Inspiration Hlt Regulatory News (IHC)

16 Nov 2007 14:17

India Hospitality Corp.16 November 2007 For immediate release 16 November 2007 India Hospitality Corp. (IHC) Mid-Year Trading Update New York, NY - November 16, 2007 - India Hospitality Corp. (LSE: IHC, IHC orIndia Hospitality) today announced its mid-year trading update for the six-monthperiod ended September 30, 2007. IHC is continuing the integration of thevarious businesses under its control and the evaluation of potential futureacquisition targets. PERFORMANCE OF EXISTING BUSINESSES SkyGourmet Catering: SkyGourmet Catering ("Sky") provides in-flight meals to domestic airlines inIndia, in particular Jet Airways and Kingfisher Airlines. Sky also has a growinginternational business. Sky experienced rapid growth in meals served for the second quarter of 2007(July-September) compared to the same period last year - Delhi served almostthree times as many meals while Mumbai saw an increase of 41% and Bangalorevolumes grew 89% in the same period. Driving this growth were several factorsincluding the addition of new capacity discussed below. All India volumes for Sky grew 9% in the quarter ended September 2007 over theprevious quarter (April-June 2007) and a strong 67% over the prior year'squarter. Key factors driving the growth in throughput were the acquisition ofadditional Jet Airways business from Delhi in July and the expansion of sectorsservicing Kingfisher and Indian Airlines in Mumbai. In addition, the Juneopening of a much larger kitchen in Delhi marked a key milestone and willprovide the capacity required for the Company's forecasted growth in that city. Sky is now firmly established as a leading player in the air catering industryin India with active relationships with all key domestic airlines and a solidpresence in three major air traffic hubs - Mumbai, Delhi and Bangalore. Thecompany also has a smaller kitchen in the city of Pune. Three new productionfacilities - in Kolkata, Chennai and Hyderabad - are currently under developmentand will expand significantly the network and ability to service both existingand new customers. The airline industry in India is projected to continue itsrapid growth and investments will continue to be required at Sky to expandcapacity ahead of airline requirements. Margins have shown some volatility asfixed costs have increased due to new capacity not yet being fully utilized, andas customers have grown more demanding on service and price. SkyGourmet remains well-positioned in a rapidly growing industry. Mars Restaurants: Mars Restaurants (Mars) operates a portfolio of restaurants in Mumbai, includingthe "Birdys" chain of bakeries, "Not Just Jazz by the Bay" and "Pizzeria andPasta Bar." Mars also operates two Gordon House Hotels - one in Mumbai (owned)and another in Pune (management contract). Performance of Mars was steady for the quarter. The Mumbai hotel performed wellwith ARR's rising 33% over the same quarter in 2006 (from Rs. 3,548 to Rs.4,716). Average occupancy for the quarter was robust and over 80%. In addition,Mars recently signed a management contract to operate a 66 room Gordon HouseHotel in Ghandi Nagar, Bangalore. The hotel is expected to open in April 2009.IHC is pleased with this planned addition as it will secure a footprint in oneof India's key hotel markets. Sales for the Mars restaurants in Mumbai increased 13% over last year, mainlydriven by same-store sales growth of 12%, and by the addition of five new bakeryshops in Mumbai in late 2006 and early 2007. However, the pace of new storeopenings has slowed this year and no new stores were opened in the last quarter,partly as a result of high rental costs in Mumbai and partly as a result ofGroup management time and attention being diverted to the rapidly growingbusiness at SkyGourmet. The new management structure outlined below will ensurethat both restaurants and hotels receive the time, attention and resourcesrequired for future growth. ACQUISTION UPDATE Nirula's - IHC retains an option to buy the Nirula's Group at the end of thecalendar year. Nirula's would bring an exciting and iconic brand to IHC - apioneer of the fast food industry in India which opened its first location in1934. There are currently over 60 Nirula's fast food outlets throughout NorthernIndia, and its presence continues to rapidly expand. Noida Hotel - IHC has completed due diligence on the acquisition of the NoidaHotel from Nirula's and has confirmed its intention to proceed with thispurchase on the originally stated terms. For technical reasons, completion maybe delayed to coincide with the Nirula's transaction. The property is ideallysituated in close proximity to the upcoming Commonwealth Games village. SAJ - Navis Capital has chosen not to pursue the acquisition of SAJ andtherefore IHC will not be exercising its option to acquire SAJ. MANAGEMENT IHC is in the process of building a Group-level organization to complement thestrong management teams in its existing businesses and those it plans toacquire. IHC intends to manage the businesses as three operating units (AirlineCatering, Restaurants and Hotels), each led by a Senior Executive with overallleadership being provided by an IHC Chief Executive Officer. As a result, recruitment is underway to employ additional senior groupmanagement. Executives from Navis Capital and Hayground Cove will also play increasinglyactive roles at the Board level as outlined below, building on their extensiveexperience in these businesses. ADMINISTRATIVE MATTERS Change of Fiscal Year End India Hospitality Corp. intends to change its Financial Year end to beconsistent with that of its operating companies. The current Financial Year willtherefore end on 31st March 2008, and reports and accounts will be preparedaccordingly. Change of Directors As previously announced, Mr. Pawan Munjal, Mr. Manvinder Puri and Mr. RajeevTalwar resigned on 20 July 2007 and were immediately replaced by Mr. RichardFoyston, Mr. Nicholas Bloy and Mr. Bruno Seghin - all the nominees of NavisCapital. On 14 September, Ms. Christa Short resigned and was replaced by Mr. ScottLaPorta. About India Hospitality Corp. IHC was created as a blank-check company to acquire Indian businesses or assets in the hospitality, leisure, tourism, travel and related industries, including but not limited to hotels, resorts, timeshares, serviced apartments and restaurants. In August 2006, IHC raised US $103 million in an IPO and private placement and is listed on AIM, a market operated by London Stock Exchange plc, under the ticker IHC. IHC was sponsored and advised by Hayground Cove Asset Management LLC, a New York-based investment management firm with approximately US $1.9 billion in assets under management as of July 31, 2007. In July 2007, IHC closed on the acquisition from Navis Capital Partners and its Affiliates of India-based Mars Restaurants Private Limited ("Mars"), an emerging hotel and restaurant company, and SkyGourmet Catering Private Limited ("SkyGourmet"), an airline catering company operating out of four locations in India. About Mars and SkyGourmet Since its incorporation in 2000, Mars has diversified into bakery outlets and operating and managing food courts and hotels. SkyGourmet was incorporated in 2002 and is headquartered in Mumbai. SkyGourmet currently provides in-flight catering services to a number of domestic and international airlines, including Jet Airways, Kingfisher Airlines, Air India Express, Indian Airlines, Malaysian Airlines and Air France. It has operations in Mumbai, Bangalore, New Delhi and Pune, and 1,700 employees. Application for admission of shares and warrants to the CREST system On October 30, 2007, IHC announced that de-materialized depositary interestsrepresenting its shares and warrants have been admitted to the CREST system. TheCREST settlement system allows securities to be transferred from one CRESTaccount to another without the need to use share certificates, warrants orwritten instruments of transfer. IHC believes that admission to the CREST systemwill facilitate settlement of its shares and warrants in a more timely andefficient manner and benefit its shareholders. For further information, please contact: Investor Relations Contact: ICR Inc.William Schmitt203-682-8200 Media Contact: Buchanan CommunicationsRichard Darby, Isabel Podda+44 207 466 5000 Nominated Adviser and Broker: Deutsche BankMumtaz Naseem+44 20 7545 8000Deutsche Bank is IHC's nominated adviser and broker for the purposes of the AIM Rules for Companies. Its responsibilities as IHC's nominated adviser and broker under the AIM Rules for Nominated Advisers are owed solely to London Stock Exchange plc and not to IHC, any director of IHC or any other person. No offer or invitation to purchase or subscribe for ordinary shares in or warrants to purchase or subscribe for ordinary shares or warrants of IHC is being made by this announcement. This information is provided by RNS The company news service from the London Stock Exchange END This information is provided by RNS The company news service from the London Stock Exchange