27 Oct 2017 07:00
PEEL HOTELS PLC INTERIM RESULTS For 28 weeks ended 13 August 2017
· Sales decreased 5.1% to £8,648,145 (2016: £9,115,526)
· Operating Profit decreased 31.3% to £604,556 (2016: £880,119)
· Revpar decreased 4.2%. Occupancy down 3.3%, average room rate down 1.0%
· Profit before tax decreased 46.1% to £319,293 (2016: £592,807)
· Net Debt decreased by £395,437
· Earnings per share
Basic 1.8p (2016: 3.4p)
Diluted 1.8p (2016: 3.4P)
Chairman Robert Peel said 'It is difficult to move forward from an earnings point of view without sales growth however we continue to generate sufficient cash to continually decrease our net debt and to continue the reinvestment in our properties.'
Press enquiries: 0207 266 1100
Nominated advisor and Broker: 0207 418 8900
Peel Hunt LLP
Capel Irwin
CHAIRMAN'S STATEMENT
Results
The slowdown in commercial activity experienced in the second half of last year due to uncertainties in relation to Brexit continued in the first 3 (four week) periods of the current year. These periods are historically low trading periods and due to the high operational gearing of our business, together with the impact of two increases in minimum wages and the living wage, our EBITDA decreased £220,265 on the previous year, in those periods. This has produced a disappointing interim result in comparison to last year's excellent interim result. However on a positive note EBITDA for the remaining 4 (four week) periods of the half year was broadly neutral in comparison to the previous year.
In the 28 weeks to 13 August 2017 hotel revenues decreased 5.1% to £8,648,145 (2016: £9,115,526). Hotel gross profit before depreciation and Group administration decreased 15.1% to £1,503,402 (2016: £1,771,160). Over the same period EBITDA (earnings before interest, tax and depreciation) decreased 19.7% to £1,119,749 (2016: £1,394,871) and operating profit decreased 31.3% to £604,556 (2016: £880,119)
Revpar (accommodation revenue per available room) decreased 4.2% with occupancy down 3.3% and average room rate down 1.0%.
Administration expenses increased 2.0% and depreciation increased 0.1% to £515,193.
Financial charges decreased by 0.7% to £285,263
Profit before tax was £319,293 compared to a profit of £592,807 last year; a decrease of 46.1%
Corporation tax has been provided at an effective rate of 20%. Basic earnings per share were 1.8p compared with 3.4p in the comparative period on a weighted average of 14,012,123 (14,012,123) shares in issue.
Finance
On 19 September 2017 the Company entered into a £9,900,000 five year term loan facility with Allied Irish Bank. This facility has been used to repay the Company's existing facilities with Royal Bank of Scotland as well as the remaining balances of the Directors Loan and Loan Notes. The revised financial structure will result in a significant reduction in financial charges going forward. Savings in 2018/2019 financial year are estimated to be not less than £160,000 provided Libor remains the same as it is currently.
On 13 August 2017 net debt stood at £9,159,332 representing loans totalling £9,582,625 less £423,293 cash at bank. Gearing on Shareholders' funds was 38.0% with interest covered 2.1 times. Net debt decreased by £395,437 compared with the previous year end.
Capital expenditure
We spent £369,516 in the period (2016: £421,216), mainly on the refurbishment of three suites and the public areas at the Norfolk Royale and the refurbishment of 12 bedrooms at the King Malcolm Hotel, Dunfermline. We have completed the refurbishment of the public areas and ballroom at the Crown and Mitre in Carlisle.
We plan to spend £700,000 in this financial year on our strategy of continually improving the standards offered in our portfolio of hotels and maintaining the fabric of our buildings. This sum is in addition to a significant sum expensed to the Income Statement.
Shareholders
We are always delighted to welcome Shareholders to our Hotels where they can see for themselves the progress we have made, whilst enjoying a beneficial discount of 50% of our rack rate tariff, using a special reservations number 0207 266 1100 or e-mail info@peelhotel.com Shareholders can keep in touch with progress in the company and various promotional activities by visiting our website www.peelhotels.co.uk
The Future
The comparative shortfall in EBITDA in the first three periods will be difficult to make up by the end of the financial year however sales have now stabilised, REVPAR currently is growing (reversing the trend in the half year) and costs are under control. The ongoing diminution of financial charges will be of great benefit to the Company and net debt will continue to decrease satisfactorily whilst leaving the Company sufficient surplus cash to continue the reinvestment in its Properties.
Robert Peel
Chairman
20 October 2017
DIRECTORS AND ADVISORS
Directors
Robert Edmund Guy Peel Executive Chairman
Nicholas David Lawton Parrish Financial Director
Norbert Paul Gottfried Petersen Non-executive Director
Haydn Herbert James Fentum Non-executive Director
Secretary
Thrings LLP
Kinnaird House, 1 Pall Mall East, London SW1Y 5AU
Registered Office
5th Floor, Kinnaird House, 1 Pall Mall East, London SW1Y 5AU
Company registration number 3473990
Auditor
Grant Thornton UK LLP
No. 1 Whitehall Riverside, Leeds, LS1 4BN
Bankers
Allied Irish Bank Plc
10 Berkeley Square, Mayfair, London W1J 6AA
Registrars
Computershare Services Plc
The Pavilions, Bridgewater Road, Bristol BS13 8AE
Solicitors
Thrings LLP
Kinnaird House, 1 Pall Mall East, London SW1Y 5AU
Stockbroker
Peel Hunt LLP
Moor House, 120, London Wall, London EC2Y 5ET
GROUP STATEMENT OF COMPREHENSIVE INCOME
for the 28 weeks ended 13 August 2017
Note | Unaudited 28 weeks ended 13/08/2017 £ | Unaudited 28 weeks ended 14/08/2016 £ | Audited Year ended 29/01/2017 £ | |||
Revenue
Cost of sales | 8,648,145
(7,144,743) | 9,115,526
(7,344,366) | 16,790,320
(13,852,109) | |||
Gross profit
Administration expenses Exceptional expense Depreciation
Total admin. expenses |
(383,653) - (515,193)
|
1,503,402
(898,846) |
(376,289) - (514,752)
|
1,771,160
(891,041) |
(687,883) (170,500) (981,594)
|
2,938,211
(1,839,977) |
Operating profit
Finance expense | 604,556
(285,263) | 880,119
(287,312) | 1,098,234
(522,847) | |||
Profit before tax
Income tax 4 | 319,293
(63,856) | 592,807
(118,561) | 575,387
(140,665) | |||
Profit and total comprehensive income for the period attributable to owners |
255,437 |
474,246 |
434,722 | |||
Earnings per share Basic & diluted (pence) 5 |
1.8 |
3.4 |
3.1 | |||
GROUP STATEMENT OF CHANGES IN EQUITY
for the 28 weeks ended 13 August 2017
28 weeks ended 14 August 2016
Unaudited |
Share Capital £ |
Share Premium Account £ |
Profit and loss account £ |
Total £ |
Balance brought forward at 1 February 2016 Profit and total comprehensive income for the period Transactions with owners Dividend |
1,401,213
-
- |
9,743,495
-
- |
12,620,907
474,246
(280,242) |
23,765,615
474,246
(280,242) |
Balance at 14 August 2014 | 1,401,213 | 9,743,495 | 12,814,911 | 23,959,619 |
12 months ended 29 January 2017
Audited |
Share Capital £ |
Share Premium Account £ |
Profit and loss account £ |
Total £ |
Balance brought forward at 1 February 2016 Profit and total comprehensive income for the period Transactions with owners Dividend |
1,401,213
-
- |
9,743,495
-
- |
12,620,907
434,722
(280,242) |
23,765,615
434,722
(280,242) |
Balance at 29 January 2017 | 1,401,213 | 9,743,495 | 12,775,387 | 23,920,095 |
28 weeks ended 13 August 2017
Unaudited |
Share Capital £ |
Share Premium Account £ |
Profit and loss account £ |
Total £ |
Balance brought forward at 30 January 2017 Profit and total comprehensive income for the period Transactions with owners Dividend |
1,401,213
-
- |
9,743,495
-
- |
12,775,387
255,437
- |
23,920,095
255,437
- |
Balance at 13 August 2017 | 1,401,213 | 9,743,495 | 13,030,824 | 24,175,532 |
GROUP BALANCE SHEET
at 13 August 2017
13/08/2017 Unaudited £ | 14/08/2016 Unaudited £ | 29/01/2017 Audited £ | |
Assets Non-current assets Property, plant and equipment |
35,356,887 |
35,679,921 |
35,502,564 |
Total non-current assets
Current assets Inventories Trade and other receivables Prepayments Cash at bank and in hand | 35,356,887
119,332 529,006 898,662 423,293 | 35,679,921
119,243 434,939 874,584 588,745 | 35,502,564
114,034 354,076 741,405 292,653 |
Total current assets |
1,970,293 |
2,017,511 |
1,502,168 |
Total assets |
37,327,180 |
37,697,432 |
37,004,732 |
Equity and liabilities Equity attributable to owners Share capital Share premium Retained earnings |
1,401,213 9,743,495 13,030,824 |
1,401,213 9,743,495 12,814,911 |
1,401,213 9,743,495 12,775,387 |
Total equity
Liabilities Non-current Borrowings (due after one year) Deferred tax liabilities |
24,175,532
765,203 861,330 |
23,959,619
9,730,747 919,308 |
23,920,095
1,030,000 861,330 |
Non-current liabilities
Current Trade and other payables Borrowings (due within one year) Current tax liabilities |
1,626,533
2,583,530 8,817,422 124,163 |
10,650,055
2,632,973 260,000 194,785 |
1,891,330
2,259,437 8,817,422 116,448 |
Current liabilities | 11,525,115 | 3,087,758 | 11,193,307 |
Total liabilities and equity | 37,327,180 | 37,697,432 | 37,004,732 |
GROUP CASH FLOW STATEMENT
for the 28 weeks ended 13 August 2017
Unaudited 28 weeks ended 13/08/2017 £ | Unaudited 28 weeks ended 14/08/2016 £ | Audited Year ended 29/01/2017 £ | |
Cash flows from operating activities Profit for the period
Adjustment for: Finance expense Income tax expense Depreciation |
255,437
285,263 63,856 515,193 |
474,246
287,312 118,561 514,752 |
434,722
522,847 140,665 981,594 |
Operating profit before changes in working capital and provisions
UK corporation tax paid (Increase)/decrease in trade and other receivables Increase in trade and other payables Decrease in inventories |
1,119,749
(56,142) (397,013) 408,699 (5,298) |
1,394,871
(69,750) (62,327) 459,064 (6,658) |
2,079,828
(228,168) 149,237 112,381 (1,449) |
Net cash from operating activities | 1,069,995 | 1,715,200 | 2,111,829 |
Cash flows from investing activities Acquisition of property, plant and equipment |
(369,516) |
(421,216) |
(710,701) |
Net cash from investing activities | (369,516) | (421,216) | (710,701) |
Cash flows from financing activities Interest paid Loan repayments Equity dividends paid |
(324,839) (245,000) - |
(246,987) (240,000) (280,242) |
(480,223) (410,000) (280,242) |
Net cash from financing activities | (569,839) | (767,229) | (1,170,465) |
Net increase in cash and cash equivalents |
130,640 |
526,755 |
230,663 |
Cash and cash equivalents at the beginning of the period |
292,653 |
61,990 |
61,990 |
Cash and cash equivalents at the end of the period |
423,293 |
588,745 |
292,653 |
For the purposes of the cash flow statement, cash and cash equivalents comprise:
Cash and bank balances
|
423,293
|
588,745
|
292,653
|
NOTES TO THE INTERIM RESULTS
for the period ended 13 August 2017
1. Basis of accounting
The interim financial information for the period ended 13 August 2017 has been prepared applying the accounting policies and presentation of the Group's published consolidated financial statements for the year ended 29 January 2017.
The financial information contained in the interim report does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006 and does not include all of the information and disclosures required for complete financial statements. The financial information in the interim report does not constitute statutory accounts as defined by section 434 of the Companies Act 2006 and has not been audited or reviewed.
The financial information relating to the year ended 29 January 2017 is an extract from the latest published financial statements on which the auditor gave an unmodified report that did not contain statements under section 498(2) or 498(3) of the Companies Act 2006 and which have been filed with the Registrar of Companies.
2. Accounting policies
The condensed, consolidated financial statements in this half-yearly financial report for the period ended 13 August 2017 have been prepared in accordance with the AIM Rules for Companies and on a basis consistent with the accounting policies and methods of computation consistent with those set out in the Annual Report and financial statements for the year ended 29 January 2017, except as described below. The Group has chosen not to adopt IAS 34 'Interim Financial Statements' in preparing these interim financial statements and therefore the Interim financial information is not in full compliance with International Financial Reporting Standards.
In preparing the condensed, consolidated financial statements, management are required to make accounting assumptions and estimates. The assumptions and estimation methods are consistent with those applied to the Annual Report and financial statements for the year ended 29 January 2017. Additionally the principal risks and uncertainties that may have a material impact on activities and results of the Group remain materially unchanged from those described in that Annual Report.
3. Post balance sheet events
On 19 September 2017 the Company entered into a £9,900,000 five year term loan facility with Allied Irish Bank. This facility has been used to repay the Company's existing facilities with Royal Bank of Scotland as well as the remaining balances of the Director's Loan and Loan Notes. The revised financial structure will result in a significant reduction in financial charges going forward
4. Taxation
Tax has been provided at a rate of 20% which represents the expected effective rate for the full year.
5. Earnings per share
Earnings per share are based on the profit after taxation and on the weighted average number of shares in issue during the period.
28 weeks ended 13/8/2017 Unaudited | 28 weeks ended 14/8/2016 Unaudited | Year ended 29/1/2017 Audited | |
Average No.shares -Basic -Diluted
|
14,012,123 14,012,123 |
14,012,123 14,012,123 |
14,012,123 14,012,123 |