(Bloomberg) -- Lux Island Resorts Ltd., Mauritius’ biggest hotel operator by market value, is looking to buy five-star resorts in North Africa and the Middle East in a bid to broaden its portfolio beyond Indian Ocean island nations.
“The rationale is to diversify from the current markets of Mauritius, Maldives and Reunion Island,” Chief Executive Officer Desire Elliah said in an interview. “The objective in the medium term is to add two to three hotels.” he said, and the group already has a few targets in mind.
Lux Island Resorts’ strategy mirrors that of its key shareholder IBL Ltd., which operates businesses beyond its home market of Mauritius. IBL’s recent acquisitions are set to push full-year revenue above $2 billion for the first time.
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Lux Island Resorts’ total income rose 18% to 9.7 billion rupees ($211.4 million) in the year through June, with Mauritius accounting for about two thirds of earnings, financial statements published this week show. It declared a dividend of 2.50 rupees per share, an increase of 25% on the prior year.
“On the back of our strong balance sheet, we are confident that our banks and shareholders will support us,” Elliah said. At 26%, the gearing level — or ratio of debt to equity — is “healthy” and provides Lux Island Resorts with enough “fire power” to seek acquisitions in Morocco, Tunisia and the Middle East, he said.
While investing outside of Mauritius, Lux Island Resorts would prefer to work with local partners that know the jurisdictions well, Elliah said.
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--With assistance from Helen Nyambura and Thomas Hall.
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