Dalata Hotel Gp Regulatory News (DAL)

Year End Trading and Development Update

Strong Financial Position to Support Business Recovery and Growth

ISE: DHG              LSE: DAL

Dublin, 17 December 2020 | Dalata Hotel Group plc ("Dalata" or the "Group"), the largest hotel operator in Ireland, with a growing presence in the United Kingdom, is pleased to announce that despite the challenging environment, EBITDA for the year ending 31 December 2020 is expected to be marginally ahead of market expectations and the Group remains in a strong financial position with current cash and undrawn debt facilities of €293 million after deducting upcoming payments including quarterly rent and interest.

Trading update

Trading in the second half of 2020 was continually disrupted as a result of Covid-19 restrictions across the regions in which the Group operates.

Post the initial lockdown in Ireland and the UK, hotels reopened to the general public in June and July with hotels in Regional Ireland and Regional UK benefiting from strong staycation demand during the summer months. As expected, our Dublin and London hotels were quieter because a higher proportion of their business is ordinarily driven by international travel and events. Occupancy in Q3 amounted to 26% in Dublin, 60% in Regional Ireland and 36% in the UK.

Following an increase in Covid-19 cases, the Irish government implemented the highest level of restrictions, necessitating the closure of hotels to the general public from 22 October for a period of six weeks. The UK government implemented similar restrictions for the month of November. However, most manufacturing and construction services remained open for business compared to the previous lockdown in Q2, generating some limited demand for hotel rooms.

Since the start of December there has been a significant reduction of restrictions in Ireland. Our hotels in the UK are subject to varying levels of restrictions. During December, bookings have been encouraging but are on short lead times. Occupancy for Q4 is currently projected to be 17% in Dublin, 28% in Regional Ireland and 21% in the UK.

EBITDA for the full year is expected to be marginally ahead of market expectations as the Group continues to place a strong focus on cost control and to avail of Government support schemes.

The decision to keep our hotel management teams intact ensured we could respond proactively to the fast moving situation caused by the pandemic. We kept in contact with our key customers and secured new domestic customers in our local markets. The safety of our people and our customers continues to be at the forefront of our minds and our health and safety protocols continue to be accredited by Bureau Veritas, a world leader in testing inspection and certification.

The Group has significant financial headroom to support the business through the on-going recovery and continue on our path of growth and development with current cash and undrawn debt facilities of €293 million after deducting upcoming payments including quarterly rent and interest.

Following an amendment to the Group's debt facilities agreement in July, the previous covenants comprising Net Debt to EBITDA and Interest Cover will not be tested again until June 2022, providing the Group with further flexibility.

The outlook for 2021 remains uncertain at present with short lead time on bookings and it is not yet known when international travel will return to more normal levels. However, the Group welcomes the very positive news on vaccines in recent weeks and is optimistic on trading once the vaccines start reducing the impact of Covid-19 on public health.

Development update

The Group continues to progress the development pipeline of almost 3,250 rooms across Ireland and the UK. In Q4 2020, we completed the 44-bedroom extension at Clayton Hotel Birmingham and the Meeting & Events Centre at Clayton Hotel Cardiff Lane in Dublin.

Our current pipeline includes:

Due to uncertainty caused by the Covid-19 pandemic and its impact on supply chains, there is more uncertainty than usual surrounding the opening dates of hotels in the development pipeline.

Dermot Crowley, Deputy CEO - Business Development & Finance, said:

"2020 has been a very challenging year for people and communities across the world. The impact on the hospitality industry has been acute. In Dalata, our people have suffered significant losses of income through temporary layoffs, reduced working hours and salary cuts. However, we remain resilient and united in dealing with the ongoing impact of Covid-19. We note the very positive news surrounding vaccines over the last month and look forward to 2021 with renewed optimism.

Our Central Office and hotel management teams remain in place and are enthusiastically looking forward to rebuilding the business as we go through 2021. We look forward to welcoming those customers who have not been able to visit us this year.

We have an exciting pipeline of hotels to open over the next three years. Despite the devastating impact of Covid-19, we announced three new hotels during 2020 in Dublin, Brighton and Manchester. We are working with developers and site owners around the UK on potential new developments. The positive impact of the recent equity placing on our balance sheet together with the way in which we have met our rental obligations throughout the Pandemic has enhanced our reputation as a strong reliable covenant. We are confident that this will assist us greatly in building our pipeline further in 2021.

We protected our liquidity as a priority over the last nine months through the strong relationships we enjoy with our stakeholders. In April, we completed a sale and leaseback of Clayton Hotel Charlemont in Dublin for €65 million with Deka Immobilien. In July, we increased our debt facilities with our banking club by €39 million, while in September, we raised €94.4 million from our shareholders through a share placing. The strength of our balance sheet, the retention of our teams and the quality of our hotel portfolio will give us a significant advantage as international travel recommences in 2021".

ENDS

About Dalata

Dalata Hotel Group plc was founded in August 2007 and listed as a plc in March 2014. Dalata has a strategy of owning or leasing its hotels and also has a small number of management contracts. The Group's portfolio now consists of 29 owned hotels, 12 leased hotels and three management contracts with a total of 9,255 bedrooms. In addition to this, the Group is currently developing 13 new hotels and has plans to extend three of its existing hotels, adding close to 3,250 bedrooms in total. This will bring the total number of bedrooms in Dalata to over 12,500. For the first six months of 2020, Dalata reported revenue of €80.8 million and a loss after tax of €63.1 million. Dalata is listed on the Main Market of Euronext Dublin (DHG) and the London Stock Exchange (DAL). For further information visit: www.dalatahotelgroup.com.

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