Peel Hotels Regulatory News (PHO)

12 Apr 2007 07:00

Peel Hotels PLC12 April 2007 PEEL HOTELS PLC PRELIMINARY ANNOUNCEMENT Derived from the audited results for financial year ended 11 February 2007 PEEL HOTELS PLC HIGHLIGHTS • Turnover up by 6.5% to £15,919,976 (2006 - £14,947,091) • Pre-Tax profits £1,563,120 (2006 - £1,162,973 as restated for the implementation of FRS 20) • Earnings per share Basic 9.8p (2006: 6.9p as restated) Diluted 9.3p (2006: 6.6p as restated) • Dividend increased by 5.3% to 5.0p per share (2006 - 4.75p per share) The Board believes there is considerable scope to improve the overallperformance of the portfolio whilst continuing to pay down debt and maintaininga progressive dividend policy for its shareholders. Press enquiries:- Peel Hotels PlcRobert Peel Tel: 020 7266 1100 KBC Peel Hunt Tel: 0207 418 8900David DaviesNicholas Marren CHAIRMAN'S STATEMENT Results Total turnover grew by 6.5% to £15,919,976. Operating profit was £1,993,833(2006: £2,418,732, as restated for implementation of FRS 20) a decrease of 17.6%with £404,855 of the £424,899 operating profit shortfall occurring in the firsthalf of the year. In line with the strategy to dispose of non-core assets, the sale of thefreehold of Aire House, a building adjacent to the Golden Lion Hotel, wascompleted in December 2006 at the asking price of £2,050,000 and has resulted inan exceptional profit on disposal of £850,000 in the year. This enabled theCompany to accelerate its loan repayments. After taking into account this profit on disposal, the pre-tax result was£1,563,120 (2006:£1,162,973 as restated for the implementation of FRS 20) anincrease of 32.2%. After a full tax provision less discounting, earnings pershare were 9.8p basic and 9.3p on a diluted basis (2006: 6.9p basic and 6.6pdiluted, both as restated). At 11 February 2007, net debt stood at £15,269,183 representing loans totalling£15,041,812 and an overdraft of £385,901 less £158,530 cash at bank. Gearing onshareholders' funds was 102.9% with interest covered 2.2 times. Net debtdecreased by £1,795,604 compared with the previous year. A new loan of £400,000was arranged on 8 August 2006 to fund the redevelopment of the Princes ballroomat the Midland Hotel. Like for like hotel sales increased 1.6% and hotel profits after depreciationand before Company administration costs declined 10.8%. Severe cost pressure, inparticular energy costs, affected the operational gearing of the Company andcontributed to what in the final analysis was a disappointing hotel tradingresult, reflecting the competitive nature of the industry. The Strathdon inNottingham had a very poor year with REVPAR (accommodation revenue per availablebedroom) decreasing by a massive 30.3%. This had a consequential impact on theoverall Company result where REVPAR slipped for the first time in the Company'shistory, by 0.6% in the year with occupancy down by 2.2% and average room rateup by 1.6%. Results from other hotels, were mixed, with excellent results at theGolden Lion in Leeds, the Caledonian in Newcastle and the Crown & Mitre inCarlisle. There were considerable non recurring costs incurred at the Avon GorgeHotel in terms of setting up and launching the new Bridge Cafe which werewritten off to profits. The Strathdon in Nottingham, lost £156,734 and currentlyevery effort is being made to stabilise the position and eliminate the lossesgoing forward. The Company continues to keep our properties well maintained and in good repairand it has achieved Automobile Association quality percentage increases in allbut one of the hotels. Finance At 11 February 2007 net debt was £15,269,183 including the additional £400,000loan drawn down to finance the redevelopment of the Princes ballroom at theMidland Hotel. £2,108,000 was repaid during the period under review. The Board has recommended increasing the dividend from 4.75p to 5.00p per share,amounting to £642,856, which, if approved by shareholders, will be paid on 23May 2007 to shareholders on the register at 11 May 2007. Capital Expenditure During the period capital expenditure amounted to £1,469,168 of which £538,745was spent at the Avon Gorge, Bristol, in the construction of the Bridge Cafe,the refurbishment of the front of the building and the continuing fees beingpaid in pursuit of our planning objectives. Currently we have successfullyobtained planning approval for nine new bedrooms, a brand new spa, pool and gymcomplex and for the refurbishment of the dilapidated ballroom. Approvals arestill awaited for a new glass house (to be used in conjunction with the ballroomand for private parties) located on the Terrace overlooking the CliftonSuspension Bridge, for a new greenhouse restaurant and for the rebuilding of twodilapidated houses. These two houses once refurbished would release the current14 bedroom staff house in the highly desirable Caledonia Place in Clifton forsale. The process is complex but we believe that good progress is being made andthe Company is working closely with local residents and the planningauthorities. The Princes ballroom at the Midland Hotel in Bradford has been totallyrefurbished and a substantial uplift in advance reservations is already evident.Bedroom and Conference room improvements were undertaken during the year at theCrown & Mitre Hotel Carlisle, the Golden Lion Hotel Leeds, the Midland HotelBradford and the Bull Hotel Peterborough. The administrative offices were transferred from Aire House to the basement ofthe Golden Lion Hotel. CHAIRMAN'S STATEMENT Non-Core Assets Aire House was successfully sold in December 2006 for £2,050,000. Following the receipt of planning permission for 99 new apartments, office spaceand associated car parking on our Salem Street site, in Bradford, the marketingprocess has commenced and the Company expects to exchange contracts and completethe sale of this site in the current financial year. The successful completionof this transaction would enable the Company to prepay further debt during theyear. The Company owns a large house in Jesmond in Newcastle and is currently in theprocess of seeking planning approval for five apartments with a view toeventually marketing it for sale. Shareholders Shareholders are actively encouraged to visit the Company's hotels andexperience the progress that is continually been made in terms of product andservices whilst enjoying a beneficial discount. All shareholders are entitled toa 30% discount, using the special reservations number, 0207 266 1100 or e-mailinfo@peelhotel.com. Shareholders can identify the hotels by using the directoryat the back of the Annual Report. The new website www.peelhotels.co.uk hasrecently been launched and I hope that you will use it to keep in touch with ourprogress and the various promotional initiatives that are on offer. Staff The Board would like to thank all the management and staff for theircontribution to the business of Peel Hotels and for the safety and welfare ofits guests. In the final analysis it is their friendliness and care for theguests that will build the Company's reputation and grow the business. John Perkins, the Finance Director, unfortunately fell ill during the year underreview and was unable to work for the majority of the year. We wish him a speedyrecovery. Nick Parrish, who has been with Peel Hotels since 1998, has deputisedin his absence. Future I mentioned at the half year how flat growth had not enabled the significantincrease in costs to be absorbed and to a major extent the year end outcomereflects the damage done in the first half year. Profit before tax improved 6%(excluding the exceptional profit on disposal of Aire House) in the second halfof the year compared to the same period in the previous year. The current year has started well, our energy costs are dramatically down on theprevious winter and the Company will have the benefit of non recurring itemssuch as comparisons on management contract income and restaurant opening costsat the Avon Gorge. It will enjoy the benefits of less debt and the currentbenefit of the Cap on £7 million of our debt which will substantially decreaseinterest payable in the year. The Board believes there is considerable scope to improve the overallperformance of the portfolio whilst continuing to pay down debt and maintaininga progressive dividend policy for its shareholders. Robert PeelChairman11 April 2007 PROFIT & LOSS ACCOUNT For the 52 weeks ended 11 February 2007 Note 11 February 12 February 2007 2006 as restated £ £ £ £ ----------- --------- --------- ---------TurnoverOriginal group 12,816,393 12,400,8413 Hotels acquired 16 May2005 3,103,583 2,482,642 ----------- --------- --------- ---------Continuing operations 15,919,976 14,883,483Discontinued business - 63,608Total turnover 15,919,976 14,947,091 ----------- --------- --------- ---------Cost of Sales (12,049,329) (10,806,273) ----------- --------- --------- --------- Gross ProfitOriginal group 3,618,177 3,709,5123 Hotels acquired 16 May2005 252,470 367,698 ----------- --------- --------- ---------Continuing operations 3,870,647 4,077,210Discontinued business - 63,608Total Gross Profit 3,870,647 4,140,818 ----------- --------- --------- ---------Administrative expensesDepreciation (1,133,957) (1,010,509) Other (742,857) (711,577) (1,876,814) (1,722,086) ----------- --------- --------- ---------Operating profitOriginal group 2,058,751 2,200,7603 Hotels acquired 16 May2005 (64,918) 154,364 ----------- --------- --------- ---------Continuing operations 1,993,833 2,355,124Discontinued business - 63,608Total operating profit 1,993,833 2,418,732Profit on disposal ofproperty 850,000 -Interest payable & similarcharges (1,280,713) (1,255,759) ----------- --------- --------- ---------Profit on ordinaryactivities before taxation 1,563,120 1,162,973Taxation (299,000) (293,288) ----------- --------- --------- ---------Profit on ordinaryactivities after taxation 1,264,120 869,685 ----------- --------- --------- ---------Earnings per share 1Basic 9.8p 6.9pDiluted 9.3p 6.6p ----------- --------- --------- --------- There are no recognised gains and losses for the current financial year andpreceding financial year other than the profit shown above. BALANCE SHEET As at 11 February 2007 11 February 12 February 2006 2007 as restated £ £ ---------- ---------Fixed assetsTangible assets 34,747,844 35,520,467 ---------- ---------Current assetsStocks 116,581 116,997Debtors 1,052,859 965,574Cash at bank and in hand 158,530 159,622 ---------- --------- 1,327,970 1,242,193Creditors (due within one year) (3,206,767) (3,336,634) ---------- ---------Net current liabilities (1,878,797) (2,094,441) ---------- ---------Total assets less current 32,869,047 33,426,026liabilitiesCreditors (due after one year) (14,670,677) (15,981,828) Provision for liabilities (1,664,102) (1,630,492) ---------- ---------Total assets 16,534,268 15,813,706 ---------- --------- Capital and reservesCalled up share capital 1,285,713 1,281,213Share premium account 9,068,950 9,033,145Profit and loss account 6,179,605 5,499,348 ---------- ---------Equity shareholders' funds 16,534,268 15,813,706 ---------- --------- The accompanying accounting policies and notes form an integral part of thesefinancial statements. Approved by the board on 11 April 2007 Robert Peel, Director Norbert Petersen, Director CASH FLOW STATEMENT For the 52 weeks ended 11 February 2007 Note £ 52 weeks to £ 52 weeks to 11 February 12 February 2007 2006 £ £ Net cash inflow from 2 3,239,888 3,957,772operating activitiesReturns on investments& servicing of financeInterest paid (1,319,704) (1,195,137) Net cash outflow from (1,319,704) (1,195,137)returns on investmentsand servicing of finance TaxationUK corporation tax paid (107,482) (24,140) -------- --------- -------- ---------Tax paid (107,482) (24,140) Capital expenditurePurchase of tangible fixed assets (1,469,168) (3,873,183) Sale of tangible fixed assets 2,050,000 - Net cash inflow/(outflow) from 580,832 (3,873,183)capital expenditure Equity dividend paid (608,576) (545,421) Net cash inflow/(outflow) 1,784,958 (1,680,109)before financingFinancing 40,305 621,873Issue of ordinary share capital - (39,038)Less share issue costsNew long term loan 400,000 2,500,000Less loan arrangement fees (4,000) (25,000)Loan repayments (2,107,945) (1,113,405) -------- --------- -------- ---------Net cash (outflow)/inflow fromfinancing (1,671,640) 1,944,430 -------- --------- -------- ---------Increase in cash 3 113,318 264,321 -------- --------- -------- --------- Reconciliation of net debt Increase in cash 113,318 264,321Decrease/(increase) in debt 1,707,945 (1,361,595) Reduction in net debt 1,821,263 (1,097,274)resulting from cash flowsNon cash changes (25,659) (30,819)Decrease/(increase) in net debt in the 1,795,604 (1,128,093)yearNet debt at beginning of year (17,064,787) (15,936,694) -------- ---------Net debt at end of year 3 (15,269,183) (17,064,787) -------- --------- NOTES TO THE PRELIMINARY ANNOUNCEMENT Financial year ended 11 February 2007 1. Earnings per share Basic 12,831,222 12,625,196Calculated on average number of share issue £1,264,120 £869,685during the year and on profit after taxation (2006: asrestated) Diluted 13,512,236 13,109,618 --------- ---------Calculated on average of number of shares available £1,264,120 £869,685during year and on the profit after taxation (2006: asrestated) --------- --------- In calculating the diluted earnings per share, the weighted average number ofshares is adjusted for the dilutive effect of the share options by 681,014 (2006- 484,422), giving an adjusted number of shares of 13,512,236 (2006 -13,109,618). 2. Reconciliation of operating profit to net cash inflow from operatingactivities Operating profit 1,993,833 2,418,732Depreciation 1,133,957 1,010,509Recognition of equity-settled 24,713 19,018share-based paymentsDecrease/(increase) in stocks 416 (23,268)(Increase)/ decrease in debtors (86,795) 82,169Increase in creditors 173,764 450,612 -------- ---------Net cash inflow from operating 3,239,888 3,957,772activities -------- --------- 3. Analysis of net debt At beginning Cash Non At end of of year flow cash year £ £ changes £ £ --------- --------- ---------- ---------Cash at bank and in hand 159,622 (1,092) - 158,530Bank overdrafts (500,311) 114,410 - (385,901) --------- --------- ---------- --------- (340,689) 113,318 - (227,371)Debt due within one year (742,270) 371,135 - (371,135)Debt due after one year (15,981,828) 1,336,810 (25,659) (14,670,677) --------- --------- ---------- ---------Total (17,064,787) 1,821,263 (25,659) (15,269,183) --------- --------- ---------- --------- NOTES TO THE PRELIMINARY ANNOUNCEMENT Financial year ended 11 February 2007 4. The financial information set out above does not constitute thecompany's statutory accounts for periods ended 11 February 2007 and 12 February2006 but is derived from those accounts. Statutory accounts for 2006 have beendelivered to the Registrar of Companies and those for 2007 will be deliveredfollowing the company's annual general meeting. The Auditors reported on those accounts; their reports were unqualified and didnot contain statements under section 237 (2) or (3) of the Companies Act 1985. 5. The annual report for the period ended 11 February 2007 will be postedto shareholders by 27 April 2007. This information is provided by RNS The company news service from the London Stock Exchange