City Lodge Hotels reported revenue of R1.14 billion for the six months ended December 31, 2025, an increase of 12% from R1.02 billion a year earlier, as higher occupancy, improved room rates and stronger food and beverage sales supported growth.
Group occupancy increased 4.2 percentage points to 61.6% from 57.4%, representing the highest level since before the COVID-19 pandemic.
Average room rates increased 4%, while rooms revenue rose 10% to R898.5 million from R815.0 million.
Food and beverage revenue increased 17% to R233.9 million from R200.2 million, benefiting from increased occupancy, refreshed restaurants and new menus. Food and beverage represented 20.5% of total revenue, up from 19.6% a year earlier.
Adjusted EBITDAR increased 16.3% to approximately R371 million, while adjusted EBITDAR margin expanded 1.3 percentage points to 32.5%.
The company said total operating costs increased 9%, below the rate of revenue growth, while operating cost per room sold increased only 3%.
City Lodge continued to benefit from improved business activity across South Africa, including increased government and corporate travel. Gauteng, KwaZulu-Natal and the Eastern Cape led occupancy growth, while Mozambique and Namibia exceeded expectations within the broader Southern African Development Community portfolio.
Profit after tax declined 5% to R114.6 million from R120.4 million, primarily reflecting the effect of unrealized foreign exchange losses.
Adjusted headline earnings, which exclude unrealized foreign currency movements, increased 27% to R139.3 million from R109.5 million. Diluted adjusted headline EPS increased 33.2% to 26.1 cents from 19.6 cents.
Cash generated by operations increased 39% to R347.3 million from R250.5 million.
The stronger cash generation supported continued hotel refurbishment projects, water and electricity resilience initiatives and shareholder returns.
City Lodge repurchased and canceled 36 million shares, representing approximately 6% of its issued shares, at an average price of R4.00 per share and total consideration of R144.9 million.
The company also completed five refurbishment projects during the period, including bedroom upgrades at City Lodge Hotel Johannesburg International Airport, Courtyard Hotel Gqeberha and Courtyard Hotel Sandton.
City Lodge permanently closed the loss-making Courtyard Hotel Arcadia in December 2025 and sold the property for gross consideration of R37.3 million. It also elected not to renew the lease for the loss-making City Lodge Hotel Newtown.
The group plans to expand City Lodge Hotel Waterfall City by another 55 rooms, with construction expected to begin in April or May 2026 and completion targeted for March 2027. City Lodge expects to contribute approximately R21 million of capital to the project.
City Lodge declared an interim dividend of 8 cents per ordinary share, up 33% from 6 cents a year earlier.
