30 Sep 2015 07:00
PEEL HOTELS PLC INTERIM RESULTS For 28 weeks ended 16 August 2015
· Sales up 4.6% to £8,951,062 (2014: £8,559,808)
· Operating Profit up 1.9% to £806,605 (2014: £791,498)
· Revpar increased 7.1%. Occupancy up 3.5% and average room rate up 3.5%
· Profit before tax (excluding swap) up 25.5% to £497,429 (2014: £396,358)
· Profit before tax £497,429 (2014:£555,419. Change in fair value
of swap £159,061)
· Net Debt decreased by £592,872
· Earnings per share
Basic 2.8p (2014: 3.0p)
Diluted 2.8p (2014: 3.0P)
Chairman Robert Peel said 'Improvement continues however cost pressures, both payroll and operating expenses, have to an extent nullified the excellent growth achieved in Revpar in the period. Cash flow is strong and we continue to decrease our debt thereby reducing the cost of finance on an ongoing basis. We expect another year of satisfactory progress.'
Press enquiries: 0207 266 1100
Nominated advisor and Broker: 0207 418 8900
Peel Hunt LLP
Capel Irwin
CHAIRMAN'S STATEMENT
Results
In the 28 weeks to 16 August 2015 hotel revenues increased 4.6% to £8,951,062 (2014: £8,559,808). Hotel gross profit before depreciation and Group administration increased 2.5% to £1,724,721 (2014: £1,682,466). Over the same period EBITDA (earnings before interest, tax and depreciation) increased 0.5% to £1,338,073 (2014: £1,331,527) and operating profit increased 1.9% to £806,605 (2014: £791,498)
Revpar (accommodation revenue per available room) increased 7.1% with occupancy up 3.5% and average room rate up 3.5%.
Administration expenses increased 10.2%. Depreciation decreased 1.6% but the £531,468 depreciated, was significantly less than capital expended, during the period.
Savings in financial charges through the termination of the swap on 11 April 2014 together with less net debt produced £85,964 less finance expenses in the period under review.
Excluding the change in the fair value of the financial instrument (swap), profit before tax increased 25.5% to £497,429 (2014: £396,358).
Profit before tax was £497,429 compared to a profit of £555,419 last year. (The profit last year included the change in fair value of the swap of £159,061).
Corporation tax has been provided at an effective rate of 21%. Basic earnings per share were 2.8p compared with 3.0p in the comparative period on a weighted average of 14,012,123 (14,012,123) shares in issue.
Finance
On 16 August 2015 net debt stood at £10,294,872 representing loans totalling £10,510,803 less £215,931 cash at bank. Gearing on Shareholders' funds was 44.1% with interest covered 2.6 times. Net debt decreased by £592,872 compared with the previous year end.
Capital expenditure
We spent £387,521 in the period (2014: £284,021) broadly spread over our portfolio. Our strategy continues to be one of continual improvement in the standards offered in our portfolio of hotels whilst at the same time maintaining the fabric of our buildings. We plan to spend over £600,000 on capital expenditure in the current year 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
Non-executive Director
John Govett, who has been with the Company since 23 February 1998 as a Non- executive Director, has asked to step down from the Board with effect from the publication of the half year results. John's contribution to Peel Hotels over the years has been immeasurable and we will greatly miss him. I am sure all our Shareholders would join with me in wishing him a long, healthy and happy retirement.
The Future
Cost pressures, both payroll and operating expenses, have to an extent nullified the excellent growth achieved in Revpar in the period. However cash flow is strong and we continue to decrease our net debt and thereby reduce the costs of finance on an ongoing basis.
We intend to improve our return on sales in the coming months and we expect another year of satisfactory progress.
Robert Peel
Chairman
29 September 2015
DIRECTORS AND ADVISORS
Directors
Robert Edmund Guy Peel Executive Chairman
Nicholas David Lawton Parrish Financial Director
Clement John Govett Non-executive Director
Keith Peter Benham Non-executive Director
Norbert Paul Gottfried Petersen 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
Royal Bank of Scotland Plc
280 Bishopsgate, London EC2M 4RB
Registrars
Computershare Services Plc
PO Box No 82, The Pavilions, Bridgewater Road, Bristol BS99 7NH
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 16 August 2015
Unaudited Unaudited Audited |
28 weeks ended 28 weeks ended Year ended |
16/08/2015 17/08/2014 01/02/2015 Note £ £ £ |
Revenue 8,951,062 8,559,808 16,454,241 |
Cost of sales (7,226,341) (6,877,342) (13,257,916) |
Gross Profit 1,724,72 1,682,466 3,196,325 |
Administration expenses (386,648) (350,939) (723,129) |
Depreciation (531,468) (540,029) (1,018,715) |
Operating profit 806,605 791,498 1,454,481 |
Finance income - - 12,539 |
Finance expense (309,176) (395,140) (666,678) |
Fair value movement on derivative - 159,061 159,061 |
Profit before tax 497,429 555,419 959,403 |
Income tax 2 (104,460) (138,855) ( 224,939) |
Profit and total comprehensiveincome for the period attributableto owners 392,969 416,564 734,464 |
Earnings per share |
Basic & diluted (pence) 3 2.8 3.0 5.24 |
GROUP STATEMENT OF CHANGES IN EQUITY
for the 28 weeks ended 16 August 2015
28 weeks ended 17 August 2014
Unaudited Share Profit |
Share premium and loss |
Capital account account Total |
£ £ £ £ |
Balance brought forward |
at 3 February 2014 1,401,213 9,743,495 11,298,359 22,443,067 |
Profit and total comprehensive |
income for the period - - 416,564 416,564 |
Balance at 17 August 2014 1,401,213 9,743,495 11,714,923 22,859,631 |
12 months ended 1 February 2015 |
Share Profit |
Audited Share premium and loss |
Capital account account Total |
£ £ £ £ |
Balance brought forward |
at 3 February 2014 1,401,213 9,743,495 11,298,359 22,443,067 |
Profit and total comprehensive |
income for the period - - 734,464 734,464 |
Balance at 1 February 2015 1,401,213 9,743,495 12,032,823 23,177,531 |
28 weeks ended 16 August 2015 |
Share Profit |
Unaudited Share premium and loss |
Capital account 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 - - 392,969 392,969 |
Transactions with owners |
Dividend - - (210,182) (210,182) |
Balance at 16 August 2015 1,401,213 9,743,495 12,215,610 23,360,318 |
GROUP BALANCE SHEET
at 16 August 2015
16/08/2015 17/08/2014 01/02/2015 |
Unaudited Unaudited Audited |
£ £ £ |
Assets |
Non-current assets |
Property, plant and equipment 35,948,930 36,252,290 36,092,877 |
Deferred tax asset - 31,813 - |
Total non-current assets 35,948,930 36,284,103 36,092,877 |
Current assets |
Inventories 110,015 106,783 103,288 |
Trade and other receivables 485,168 501,854 273,398 |
Prepayments 902,215 909,741 742,732 |
Cash at bank and in hand 215,931 145,426 146,830 |
Total current assets 1,713,329 1,663,804 1,266,248 |
Total assets 37,662,259 37,947,907 37,359,125 |
Equity and liabilities |
Equity attributable to owners |
Share capital 1,401,213 1,401,213 1,401,213 |
Share premium 9,743,495 9,743,495 9,743,495 |
Retained earnings 12,215,610 11,714,923 12,032,823 |
Total equity 23,360,318 22,859,631 23,177,531 |
Liabilities |
Non-current |
Borrowings (due after one year) 9,804,749 10,627,818 10,133,861 |
Deferred tax liabilities 962,730 982,306 962,730 |
Non-current liabilities 10,767,479 11,610,124 11,096,591 |
Current |
Trade and other payables 2,511,072 2,408,187 1,971,414 |
Borrowings (due within one year) 706,054 847,661 900,713 |
Current tax liabilities 317,336 222,304 212,876 |
Current liabilities 3,534,462 3,478,152 3,085,003 |
Total liabilities and equity 37,662,259 37,947,907 37,359,125 |
GROUP CASH FLOW STATEMENT
for the 28 weeks ended 16 August 2015
Unaudited Unaudited Audited |
28 weeks 28 weeks Year ended ended ended |
16/08/2015 17/08/2014 01/02/2015 |
£ £ £ |
Cash flows from operating activities |
Profit for the period 392,969 416,564 734,464 |
Adjustments for: |
Finance income - - (12,539) |
Finance expense 309,176 395,140 666,678 |
Fair value movement on derivative - (159,061) (159,061) |
Income tax expense 104,460 138,855 224,939 |
Depreciation 531,468 540,029 1,018,715 |
Operating profit before changes in |
working capital and provisions 1,338,073 1,331,527 2,473,196 |
UK corporation tax paid - - (83,275) |
(Increase)/decrease in trade and other receivables (363,733) (252,899) 137,826 |
Increase/(decrease) in trade and other payables 523,583 107,390 (305,381) |
(Increase)/decrease in inventories (6,727) 1,887 5,382 |
Net cash from operating activities 1,491,196 1,187,905 2,227,748 |
Cash flows from investing activities |
Acquisition of property, plant and equipment (387,522) (284,021) (603,295) |
Net cash from investing activities (387,522) (284,021) (603,295) |
Cash flows from financing activities |
Interest paid (266,705) (447,557) (696,747) |
Loan repayments (363,027) (293,027) (686,054) |
Equity dividends paid (210,182) - - |
Net cash from financing activities (839,914) (740,584) (1,382,801) |
Net increase in cash |
and cash equivalents 263,760 163,300 241,652 |
Cash and cash equivalents at the |
beginning of the period (47,829) (289,481) (289,481) |
Cash and cash equivalents at the |
end of the period 215,931 (126,181) (47,829) |
For the purposes of the cash flow statement, |
cash and cash equivalents comprise: |
Cash and bank balances 215,931 145,426 146,830 |
Bank overdraft - (271,607) (194,659) |
NOTES TO THE INTERIM RESULTS
for the period ended 16 August 2015
1. Basis of accounting
The interim financial information has been prepared on the basis of the recognition and measurement requirements of adopted IFRSs as at 16 August 2015 that are effective (or available for early adoption) at 31 January 2016. Based on these adopted IFRSs, the Directors have applied the accounting policies, which they expect to apply when the annual IFRS financial statements are prepared for the year ending 31 January 2016.
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.
The financial information set out in this interim report does not constitute statutory accounts as defined in sections 434 and 435 of the Companies Act 2006. The figures for the year ended 1 February 2015 have been extracted from the statutory financial statements which have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain a statement under section 498(2) and 498(3) of the Companies Act 2006.
The group's accounting policies remain as stated in the group's full annual accounts for the year ended 1 February 2015.
2. Taxation
Tax has been provided at a rate of 21% which represents the expected effective rate for the full year.
3. 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 | Year | Year | |
ended | ended | ended | |
16/8/2015 | 17/8/2014 | 1/2/2015 | |
Unaudited | Unaudited | Audited | |
Average No. shares - Basic | 14,012,123 | 14,012,123 | 14,012,123 |
- Diluted | 14,012,123 | 14,012,123 | 14,012,123 |
Independent review report to Peel Hotels plc
Introduction
We have been engaged by the Company to review the financial information in the half-yearly financial report for the 28 weeks ended 16 August 2015 which comprises the Group Statement of Comprehensive Income, the Group Statement of Changes in Equity, the Group Balance Sheet, the Group Cash Flow Statement, and the related notes.
We have read the other information contained in the half yearly financial report which comprises only the Chairman's Statement and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the Company in accordance with guidance contained in ISRE (UK and Ireland) 2410, 'Review of Interim Financial Information performed by the Independent Auditor of the Entity'. Our review work has been undertaken so that we might state to the Company those matters we are required to state to them in a review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our review work, for this report, or for the conclusion we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The AIM rules of the London Stock Exchange require that the accounting policies and presentation applied to the financial information in the half-yearly financial report are consistent with those which will be adopted in the annual accounts having regard to the accounting standards applicable for such accounts.
As disclosed in Note 1, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The financial information in the half-yearly financial report has been prepared in accordance with the basis of preparation in Note 1.
Our responsibility
Our responsibility is to express to the Company a conclusion on the financial information in the half-yearly financial report based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the financial information in the half-yearly financial report for the 28 weeks ended 16 August 2015 is not prepared, in all material respects, in accordance with the basis of accounting described in Note 1.
GRANT THORNTON UK LLP
AUDITOR
LEEDS
29 September 2015