20 Jul 2017 07:00
PEEL HOTELS PLC
PRELIMINARY ANNOUNCEMENT AND BOARD CHANGE
Derived from audited results for Financial Year Ended 29 January 2017.
HIGHLIGHTS
# Turnover decreased 1.3% to £16,790,320 (2016: £17,011,472)
# EBITDA before exceptional expense decreased 12.5% to £2,250,328 (2016: £2,570,818)
# Operating Profit before exceptional expense down 18.7% to £1,268,734 (2016: £1,559,614)
# Net debt decreased £580,087
# Profit before tax, (including the exceptional expense £170,500 re the Strathdon Hotel) was £575,387 (2016: £993,607)
# Earnings per share basic and diluted 3.1p (2016: 5.7p)
# In light of the benefits that will accrue from the repayment of the Loan Notes and the Director's Loan the Directors recommend that no dividend be paid.
# Keith Benham leaves the Board after 19 years service.
'It is very difficult to forecast the current year's outcome as so much depends on staycation and increased Tourist activity stimulated by the weak pound. However our refinancing with Allied Irish Bank and the repayment of the Director's Loan and Loan Notes will provide significant savings in the costs of finance and the subsequent benefits of improved cash flow and lessening net debt.'
Robert Peel
Chairman
0207 286 6823
Press Enquiries
Peel Hunt Ltd / Capel Irwin
0207 418 8907
Review of the business
RESULTS
The Financial Year ended 29 January 2017 has been a very challenging year for the Group with hotel revenues decreasing by 1.3% to £16,790,320 (2016: £17,011,472). Hotel gross profit before depreciation and Group administration expenses decreased 9.4% to £2,938,211 (2016: £3,244,401). EBITDA before exceptional expense decreased 12.5% to £2,250,328 (2016: £2,570,818).
The Company has also had to bear an exceptional expense of £170,500 to its profit due to a charge for back land rent re the Strathdon Hotel, Nottingham.
Profit before tax, (including the exceptional expense re the Strathdon Hotel) was £575,387 (2016: £993,607).
However, Revpar (accommodation revenue per available room) was maintained with occupancy down 3.2% and average room rate up 3.4%
Administration expenses increased 2.1%. Depreciation and amortisation decreased 2.9%.
FINANCE
As at 29 January 2017 net debt stood at £9,554,769 (2016: £10,134,856) representing loans totalling £9,847,422 (2016: £10,196,846) and an overdraft of £nil (2016: £220,776) less £292,653 (2016: £282,766) cash at bank. Gearing on Shareholders' funds was 39.9% with interest covered 2.1 times. Net debt decreased by £580,087 compared with the previous year.
Subsequent to the Financial Year End the Company has negotiated a new long term financing facility with Allied Irish Bank. The terms of this new facility, which will enable the Company to repay the outstanding Loan Notes and Director's loan, will result in a significant reduction in our financial charges going forward. Savings in the financial year 2018/19 are estimated to be not less than £160,000, providing that interest rates remain unchanged.
CAPITAL EXPENDITURE
£710,701 (2016: £690,900) was spent in the year. We have completed the restructuring of certain bedrooms at the Crown and Mitre in Carlisle. The conference and banqueting facilities have been refurbished at the George Hotel in Wallingford. Bedroom refurbishment continues at the Caledonian in Newcastle.
We continue to invest in our internet access throughout all our Hotels giving our Guests faster connection. This service is absolutely free to our Guests and is a vital component to them having a satisfactory stay with us.
In addition to Capital Expenditure, £661,317 (2016: £671,791) was spent on repairs and renewals which help us ensure that we are constantly and consistently maintaining and improving our product, proof of which is the continuing improvements in ratings of each Hotel assessed by the Automobile Association.
DIRECTORS
Keith Benham, as indicated last year, will retire at the AGM. Keith's contribution to Peel Hotels over the years has been exceptional and he will be greatly missed. We wish him a healthy and happy retirement.
Group Statement of Comprehensive Income
for the year ended 29 January 2017
2017 | 2016 | ||||||
£ | £ | ||||||
Revenue |
| 16,790,320 | 17,011,472 | ||||
Cost of sales | (13,852,109) | (13,767,071) | |||||
Gross profit | 2,938,211 | 3,244,401 | |||||
Administration expenses | (687,883) | (673,583) | |||||
Exceptional expense | (170,500) | - | |||||
Depreciation | (981,594) | (1,011,204) | |||||
Total administration expenses | (1,839,977) | (1,684,787) | |||||
Operating profit | 1,098,234 | 1,559,614 | |||||
Finance expense | (522,847) | (566,007) | |||||
Profit before tax | 575,387 | 993,607 | |||||
Income tax | (140,665) | (195,341) | |||||
Profit and total comprehensive income for the period attributable to owners | 434,722 | 798,266 | |||||
Earnings per share | |||||||
Basic & diluted (pence) | 3.1 | 5.7 | |||||
Group statement of changes in equity
for the years ended 29 January 2017 and 31 January 2016
Year ended 29 January 2017 | Share Capital | Share premium account | Profit and loss account | Total |
£ | £ | £ | £ | |
Balance brought forward at 1 February 2016
| 1,401,213 | 9,743,495 | 12,620,907 | 23,765,615 |
Profit and total comprehensive income for the period | - | - | 434,722 | 434,722 |
Transactions with owners | ||||
Dividend | - | - | (280,242) | (280,242) |
Balance at 29 January 2017 | 1,401,213 | 9,743,495 | 12,775,387 | 23,920,095 |
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Year ended 31 January 2016 | Share Capital | Share premium account | Profit and loss account | Total |
£ | £ | £ | £ | |
Balance brought forward at 2 February 2015 |
1,401,213 |
9,743,495 | 12,032,823 | 23,177,531 |
Profit and total comprehensive income for the period |
- | - | 798,266 | 798,266 |
Transaction with owners | ||||
Dividend | - | - | (210,182) | (210,182) |
Balance at 31 January 2016 | 1,401,213 | 9,743,495 | 12,620,907 | 23,765,615 |
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Group Balance Sheet
at 29 January 2017
2017 | 2016 | ||
£ | £ | ||
Assets | |||
Non-current assets | |||
Property, plant and equipment | 35,502,564 | 35,772,573 | |
Total non-current assets | 35,502,564 | 35,772,573 | |
Current assets | |||
Inventories | 114,034 | 112,585 | |
Trade and other receivables | 1,095,481 | 1,240,178 | |
Cash and cash equivalents | 292,653 | 282,766 | |
Total current assets | 1,502,168 | 1,635,529 | |
Total assets | 37,004,732 | 37,408,102 | |
Equity and liabilities | |||
Equity attributable to owners of the parent | |||
Share capital | 1,401,213 | 1,401,213 | |
Share premium | 9,743,495 | 9,743,495 | |
Retained earnings | 12,775,387 | 12,620,907 | |
Total equity | 23,920,095 | 23,765,615 | |
Liabilities | |||
Non-current | |||
Borrowings | 1,030,000 | 9,490,792 | |
Deferred tax liabilities | 861,330 | 919,308 | |
Non-current liabilities | 1,891,330 | 10,410,100 | |
Current | |||
Trade and other payables | 2,259,437 | 2,159,583 | |
Borrowings | 8,817,422 | 926,830 | |
Current tax liabilities | 116,448 | 145,974 | |
Current Liabilities | 11,193,307 | 3,232,387 | |
Total liabilities and equity | 37,004,732 | 37,408,102 |
Group Cash Flow Statement
for the year ended 29 January 2017
2017 | 2016 | ||
£ | £ | ||
Cash flows from operating activities | |||
Profit for the year | 434,722 | 798,266 | |
Adjustments for: | |||
Financial income | - | - | |
Financial expense | 522,847 | 566,007 | |
Fair value movement on derivative | - | - | |
Income tax | 140,665 | 195,341 | |
Depreciation | 981,594 | 1,011,204 | |
Cash flows before changes in working capital and provisions | 2,079,828 | 2,570,818 | |
UK corporation tax paid | (228,168) | (305,666) | |
Decrease/(increase) in trade and other receivables | 149,237 | (223,368) | |
Increase in trade and other payables | 112,381 | 192,753 | |
(Increase) in inventories | (1,449) | (9,297) | |
Net cash from operating activities | 2,111,829 | 2,225,240 | |
Cash flows from investing activities | |||
Acquisition of property, plant and equipment | (710,701) | (690,900) | |
Net cash outflow from investing activities | (710,701) | (690,900) | |
Cash flows from financing activities | |||
Interest paid | (480,223) | (508,285) | |
Loan repayments | (410,000) | (706,054) | |
Equity dividends paid | (280,242) | (210,182) | |
Net cash outflow from financing activities | (1,170,465) | (1,424,521) | |
Net increase in cash and cash equivalents | 230,663 | 109,819 | |
Cash and cash equivalents at the beginning of the period | 61,990 | (47,829) | |
Cash and cash equivalents at the end of the period | 292,653 | 61,990 | |
For the purposes of the cash flow statement, cash and cash equivalents comprise: | |||
Cash and bank balances | 292,653 | 282,766 | |
Bank overdrafts | - | (220,776) |
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.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 and 435 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 29 January 2017 upon which the auditors' opinion is anticipated to be 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 29 January 2017 was based on the profit attributable to ordinary shareholders of £434,722 (2016: £798,266) and a weighted average number of ordinary shares outstanding of 14,012,123 (2016: 14,012,123). No shares were issued in 2017 or 2016.
Diluted earnings per share
The potentially dilutive options in issue in 2017 and 2016 do not cause a difference between basic and diluted earnings per share.