CDL chairman goes in wake of international shake-up

By Bob Dey

Bruce Davidson, chairman of the CDL hotel and property group in New Zealand for 11 years, lost his job yesterday as a consequence of the group's international restructure.

His place on the boards of CDL Hotels, CDL Investments and Kingsgate International Corporation has been taken by the chief executive of London's Millennium & Copthorne, John Wilson.

The change was announced along with the half-year results for the three companies - down for Hotels, down a little for Investments and up for Kingsgate through the sale of Birkenhead Pt apartments and better sales from the neighbouring shopping centre in Sydney.

None of the companies will pay an interim dividend.

The loss of a local representative at top level on the New Zealand board was made up for in advance last month, when merchant banker and lawyer Lex Henry was appointed managing director of the two CDL companies and to the board of Kingsgate.

Previous operating chiefs had been seconded from Singapore, base of overall parent group Hong Leong.

"It's not surprising and commercially sensible. It will be a bit of a wrench for me," Mr Davidson said of his departure.

He had been asked to stay on the board but said: "It doesn't make a lot of sense when you have a new team. It's better to give the new people a fresh run."

Mr Davidson joined the board of CDL Hotels when it was the beleaguered remnant of Euro-National Corporation, and CDL Investments when it was Kupe Group and part of Bruce Judge's transtasman empire.

In that limbo period after the 1987 crash of both share and property markets, directors of the two companies were looking at handing back remaining cash to the shareholders.

Hong Leong came along in 1992, bought the Quality Inns chain then the commercial arms of Landcorp, and life began again.

But the CDL Hotels result for the June 1999 half-year shows times are still tough in the hospitality industry.

Although strong growth in tourist numbers is forecast, the company said its occupancy level rose only marginally on a national basis and both the average room rate and yield declined, by 6.2 per cent and 4.9 per cent respectively.

The New Zealand hotel operation performed positively in the first quarter, had a bad May and June and fell well short of budget. July was stronger but the company said the rest of the year would be challenging, "particularly in Auckland with the increasing level of inventory available and very fierce competition on rates."

CDL Hotels earned $2.086 million net profit, down 42 per cent, and pretax operating profit fell 27 per cent to $4.8 million.

CDL Investments' net profit fell 5 per cent to $2.16 million on revenue up 6 per cent to $14 million and Kingsgate turned round from a $406,000 loss to a $1.3 million profit.