FRASERS Hospitality Trust : ACV 0% (FHT) posted a distribution per stapled security (DPS) of S$0.009316 for the half year ended Sep 30, rising 15.9 per cent from S$0.008041 the previous year.

 

In its results statement on Friday (Nov 4), the stapled group&rsquo s managers said this was due to better gross revenue and net property income (NPI) amid the continued, gradual recovery in the hospitality industry as FHT&rsquo s portfolio saw improved performance across all regions.

 

The H2 FY2022 distribution payment date will be Dec 29.

 

Gross revenue for the half year rose 13.5 per cent to S$51.8 million from S$45.6 million a year earlier, while NPI increased 22.7 per cent year on year to S$37.9 million from S$30.9 million previously.

 

This came as Singapore and Australia recorded a spike in international visitor arrivals over the first nine months of 2022, leading to significant RevPAR (revenue per available room) growth for the stapled group&rsquo s portfolios in both countries.

 

As the UK implemented its &ldquo Living with Covid&rdquo plan from March 2022 following its retreat from the Omicron peak, portfolio occupancy rose by 39.4 percentage points to 78.8 per cent, with RevPAR doubling year on year in H2.

 

While Japan&rsquo s international borders remained largely closed, the managers noted higher gross operating revenue and gross operating profit at ANA Crowne Plaza Kobe, driven by the end of the quasi-state of emergency in March 2022.

 

Upon the reopening of Malaysia&rsquo s borders with lifted travel restrictions since October 2021, FHT&rsquo s managers said Westin Kuala Lumpur saw year-on-year RevPAR growth of over six times in H2, leading to the asset booking a gross operating profit as opposed to a gross operating loss in the same period last year. 

 

As a result of the above, distributable income grew 60.2 per cent to S$19.9 million from S$12.4 million. Distribution to stapled security holders rose 15.9 per cent to S$17.9 million, from S$15.5 million in H2 FY2021.

 

The latest set of results brings FHT&rsquo s DPS for FY2022 to S$0.016355, up 66.4 per cent from its FY2021 DPS of S$0.009831.

 

Gross revenue for the full year was up 12.1 per cent on year to S$95.9 million from S$85.5 million previously, while NPI grew 20.7 per cent to S$69.6 million from S$57.6 million.

 

&ldquo Encouraged&rdquo by the recovery in FHT&rsquo s portfolio performance, the managers&rsquo chief executive Eu Chin Fen intends to remain focused to &ldquo ride on the recovery trajectory and navigate through the uncertainties ahead&rdquo .

 

Challenges arising from recessionary risks, elevated inflation, a persistent labour crunch, increased energy costs and rising interest rates continue to weigh on FHT&rsquo s outlook, she said &ndash and in turn, the recovery of the stapled group&rsquo s top and bottom line.

▪ Proposed privatisation by a wholly-owned subsidiary of FPL, to be implemented by way of a trust scheme of arrangement

▪ Following the completion of its strategic review, the FHT Managers concluded that the Scheme represents the best option for Scheme Stapled Securityholders to unlock immediate value of their investments at a premium to NAV

▪ The Scheme Consideration of S$0.700 in cash per Scheme Stapled Security represents:

&bull a premium of 43.8% and 16.7% over the 12-month VWAP and recent analyst consensus target price respectively and

&bull an implied P/NAV multiple of 1.07x, which exceeds (i) historical averages of FHT&rsquo s trading multiples since IPO (ii) current trading multiples of other listed Singapore hospitality trusts and (iii) precedent S-REIT privatisations