5 Jun 2013 07:00
PEEL HOTELS PLC
PRELIMINARY ANNOUNCEMENT
Derived from audited results for Financial Year Ended 3 February 2013.
Highlights
·; Turnover increased 4% to £15,233,026 (2012: £14,647,126)
·; EBITDA increased 9% to £1,698,060 (2012: £1,557,655)
·; Operating Profit up 53% to £560,979 (2012: £365,630)
·; Net debt decreased £477,258
·; Loss before tax of £97,411 (2012: Loss of £227,802)
·; Earnings per share basic and diluted 0.03p (2012: 0.01p)
'The Group achieved a modest improvement in the Financial Year ended 3 February 2013. We have trimmed our overheads and hope to further improve our EBITDA in the current Year. The cost of Finance is coming down, albeit slowly but this will accelerate when the swap falls away in April 2014.'
Robert Peel
Chairman
0207 286 6823
Press Enquiries
Peel Hunt Ltd / Capel Irwin
0207 418 8907
CHAIRMAN'S STATEMENT
RESULTS
The Group achieved a modest improvement in the Financial Year ended 3 February 2013 with hotel revenues increasing by 4% to £15,233,026 (2012: £14,647,126). Hotel gross profit before depreciation and Group administration increased 6.7% to £2,410,311 (2012: £2,258,536). EBITDA increased 9% to £1,698,060 (2012: £1,557,655).
Revpar (accommodation revenue per available room) increased 2.3% with occupancy flat and average room rate up 2.3%.
The pre-tax result before the fair value movement of the swap was a loss of £400,147 (2012: loss £586,375) on the same basis and exclusive of the profit on the disposal of a staff house in Wallingford in the previous year. Current tax has been provided at a rate of 24% which was the prevailing UK corporate tax rate for the period. The total tax credit of £101,563 for the year is a result of differences in tax and accounting treatment and a large reduction in the deferred tax liability of the Group as a result of changes to the prevailing UK corporate tax rate. Earnings per share on a basic and diluted basis were 0.03p (2012: 0.01p)
FINANCE
As at 3 February 2013 net debt stood at £12,366,301 representing loans totalling £12,090,770 and an overdraft of £392,085 less £116,554 cash at bank. Gearing on Shareholders' funds was 56.1% with interest covered 0.6 times. Net debt decreased by £477,258 compared with the previous year.
It is worth pointing out that the Group has decreased its net debt by £2,428,269 over the past three financial years in spite of a challenging trading environment.
Since 24 April 2002 (the date of the loan) we have paid more than £2,750,000 additional interest than might have been the case had we not been forced into taking up the financial derivatives imposed upon us by our Bank (initially a cap and collar and a 'roller coaster' on our loan and latterly the 'roller coaster'). This large sum of money does not include costs in relation to capping fees and the loan of more than £550,000 over the same period. The cost of buying out our swap at the year-end was £503,705 and the Board's view is still that it would make little economic sense. However they continue to monitor the situation closely. Shareholders should note that there will be a substantial decrease in financial costs in 2014/2015 and therefore a positive benefit to the profitability of the Group as the swap falls away on 11 April 2014.
During the year the Group issued £850,000 of unsecured loan notes that bear interest at 7% per annum to Robert Peel and Charles Peel. These loan notes were originally due for repayment in 2013, but subsequent to the year end and the Group's extension to its existing loan facility, the repayment date for these has been extended to December 2017.
CAPITAL EXPENDITURE
£439,308 was spent in the year mainly on the continuing refurbishment of bedrooms at the Midland Hotel, Bradford, the Bull Hotel, Peterborough, the Crown and Mitre Hotel, Carlisle and the Norfolk Royale Hotel in Bournemouth. The Automobile Association product and service percentages for each of our hotels continue to improve which is very encouraging.
In addition to the capital expenditure a further £557,048 (2012: £544,205) was spent on repairs and renewals which ensures that we continue to improve the quality of our product.
SHAREHOLDERS
Regrettably we are still unable to recommend a dividend for the year ended 3 February 2013.
We are always delighted to welcome Shareholders to our Hotels where they can see for themselves the progress we continue to make, whilst enjoying a beneficial discount. The discount for Shareholders is 50% of our rack rate tariff using the special reservations number 0207 266 1100 or e-mail info@peelhotel.com. Shareholders can also keep in touch with progress in the Company and various promotional activities by visiting our website www.peelhotels.co.uk.
STAFF
Norbert Petersen, who has been an Executive Director since 11 September 1998, retired from his full time role at the end of the financial year but we are delighted that he has agreed to remain on the Board as a Non-executive Director.
Nick Parrish was appointed to the Board on 19 October 2012 as the Financial Director. Nick has been employed by Peel Hotels since 1998 and has thoroughly deserved his promotion.
I would like to thank Oliver Round-Turner, General Manager at the George Hotel in Wallingford and Brian Blake, Internal Auditor for the Group, most sincerely for all the hard work and loyalty they have shown the Group. On behalf of all their Colleagues and Shareholders we wish them a happy and healthy Retirement.
The Board would like to take this opportunity of thanking the Management and Staff of Peel Hotels for their contribution to the business of Peel Hotels and for the safety and wellbeing of their Guests.
THE FUTURE
Following the year end the Group agreed to an extension to its existing bank loan facility with the Royal Bank of Scotland (which was due to expire on 1 June 2014). This agreement extended the loan facility (at the same level of borrowings and repayment terms as previously) until 31 August 2017. This extension provides the Group with greater certainty with regard to its financial structure going forward over the next four years.
Sales growth has been flat in the first quarter of the new financial year and energy costs in particular have been substantially more than in the previous year. We have trimmed our overheads and hope to further improve our EBITDA in the current year. The cost of finance is coming down slowly albeit not helped by the increasing margins levied on us by our Bankers.
The positive news is that in financial year 2014/2015 substantial on going savings will be made on the back of the swap falling away. This will dramatically improve our profitability and give us wider options in terms of increasing capital expenditure, accelerating debt repayments and paying dividends to our loyal and long suffering Shareholders.
Robert Peel
Chairman
5 June 2013
Group Statement of Comprehensive Income
for the year ended 3 February 2013
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2012 | 2011 |
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£ | £ |
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Revenue |
| 15,233,026 | 14,647,126 |
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Cost of sales | (12,822,715) | (12,388,590) |
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Gross profit | 2,410,311 | 2,258,536 |
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Administration expenses | (712,251) | (700,881) |
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Depreciation | (1,137,081) | (1,192,025) |
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Operating profit | 560,979 | 365,630 |
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Profit on disposal of property | - | 232,766 |
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Finance income | 318 | 21 |
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Finance expense | (961,444) | (952,026) |
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Fair value movement on derivative | 302,736 | 125,807 |
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(Loss) before tax | (97,411) | (227,802) | ||||||
Income tax | 101,563 | 229,590 |
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Profit and total comprehensive income for the period attributable to owners | 4,152 | 1,788 |
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Earnings per share |
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Basic & diluted (pence) | 0.03 | 0.01 |
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Group statement of changes in equity
for the years ended 3 February 2013
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Year ended 3 February 2013 | Share Capital | Share premium account | Profit and loss account | Total |
£ | £ | £ | £ | |
Balance brought forward at 6 February 2012 | 1,401,213 | 9,743,495 | 10,904,734 | 22,049,442 |
Profit and total comprehensive income for the period | - | - | 4,152 | 4,152 |
Balance at 3 February 2013 | 1,401,213 | 9,743,495 | 10,908,886 | 22,053,594 |
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Year ended 5 February 2012 | Share Capital | Share premium account | Profit and loss account | Total |
£ | £ | £ | £ | |
Balance brought forward at 7 February 2011 |
1,401,213 |
9,743,495 | 10,902,946 | 22,047,654 |
Profit and total comprehensive income for the period |
- | - | 1,788 | 1,788 |
Balance at 5 February 2012 | 1,401,213 | 9,743,495 | 10,904,734 | 22,049,442 |
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Group Balance Sheet
at 3 February 2013
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| 2013 | 2012 |
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| £ | £ |
Assets |
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Non-current assets |
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Property, plant and equipment |
| 37,037,546 | 37,735,319 |
Deferred tax asset |
| 115,852 | 201,610 |
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Total non-current assets |
| 37,153,398 | 37,936,929 |
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Current assets |
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Inventories |
| 99,529 | 102,306 |
Trade and other receivables |
| 1,136,554 | 1,215,163 |
Current tax asset |
| - | 39,537 |
Cash at bank and in hand |
| 116,554 | 42,529 |
Total current assets |
| 1,352,637 | 1,399,535 |
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Total assets |
| 38,506,035 | 39,336,464 |
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Equity and liabilities |
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Equity attributable to owners of the parent |
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Share capital |
| 1,401,213 | 1,401,213 |
Share premium |
| 9,743,495 | 9,743,495 |
Retained earnings |
| 10,908,886 | 10,904,734 |
Total equity |
| 22,053,594 | 22,049,442 |
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Liabilities |
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Non-current |
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Borrowings (due after one year) |
| 9,324,716 | 9,762,605 |
Deferred tax liabilities Derivative financial instruments |
| 1,182,914 71,958 | 1,417,523 483,865 |
Non-current liabilities |
| 10,579,588 | 11,663,993 |
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Current |
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Trade and other payables |
| 2,231,275 | 2,176,970 |
Borrowings (due within one year) |
| 3,158,139 | 3,123,483 |
Current tax liabilities |
| 51,692 | - |
Derivative financial instruments |
| 431,747 | 322,576 |
Current Liabilities |
| 5,872,853 | 5,623,029 |
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Total liabilities and equity |
| 38,506,035 | 39,336,464 |
Group Cash Flow Statement
for the year ended 3February 2013
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| 2013 | 2012 | |
| £ | £ | |
Cash flows from operating activities | |||
Profit for the year | 4,152 | 1,788 | |
Adjustments for: | |||
Financial income | (318) | (21) | |
Financial expense | 961,444 | 952,026 | |
Fair value movement on derivative | (302,736) | (125,807) | |
Income tax income | (101,563) | (229,590) | |
Profit on sale of property | - | (232,766) | |
Depreciation | 1,137,081 | 1,192,025 | |
1,698,060 | 1,557,655 | ||
Operating profit before changes in working capital and provisions | |||
UK corporation tax received/(paid) | 43,941 | (82,331) | |
Decrease in trade and other receivables | 78,609 | 13,770 | |
Increase in trade and other payables | 95,145 | 190,200 | |
Decrease in inventories | 2,777 | 4,482 | |
Net cash from operating activities | 1,918,532 | 1,683,776 | |
Cash flows from investing activities | |||
Acquisition of property, plant and equipment | (439,308) | (568,441) | |
Sale of property, plant and equipment | - | 462,927 | |
Net cash from investing activities | (439,308) | (105,514) | |
Cash flows from financing activities | |||
Interest paid New loan | (1,001,966) 585,000 | (1,004,935) 300,000 | |
Loan repayments | (467,889) | (908,981) | |
Net cash from financing activities | (884,855) | (1,613,916) | |
Net increase/(decrease) in cash and cash equivalents | 594,369 | (35,654) | |
Cash and cash equivalents at the beginning of the period | (869,900) | (834,246) | |
Cash and cash equivalents at the end of the period | (275,531) | (869,900) | |
For the purposes of the cash flow statement, cash and cash equivalents comprise: | |||
Cash and bank balances | 116,554 | 42,529 | |
Bank overdrafts | (392,085) | (912,429) | |
Notes
(forming part of the financial statements)
1 Basis of preparation
The financial statements, from which this preliminary announcement has been extracted, have been prepared and approved by the Directors in accordance with International Financial Reporting Standards as adopted by the EU ("Adopted IFRSs"). The financial statements have been prepared under the historical cost convention, except for derivative financial instruments which are included at their fair value.The IFRS accounting policies have been applied consistently to all periods presented in these financial statements. The financial statements are presented in sterling. 2 Publication of non-statutory financial statements
The financial information set out in this preliminary announcement does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006.The group statement of comprehensive income, the group statement of changes in equity, the group balance sheet and the group cash flow statement have been extracted from the Group's financial statements for the year ended 3 February 2013 upon which the auditors' opinion is unqualified and does not include any statement under section 498(2) or 498(3) of the Companies Act 2006. Those financial statements have not yet been delivered to the Registrar.
3 Earnings per share
Basic earnings per share
The calculation of basic earnings per share at 3 February 2013 was based on the profit attributable to ordinary shareholders of £4,152 (2012: £1,788) and a weighted average number of ordinary shares outstanding of 14,012,123 (2012: 14,012,123). No shares were issued in 2013 or 2012.
Diluted earnings per share
There were no potentially dilutive options in issue in 2013 and 2012 and consequently there is no difference between basic and diluted earnings per share.