• Sunday, May 26, 2024
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Transcorp Hotels’ stock surges 1022% in one year

Transcorp Hotels proposes N1.14billion full year dividend payout

The stock price of Trascorp Hotels Plc surged from a mere N6.25 per share in January 2023 to close at N70.18 as at December same year, earning it the best performing stock on the Nigerian Stock Exchange (NGX).

With a price-to-earnings (P/E) ratio of 228.0x and price-to-sales (P/S) ratio of 26.5x, Transcorp Hotels share price growth was significantly higher than the hospitality industry average movement of 4.4 percent and the market average movement of 7.4 percent.

As contained in its financial statement released on Monday, the Group also reported a gross revenue of N41.5 billion, showcasing a substantial growth trajectory that outpaced the previous year’s revenue of N31.4 billion.

Gross profit reached N29.8 billion, signifying a 37% upturn from the N21.7 billion generated in the previous fiscal year.

At N9.5 billion, profit before tax showed a 105% rise from the N4.6 billion in 2022. Demonstrating a commitment to financial prudence, a net profit margin of 15% was attained, indicating a 6 basis points improvement from the corresponding figure in 2022. Consequently, the company declared a total dividend of N2.05 billion which translates to 20 kobo per ordinary share held.

The hotel reported this impressive result despite persisting inflationary pressures, heightened economic insecurity and the substantial costs associated with operations in the country.

Emmanuel Nnorom, Chairman, Transcorp Hotels who spoke at the Company’s 10th Annual General Meeting (AGM) on Monday in Abuja said a key driver of the financial success has been an unwavering commitment to strategic financial management, in addition to the company’s growing fundamentals, including effective management and innovations.

“Despite the challenges posed by the prevailing economic climate, our meticulous financial planning and execution proved to be instrumental in mitigating the impact of external factors on our bottom line.

“This commitment is evident in the reduction of our finance costs throughout the year, reflecting our dedication to optimizing operational efficiency and cost effectiveness. Navigating the uncertainties associated with foreign currency (FCY) volatility remained a pivotal focus for Transcorp Hotels Plc in 2023,” Nnorom to the shareholders.

Meanwhile, the hotel is poised to open its Banquet Center, a 5,000 capacity event place said to be costing over N10billion, in August 2024. Located inside the hotel premises, the event centre is designed to be a landmark in Abuja, providing a versatile and sophisticated space for hosting a diverse range of high profile meetings.

Nnorom said looking ahead, Transcorp Hotels remains dedicated to maintaining a resilient financial position, fostering Strategic growth initiatives and fortifying commitment to delivering long-term value to its stakeholders.

According to him, the company will strategically channel significant investments towards fostering innovation, enhancing cost efficiency, and fortifying its market presence as a leading, award winning hospitality brand.

He further announced plans on groundbreaking of the forthcoming Ikoyi Hotel, in addition to the complete the Transcorp Events Centre in Abuja.

“This strategic move is indicative of our proactive stance towards anticipating and meeting the evolving needs of our discerning clientele and remaining a clear leader within the hospitality space in Nigeria.”

In her address, Dupe Olusola, MD/CEO Trascorp Hotels said the achievement was particularly commendable given the challenging economic conditions that impacted the company throughout 2023.

According to her, the implementation of proactive cost efficiency strategies and an unwavering focus on revenue generation played pivotal roles in delivering positive outcomes.

“In addition to the company’s growing fundamentals, including effective management and innovations, a key driver of our financial success has been our unwavering commitment to strategic financial management.”

She said going into 2024, the primary focus revolves around strategic expansion of the

business, positioning it for not only immediate success but sustained and robust growth in the long term, with a significant milestone being the upcoming inauguration of a stateof-the-art event center.

She told the shareholders that the Event Centre is strategically designed to captivate and host an array of occasions, ranging from conferences and concerts to trade fairs, fashion shows, amongst others.

“Its establishment aims to address the prevailing challenge faced by Abuja — the limited availability of large-capacity halls, often compelling organizers to migrate events to other cities withIn and outside the country,” noted award-winning Olusola.

Also, plans are currently on to develop the hotel’s upcoming lkoyi Property, envisioned as a state-of-the-art 5-star hotel, with an inventory of 315 “meticulously” designed rooms and cutting-edge conferencing facilities.

She pledged that the Hotel’s board and management will continuously leverage and maximize the company’s assets, optimize operational efficiency, and embrace aggressive cost-cutting measures to ensure sustained financial resilience.

This holistic approach, she said is firmly anchored in their dedication to four key pillars including: Strategic Financial Management, Customer Growth and Satisfaction, Improving Business Processes & Efficiency, and Building Organizational Capacity, particularly in terms of enhancing human capital across all our diverse business verticals.

“As we navigate the dynamic landscape of the hospitality industry, these strategic initiatives will serve as the guiding principles shaping our success in the year ahead and beyond,” she further stated.