Jan. 30 (Bloomberg) -- City Lodge Hotels Ltd. closed at a month high after saying first-half profit climbed as much as 32 percent as occupancy levels rose and it bought hotels in Africa.
The stock advanced 1.4 percent to 109.54 rand, the highest daily level since Dec. 24, at the close of trading in Johannesburg. More than 61,000 shares traded, about 96 percent of the daily average.
Headline earnings per share, excluding one-time items, for the six months through December are expected to be 27 percent to 32 percent higher than a year ago, the company said in a statement today. Johannesburg-based City Lodge is expanding in Africa outside South Africa. It bought a 50 percent stake in Fairview Hotels Ltd., which owns two hotels in Nairobi, in June. It also plans to spend 2 billion rand ($221 million) growing operations mainly in East and West Africa, Business Day reported Aug. 16, citing Chief Executive Officer Clifford Ross.
“The company is well-positioned to show profit growth as the cycle normalizes and as they make further investments into Africa,” De Wet Schutte, a Cape Town-based analyst with Avior Research Pty Ltd., said by phone. “Occupancies have been improving nicely. We think they can continue to show profit growth going forward and I think the market has come to realize that as well.”
City Lodge’s 30-day historical volatility, a measure of stock swings, increased to 30.03 from 29.35 yesterday. The FTSE/JSE Africa All Share Index’s 30-day volatility gauge was at 8.59 from 8.53 previously. A higher reading means an asset price can have bigger moves.
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