The hotels group focused on the Middle East and Australasia, on Friday reported a 12% uplift in gross profit to US$21.9mln on revenue 16% higher at US$32.7mln, driven by the addition of new rooms during the period.
However, its net loss before tax widened to US$13.0mln from a loss of $5.3mln a year ago due to the impact of increased financing costs to develop its hotels pipeline and the impact of depreciation on newly opened hotels.
Property asset values fell by US$11m to $564m since the end of 2017, resulting in a net asset value (NAV) of US$184mln at 30 June 2018 compared to US$202mln at the end of the year.
Action said that current trading was on track and in line with management expectations, despite certain markets in the Middle East facing headwinds impacting the performance of businesses throughout the region. It said the occupancy of its seven mature hotels rose to 73.7% from 72.7% at the same point a year ago.
The hotels group said the current economic and political climate in the Middle East has led to pressure on room rates leading the company to delay the opening of the Mercure Riyadh Hotel which is now expected to open during late 2019 in a prime location of Riyadh in Saudi Arabia.
The company also said it was considering selling some of its land and had received interest which it was considering. It also said it had received an offer for the sale of a hotel in Australia, which it is mulling.
The hotels group is due to be taken private by Action Group Holdings, a group that is backed by existing Action Hotels PLC directors Sheikh Mubarak A M Al-Sabah and Rawaf Bourisli.
In June, an agreement was reached on the terms of a possible cash offer of 24p a share
Interim CEO and CFO Andrew Lindley said the results showed “solid operational performances” were being delivered across its hotel portfolio.
Shares in Action Hotels were 2.8% up at 23.65p in early trade.