• M&C tumbles on dividend cut

Millennium & Copthorne halved its dividend payout to preserve cash after reporting lower than expected profits.

And its subsidiary CDL Hospitality, a Singapore-listed REIT, has had its rating put on negative watch. The twin impacts caused its M&C's share price to sharply drop.

Chairman Kwek Leng Beng said in the results statement: "Moving forward, global financial and credit markets are expected to remain volatile with the continued loss of confidence among investors, lenders and industry players alike."

It was difficult to predict with accuracy how long these conditions would last, he added, noting that airline load factors are still in decline despite the drop in fuel prices. "Leisure and corporate travel are also facing great constraints."

Group revpar in the first five weeks of 2009 declined by 21.2% with New York down 41%, regional US down 23%, Asia down 20% and London down 4%.

The company said that the impact of the global economy can most starkly be seen in Singapore. Full year revpar for its hotels in the territory was a strong 19.5% but growth had been in excess of 30% in the first half and collapsed to being flat in the final quarter.

For the year, pre-tax profits were down 34.5% to £102.8m, mostly due to a revaluation downwards within the 39% owned CDL Hospitality.

The company booked a gain of £31.4m thanks to the deposit paid by the would-be buyer on its Seoul property in the deal that failed to complete.

But this was offset by write-downs of its investments in Beijing and Bangkok hotels. The former was due to oversupply and the latter due to political instability. Also written down were investments in six hotels in the US and UK, land in India and the Sunnyvale redevelopment site in California.

The results, and particularly the dividend cut, were badly received by stock market investors. M&C's share price slumped by 17% on the day, the most since its listing 13 years ago.

Sentiment was not helped by Fitch Ratings switching its outlook on CDL Hospitality's debt to negative from stable on the same day.

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