Accor's businesses performed well, delivering significant improvements in their operating margins, which rose by 2.8 points for HotelServices, and 1 point for HotelInvest.
In the first six months of the year, Accor opened 12,284 new rooms in 92 hotels, 90% of which are under management contracts and franchise agreements and 69% are outside Europe.
"In the first - half of 2014, our planned reorganisation ensured the Group's transformation is now well underway. The strong results for the period, with an increase in margins, reflect good momentum and the work of highly committed teams to deploy our new strategy. Each business now has the means to respond effectively to its specific challenges. We have significantly increased resources and completed major acquisitions /restructuring for HotelInvest in the first half, followed by the agreement signed with Tritax in the United Kingdom. In the second half we will focus in particular on deploying the Hotel Services strategy built around innovation, digital solutions and brands," declared Sébastien Bazin, Chairman and CEO Accor.
In view of these factors, the Group expects to report full-year EBIT of €575 to €595 million, compared with adjusted 2013 EBIT of €521 million.
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