15 May 2014 07:00
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PEEL HOTELS PLC
PRELIMINARY ANNOUNCEMENT
Derived from audited results for Financial Year Ended 2 February 2014.
HIGHLIGHTS
# Turnover increased 1.8% to £15,509,911 (2013: £15,233,026)
# EBITDA increased 16.6% to £1,980,380 (2013: £1,698,060)
# Operating Profit up 65.7% to £929,627 (2013: £560,979)
# Net debt decreased £656,567
# Profit before tax £341,863 (2013: Loss of £97,411)
# Earnings per share basic and diluted 2.78p (2013: 0.03p)
'We hope to sustain improvements in EBITDA growth on the back of a slowly recovering market place and this, together with lower finance costs, should transform the profitability of the Group giving us options in terms of reappearing on the Dividend list, increased capital expenditure and further debt repayments'.
Robert Peel
Chairman
0207 286 6823
Press Enquiries
Peel Hunt LLP / Capel Irwin
0207 418 8907
Review of the business
RESULTS
The Group achieved a modest improvement in the Financial Year ended 2 February 2014 with hotel revenues increasing by 1.8% to £15,509,911 (2013: £15,233,026). Hotel gross profit before depreciation and Group administration increased 5.3% to £2,538,464 (2013: £2,410,311). EBITDA increased 16.6% to £1,980,380 (2013: £1,698,060).
FINANCE
As at 2 February 2014 net debt stood at £11,709,734 (2013: £12,366,301) representing loans totalling £11,420,253 (2013:£12,090,770) and an overdraft of £484,496(2013:£392,085) less £195,015 (2013:£116,554) cash at bank. Gearing on Shareholders' funds was 52.2% with interest covered 0.99 times. Net debt decreased by £656,567 compared with the previous year.
It is worth pointing out that, in spite of the onerous fixed interest swap at 5.83% plus margin of 3% on the majority of our debt costing an additional of £352,000 in interest this year alone and in spite of a challenging trading environment, the Group has decreased its net debt by £3,084,836 over the past four financial years.
During the year 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 three years.
During the year the £850,000 of unsecured loan notes that bear interest at 7% per annum to Robert Peel and Charles Peel, which were originally due for repayment in 2013, had the repayment date extended to December 2017.
Following the expiry of the fixed interest swap on 11 April 2014 Shareholders should note that there will be a substantial decrease in financial costs in 2014/15 and therefore a positive benefit to the profitability of the Group.
CAPITAL EXPENDITURE
£519,328 was spent in the year mainly on the continuing refurbishment of bedrooms at the Bull Hotel, Peterborough, Midland Hotel, Bradford, the Cosmopolitan Hotel, Leeds and the reception hall at the Caledonian Hotel, Newcastle. We have also resurfaced the car park at the Crown and Mitre Hotel, Carlisle. 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 £576,192 (2013: £557,048) was spent on repairs and renewals which ensures that we continue to improve the quality of our product.
Group Statement of Comprehensive Income
for the year ended 2 February 2014
2014 | 2013 | ||||||
£ | £ | ||||||
Revenue |
| 15,509,911 | 15,233,026 | ||||
Cost of sales | (12,971,447) | (12,822,715) | |||||
Gross profit | 2,538,464 | 2,410,311 | |||||
Administration expenses | (558,084) | (712,251) | |||||
Depreciation | (1,050,753) | (1,137,081) | |||||
Total administration expenses | (1,608,837) | (1,849,332) | |||||
Operating profit | 929,627 | 560,979 | |||||
Finance income | 414 | 318 | |||||
Finance expense | (932,822) | (961,444) | |||||
Fair value movement on derivative | 344,644 | 302,736 | |||||
Profit/(loss) before tax | 341,863 | (97,411) | |||||
Income tax | 47,610 | 101,563 | |||||
Profit and total comprehensive income for the period attributable to owners | 389,473 | 4,152 | |||||
Earnings per share | |||||||
Basic & diluted (pence) | 2.78 | 0.03 | |||||
Group statement of changes in equity
for the years ended 2 February 2014 and 3 February 2013
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Year ended 2 February 2014 | Share Capital | Share premium account | Profit and loss account | Total |
£ | £ | £ | £ | |
Balance brought forward at 4 February 2013 | 1,401,213 | 9,743,495 | 10,908,886 | 22,053,594 |
Profit and total comprehensive income for the period | - | - | 389,473 | 389,473 |
Balance at 2 February 2014 | 1,401,213 | 9,743,495 | 11,298,359 | 22,443,067 |
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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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Group Balance Sheet
at 2 February 2014
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| 2014 | 2013 |
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| £ | £ |
Assets |
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Non-current assets |
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Property, plant and equipment |
| 36,506,121 | 37,037,546 |
Deferred tax asset |
| 31,813 | 115,852 |
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Total non-current assets |
| 36,537,934 | 37,153,398 |
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Current assets |
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Inventories |
| 108,670 | 99,529 |
Trade and other receivables |
| 1,114,703 | 1,136,554 |
Cash and cash equivalents |
| 195,015 | 116,554 |
Total current assets |
| 1,418,388 | 1,352,637 |
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Total assets |
| 37,956,322 | 38,506,035 |
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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 |
| 11,298,359 | 10,908,886 |
Total equity |
| 22,443,067 | 22,053,594 |
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Liabilities |
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Non-current |
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Borrowings |
| 10,844,199 | 9,324,716 |
Deferred tax liabilities |
| 982,306 | 1,182,914 |
Derivative financial instruments |
| - | 71,958 |
Non-current liabilities |
| 11,826,505 | 10,579,588 |
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Current |
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Trade and other payables |
| 2,383,690 | 2,231,275 |
Borrowings |
| 1,060,550 | 3,158,139 |
Current tax liabilities |
| 83,449 | 51,692 |
Derivative financial instruments |
| 159,061 | 431,747 |
Current Liabilities |
| 3,686,750 | 5,872,853 |
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Total liabilities and equity |
| 37,956,322 | 38,506,035 |
Group Cash Flow Statement
for the year ended 2 February 2014
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| 2014 | 2013 | |
| £ | £ | |
Cash flows from operating activities | |||
Profit for the year | 389,473 | 4,152 | |
Adjustments for: | |||
Financial income | (414) | (318) | |
Financial expense | 932,822 | 961,444 | |
Fair value movement on derivative | (344,644) | (302,736) | |
Income tax | (47,610) | (101,563) | |
Depreciation | 1,050,753 | 1,137,081 | |
Cash flows before changes in working capital and provisions | 1,980,380 | 1,698,060 | |
UK corporation tax (paid)/received | (37,202) | 43,941 | |
Decrease in trade and other receivables | 14,524 | 78,609 | |
Increase in trade and other payables | 165,423 | 95,145 | |
(Increase)/decrease in inventories | (9,141) | 2,777 | |
Net cash from operating activities | 2,113,984 | 1,918,532 | |
Cash flows from investing activities | |||
Acquisition of property, plant and equipment | (519,328) | (439,308) | |
Net cash from investing activities | (519,328) | (439,308) | |
Cash flows from financing activities | |||
Interest paid | (1,042,552) | (1,001,966) | |
New loans | - | 585,000 | |
Loan repayments | (566,054) | (467,889) | |
Net cash from financing activities | (1,608,606) | (884,855) | |
Net (decrease)/increase in cash and cash equivalents | (13,950) | 594,369 | |
Cash and cash equivalents at the beginning of the period | (275,531) | (869,900) | |
Cash and cash equivalents at the end of the period | (289,481) | (275,531) | |
For the purposes of the cash flow statement, cash and cash equivalents comprise: | |||
Cash and bank balances | 195,015 | 116,554 | |
Bank overdrafts | (484,496) | (392,085) |
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 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 2 February 2014 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 2 February 2014 was based on the profit attributable to ordinary shareholders of £389,473 (2013: £4,152) and a weighted average number of ordinary shares outstanding of 14,012,123 (2013: 14,012,123). No shares were issued in 2014 or 2013.
Diluted earnings per share
There were no potentially dilutive options in issue in 2014 and 2013 and consequently there is no difference between basic and diluted earnings per share.