AFM Hospitality Reports 2Q Growth

TORONTO, ONTARIO, CANADA— Solid growth beat out a soft economy as AFM Hospitality Corporation, a global hotel franchising and management services company, posted a second consecutive quarter of revenue growth. On the heels of a 22% increase in the first quarter, AFM Hospitality reported revenues rose 16% for the second fiscal quarter ended June 30, 2001 versus the same period in 2000. The company reported a $511,000 improvement in total revenue, to $3.7 million, compared to $3.2 million in Q2 2000 and an 18% improvement in income before other expenses to $574,000 compared to $487,000 in Q2, 2000. Helping drive revenue at AFM was an increase in the number of rooms under franchise and accelerating growth of royalty fee rates as licenses mature. Franchise revenues rose 5% in the second quarter year-over-year, contributing about one-third of the overall revenue increase, the company said. Several more properties are in the pipeline as well for the balance of 2001, noted company executives. Four new franchised hotels, which signed on in the second quarter, have just opened in the Maritimes, and 16 new contracts were executed. Management is targeting more than 37 new signed contracts by years end. Another growth center for AFM is management contracts, which contributed to two-thirds of the revenue increase. At least three new management contracts are expected to come on stream in the third quarter.