Ikeja Hotel Plc ended its 2025 financial year with strong profit growth as higher hotel occupancy, stronger pricing, and rising interest income boosted both the income statement and cash generation.
The hotel operator posted a profit after tax of N8.30 billion, up from N7.29 billion a year earlier, as revenue expanded by nearly 38 percent to N25.84 billion, driven by higher room bookings, food and beverage sales, and improved conference and leisure activity across its hospitality assets.
Cash from operations rose to N10 billion, bringing the company’s total net cash from operating activities to N9.38 billion, compared with N7.65 billion in 2024, reflecting stronger earnings, tighter working capital management, and reduced pressure from receivables.
Revenue growth outpaced the rise in costs, allowing gross profit to jump to N12.74 billion from N7.57 billion in the prior year. The improvement was largely supported by increased patronage at the Sheraton Lagos Hotel, higher average room rates, and improved utilisation of ancillary services, including restaurants and business facilities.
Cost of sales increased to N13.11 billion from N11.18 billion, reflecting higher food supplies, energy expenses, and staff-related costs associated with expanded operations. However, the pace of revenue growth helped lift gross margins significantly.
Operating profit climbed to N9.94 billion, up from N8.38 billion in 2024, even as administrative and marketing expenses rose in line with expansion activities and inflationary pressures.
Administrative expenses increased to N2.57 billion from N1.80 billion, driven by higher personnel costs, maintenance expenses, and general overheads. Sales and marketing costs also grew to N952.5 million from N712.7 million, reflecting promotional campaigns aimed at driving occupancy and events.
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Other income dropped sharply to N723 million from N3.32 billion the previous year, when the company recorded one-off gains, making core operating performance the main driver of profit growth in 2025.
Finance income rose to 2.62 billion naira from 1.49 billion naira, largely due to higher interest earned on substantial cash placements with banks, following a significant increase in cash balances during the year.
The company reported no finance costs in 2025, compared with N1.33 billion in interest expenses a year earlier, further supporting profit before tax, which rose to N12.56 billion from N8.54 billion.
Income tax expense increased to N4.25 billion, reflecting the higher taxable profit.
Operating cash flow benefited from improved profitability and better working capital discipline. While trade receivables rose by N270.8 million due to higher sales volumes, this was offset by reductions in inventories and other receivables, alongside higher trade payables.
Cash and cash equivalents closed the year at N33.15 billion, up from N22.74 billion, supported by strong operating inflows and interest income, despite higher capital spending and dividend payments.
Total assets increased to N94.88 billion from N83.67 billion, driven mainly by higher cash balances and continued investment in property, plant, and equipment, which rose to N23.00 billion following upgrades and expansion projects.
Capital work in progress also climbed to N721 million, reflecting ongoing development activities.
Equity attributable to shareholders grew to N38.52 billion from N30.59 billion, supported by retained earnings from the year’s profit.
Total liabilities increased modestly to N56.28 billion, largely due to higher current tax payable and trade payables, while deferred income remained elevated, reflecting bookings and customer deposits.
As of December 31, 2025, shares of Ikeja Hotels grew by 165 percent year-to-date. However, the company began the year with a share price of N41.90 but has since lost 14.6 percent of that price valuation, ranking it 146th on the NGX in terms of year-to-date performance. Currently, the company boasts of a market capitalization of N77.4 billion.