Peel Hotels Regulatory News (PHO)

16 Apr 2008 07:00

Peel Hotels PLC16 April 2008 PEEL HOTELS PLC HIGHLIGHTS # Pre-Tax profits £9,589,533 (2007: £1,563,120) # Excluding exceptional profits Pre-Tax profits £1,447,012 (2007: £713,120) # Exceptional profits £8,142,531 (2007: £850,000) # Effectively no net debt £40,417 (2007 £15,269,183) # Earnings per share Basic 63.4p (2007: 9.8p) Diluted 62.8p (2007: 9.3p) # One off bonus dividend 15p per share # Final dividend 3.5p making 6.0p for the year (2007: 5.5p) We are in an excellent position, with effectively no net debt to take advantageof any weakness in the property market should that occur. Robert PeelChairman15 April 2008 Press enquiries:- 020 7266 1100 David DaviesNicholas MarrenKBC Peel Hunt Ltd. CHAIRMAN'S STATEMENT RESULTS Total turnover decreased by 4.8% to £15,150,339. Operating profit for the fullyear increased 10% to £2,192,541 (2007: £1,993,833) and increased 8.6% in thesecond half of the year from £749,140 to £813,693. On 3 September 2007 the Company sold the Avon Gorge Hotel together with theassociated staff house at 10, Caledonia Place for an aggregate consideration of£15,500,000 in cash paid on 3 September 2007. On 14 December 2007 the Companysold the freehold of its Salem Street site in Bradford with planning permissionfor 99 apartments, office space and associated car parking for a considerationof £2,000,000. These two disposals have resulted in an exceptional profit ondisposal of £8,142,521 in the year and have left the Company with minimal netdebt having also taken into account the purchase of the head lease and two smallfreeholds of the Bull Hotel in Peterborough for £2,350,000 on 4 September 2007. After taking into account this significant profit on asset disposals of£8,142,521, the pre-tax result was £9,589,533 (2007: £1,563,120). Excludingexceptional profits the comparative pre-tax profits were £1,447,012 (2007:£713,120). After a full tax provision, earnings per share were 63.4p basic and62.8p on a diluted basis (2007: 9.8p basic and 9.3p diluted). At 10 February 2008, net debt stood at £40,417 representing loans totalling£3,970,783 and an overdraft of £177,757 less £4,108,123 cash at bank. Gearing onShareholders' funds was 0.2% with interest covered 13.9 times. Net debtdecreased by £15,228,766 compared with the previous year. Like for like Hotel revenues, excluding the Avon Gorge Hotel, increased 3.7% andHotel profits after depreciation and before Company administration costsincreased 19.2%. REVPAR(accommodation revenue per available bedroom), calculatedwithout the Avon Gorge Hotel, increased 4.4% in the year with occupancy up by1.5% and average room rate up by 3%. Individual Hotel results were in the main encouraging with stellar performancesfrom the George Hotel in Wallingford and the Bull Hotel in Peterborough. TheStrathdon Hotel in Nottingham continued to lose money, although its Revparincreased by 1.9% which is an encouraging sign in our attempt to turn thisparticular business around. On 5 September 2007 a fire started in the kitchensof the Golden Lion in Leeds causing damage to kitchen, restaurant and 11bedrooms. Remedial work is still ongoing and, whilst the costs of the work arefully covered by insurance, it is pleasing to report that, notwithstanding thelosses of profit caused by the fire (which are fully insured), the Hotel stillmanaged to increase its profits after depreciation by 12% in the year. FINANCE The disposals in the year effectively left the Company with no net debt. On 11February 2008 net debt was £40,417. We repaid the £400,000 loan taken out forthe refurbishment of the Ballroom of the Midland Hotel, and £7,000,000 of theloan that was due for repayment in 2014, leaving a balance of £4,009,240 to berepaid in instalments from 2009 to 2014. At the year end the Company had£1,500,000 and £2,500,000 on deposit carrying interest rates of 6.30% and 6.31%respectively. The disposals in 2007 give rise to a capital gains liability of £2,400,000 to bepaid in November 2008. However should we decide to expand in the current yearthe liability would be largely mitigated and in any event would in allprobability be clawed back through capital expenditure over the next threeyears. The Board has considered the financial position of the Company in the light ofthe disposals and have decided to distribute a one off bonus dividend of 15p pershare amounting to £2,101,818. This will be paid out on 28 April 2008 to allShareholders on the register on 18 April 2008. CHAIRMAN'S STATEMENT In addition to the one off bonus dividend and as promised at the half year, theBoard has recommended paying a final dividend of 3.5p amounting to £490,424,which, if approved by Shareholders, will be paid on 22 May 2008 to Shareholderson the register at 25 April 2008 making a total of 5.5p for the year (2007: 5p) CAPITAL EXPENDITURE During the period capital expenditure amounted to £3,956,499 of which £2,462,108was to purchase the head lease and two small freeholds of the Bull Hotel inPeterborough. The balance of £1,494,391 was spent on upgrading the Company'sHotels of which £272,324 was spent on the Avon Gorge Hotel prior to itsdisposal. 16 of the 68 bedrooms at the Strathdon Hotel in Nottingham were refurbished.Improvements were made to the bedrooms at the Crown and Mitre Hotel in Carlisleand the Golden Lion Hotel in Leeds. Ballrooms were completely renovated at theKing Malcolm Hotel in Dunfermline and the George Hotel in Wallingford. Disabledbedrooms were built at the Caledonian Hotel in Newcastle and the Golden LionHotel in Leeds. The outside elevations of the Midland Hotel in Bradford continueto be restored and we have invested heavily in two luxury bedroom suites thatcomplement our growing conference and banqueting business. We expect toaccelerate our capital expenditure in the current year with a view to furtherimproving our product and thereby the ability to increase average room rates. NON-CORE ASSETS As mentioned above we successfully completed the sale of the Salem Street sitein Bradford for £2,000,000 on 14 December 2007. We are reviewing the merits of a sale or conversion to five flats of 31Grosvenor Place in Newcastle, currently used as staff accommodation. SHAREHOLDERS Shareholders are actively encouraged to visit the Company's Hotels andexperience the progress that is continually being 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 using the directory atthe back of the annual report. Shareholders can keep in touch with progress inthe Company and various promotional initiatives by visiting our websitewww.peelhotels.co.uk STAFF The Board would like to thank the management and staff for their contribution tothe business of Peel Hotels and for the safety and welfare of its guests. In thefinal analysis it is their friendliness and care for the guests that will buildthe Company's reputation and grow the business. Last year I mentioned that our Finance Director, John Perkins retired due to illhealth on the 16 April 2007. I am sad to report that John died on the 24 January2008 and our thoughts and sympathy are with his family. THE FUTURE We are in an excellent position, with effectively no net debt to take advantageof any weakness in the property market should that occur and we continuallyreview Hotels that are on the market. There is still plenty to do in regard toadding value to our existing portfolio and growing profits organically which inturn will self fund capital improvements and deliver to Shareholders aprogressive dividend policy. ROBERT PEELCHAIRMAN15 April 2008 PROFIT & LOSS ACCOUN For the 52 weeks ended 10 February 2008 Note 10 February 11 February 2008 2007 £ £ £ £ --------- -------- --------Turnover 15,150,339 15,919,976 --------- --------Cost of sales (11,010,153) (12,049,329) --------- --------Gross profit 4,140,186 3,870,647 --------- --------AdministrativeexpensesDepreciation (1,092,642) (1,133,957)Other (855,003) (742,857) (1,947,645) (1,876,814) --------- --------Operating profit 2,192,541 1,993,833Profit on disposalof 8,142,521 850,000property --------- --------Interest payable &similar (745,529) (1,280,713)charges --------- --------Profit on ordinaryactivities before 9,589,533 1,563,120taxation --------- --------Tax on profit onordinary (1,215,554) (299,000)activities --------- --------Profit on ordinaryactivities after 8,373,979 1,264,120taxationEarnings per share 2Basic 63.4p 9.8p --------- --------Diluted 62.8p 9.3p --------- -------- BALANCE SHEET As at 10 February 2008 10 February 11 February 2008 2007 £ £ --------- --------Fixed assetsTangible assets 28,724,660 34,747,844 --------- --------Current assetsStocks 86,786 116,581Debtors 1,342,973 1,052,859Cash at bank and in hand 4,108,123 158,530 --------- -------- 5,537,882 1,327,970Creditors (due within one year) (4,784,341) (3,206,767)Net current assets 753,541 (1,878,797) --------- --------Total assets less current liabilities 29,478,201 32,869,047Creditors (due after one year) (3,970,783) (14,670,677)Provision for liabilities (707,000) (1,664,102) Total assets 24,800,418 16,534,268 --------- -------- Capital and reservesCalled up share capital 1,401,213 1,285,713Share premium account 9,743,495 9,068,950Profit and loss account 13,655,710 6,179,605 Equity shareholders' funds 24,800,418 16,534,268 --------- -------- CASH FLOW STATEMENT For the 52 weeks ended 10 February 2008 Note 52 weeks to 52 weeks to 10 February 11 February 2008 2007 £ £ £ £ -------- --------- -------- --------Net cash inflow 3 3,272,305 3,239,888fromoperatingactivitiesReturns on investments& servicing of financeInterest paid (1,000,074) (1,319,704) -------- -------- Net cash outflow (1,000,074) (1,319,704)from returns oninvestments and servicing offinance TaxationUK corporation tax (30,656) (107,482)paid -------- --------- -------- --------Tax paid (30,656) (107,482) Capital expenditurePurchase of (3,978,456) (1,469,168)tangible fixedassetsSale of tangible 17,148,617 2,050,000fixed assets -------- --------- -------- --------Net cash inflow 13,170,161 580,832fromcapitalexpenditure Equity dividends (921,099) (608,576)paid -------- --------- -------- --------Net cash inflow 14,490,637 1,784,958before financingFinancing Issue of ordinary 790,045 40,305 share capitalNew long term loan - 400,000Less loan - (4,000)arrangement feesLoan repayments (11,122,945) (2,107,945) -------- --------- -------- --------Net cash outflow (10,332,900) (1,671,640)from financing -------- --------- -------- --------Increase in cash 4,157,737 113,318 -------- --------- -------- -------- Reconciliation of net debt Increase in cash 4,157,737 113,318Decrease in debt 11,122,945 1,707,945 -------- --------Reduction in net debt 15,280,682 1,821,263resulting from cash flowsNon cash changes (51,916) (25,659) -------- --------Decrease in net debt in the 15,228,766 1,795,604yearNet debt at beginning of year (15,269,183) (17,064,787) Net debt at end of year 4 (40,417) (15,269,183) -------- -------- NOTES TO THE ACCOUNTS Financial year ended 10 February 2008 1. Dividends 2008 2007 £ £Equity dividends on ordinary shares Paid during the year 921,099 608,576Proposed after the year end (not recognised as aliability) 490,424 642,856Bonus dividend proposed after the year end (notrecognised 2,101,819 -as a liability) 2. Earnings per share BasicCalculated on average number of shares in issue 13,214,179 12,831,222during the year and on profit after taxation £8,373,979 £1,264,120 DilutedCalculated on average of number of sharesavailable 13,344,490 13,512,236during year and on the profit after taxation £8,373,979 £1,264,120 In calculating the diluted earnings per share, the weighted average number ofshares is adjusted for the dilutive effect of the share options by 130,311 (2007- 681,014) shares, giving an adjusted number of shares of 13,344,490 (2007 -13,512,236). 3. Reconciliation of operating profit to net cash inflow from operatingactivities Operating profit 2,192,541 1,993,833Depreciation 1,092,642 1,133,957Recognition ofequity-settled 23,225 24,713share-basedpaymentsDecrease in stocks 29,795 416Increase in debtors (257,867) (86,795)Increase in 191,969 173,764creditors ------- ----------------Net cash inflow from operating 3,272,305 3,239,888activities ------- ---------------- 4. Analysis of net debt -------- -------- --------- -------- At beginning of Cash Non Cash At end of year Flow changes year £ £ £ £ -------- -------- --------- -------- Cash at bank and in hand 158,530 3,949,593 - 4,108,123Bank overdrafts (385,901) 208,144 - (177,757) -------- -------- --------- -------- (227,371) 4,157,737 - 3,930,366Debt due within one year (371,135) 371,135 - -Debt due after one year (14,670,677) 10,751,810 (51,916) (3,970,783) -------- -------- --------- -------- Total (15,269,183) 15,280,082 (51,916) (40,417) -------- -------- --------- -------- 5. The financial information set out above does not constitute the Company'sstatutory accounts for period ended 10 February 2008 but is derived from thoseaccounts. Statutory accounts for 2007 have been delivered to the Registrar ofCompanies and those for 2008 will be delivered following the Company's annualgeneral 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. 6. The annual report for the period ended 10 February 2008 will be posted toshareholders by 28 April 2008. The annual general meeting will be held at KBC Peel Hunt, 4th Floor, 111 OldBroad Street, London EC2N 1PH on Wednesday 21 May 2008 at noon. This information is provided by RNS The company news service from the London Stock Exchange