REG - Dalata Hotel Group - 2016 Preliminary Financial Results <Origin Href="QuoteRef">DHG.I</Origin> - Part 2
28/02/2017 07:06
- Part 2: For the preceding part double click ID:nRSb9900Xa
million (net of deferred issue costs)
at 31 December 2016, of which £174.4 million (E203.6 million) was held in Sterling. Net debt to full year Adjusted EBITDA
was 2.4x at 31 December 2016. The Group also had undrawn facilities of E52.2 million at year end.
Revaluation Reserve
In accordance with the Group's accounting policies, land and buildings are stated at fair value. Reductions in value (where
there was previously no revaluation reserve for the asset) are accounted for in the profit for the period, whereas upward
revaluations are generally accounted for in the revaluation reserve on the balance sheet. The Group is permitted to
recognise an increase in value in the profit for the period to the extent that it reverses a previous revaluation loss for
that property which was charged against profits in prior periods.
At 31 December 2016, the Group recognised a net revaluation gain of E66.6 million on its properties. E66.4 million of net
upward revaluations on land and buildings were recognised in other comprehensive income and E0.2 million was recognised as
a net revaluation gain including reversal of prior year losses in the profit for the year.
Acquisitions
During the first half of 2016, the Group spent E38.9 million on the acquisition of the leasehold interests and businesses
of four hotels from the Choice Hotel Group, E26.0 million on the acquisition of the Tara Towers Hotel and Clarion Sligo
Hotel and E8.7 million on the freehold interest of the Clarion Limerick Hotel (for which it had acquired the leasehold
interest). A further E34.8 million was spent on the acquisition of four hotel development sites in Dublin, Cork and
Belfast.
The freehold interest of Maldron Hotel Cork (E8.3 million) and Clayton Hotel Cardiff including its investment property (£24
million; E27 million) were acquired in the second half of the year. A site adjacent to Maldron Hotel Parnell Square was
also bought for E5.1 million.
Intangible assets and goodwill
Following the goodwill impairment, an asset remains of E33.8 million at year end which relates to the remaining goodwill
from the acquisition of the former Moran Bewley group (E24.9 million), other single asset acquisitions made in 2015 (E2.0
million) and the remaining goodwill from the original 2007 acquisitions following the formation of Dalata (E6.9 million).
At 31 December 2016, there are intangible assets of E20.5 million which represent the acquired leasehold interest in The
Gibson Hotel.
Capital Expenditure
In addition to acquisitions, the Group spent E28.5 million in capital expenditure including E16.1 million on recently
commenced new hotel developments and redevelopment projects at existing hotels in particular Clayton Hotel Chiswick,
Clayton Hotel Silver Springs and Maldron Hotel Pearse Street. E6.0 million was spent on other room refurbishments with a
further E6.4 million on other refurbishment related capital spend. This will support the enhancement of the Clayton and
Maldron brands and deliver a superior experience to our guests.
Dalata Hotel Group plcCondensed consolidated statement of profit or loss and other comprehensive incomefor the year ended 31 December 2016
2016 2015
Note E'000 E'000
Continuing operations
Revenue 2 290,551 225,673
Cost of sales (109,864) (86,907)
Gross profit 180,687 138,766
Administrative expenses, including goodwill impairment of E10.325 million (2015: E0.199 million), acquisition-related costsof E2.671 million (2015: E15.802 million) and main market listing costs of E1.293 million (2015: Enil) (125,717) (104,554)
Other income 637 2,745
Operating profit 55,607 36,957
Finance income - 1,863
Finance costs (11,496) (10,363)
Profit before tax 44,111 28,457
Tax charge (9,188) (6,831)
Profit for the year attributable to owners of the Company 34,923 21,626
Other comprehensive income
Items that will not be reclassified to profit or loss
Revaluation of property 5 66,403 46,567
Related deferred tax (6,382) (6,398)
60,021 40,169
Items that are or may be reclassified subsequently to profit or loss
Exchange difference on translating foreign operations (35,730) 5,169
Gain/(loss) on net investment hedge 24,876 (4,329)
Fair value movement on cash flow hedges (3,740) (1,670)
Cash flow hedges - reclassified to profit or loss 1,206 655
Related deferred tax 316 127
(13,072) (48)
Other comprehensive income for the year, net of tax 46,949 40,121
Total comprehensive income for the year attributable to owners of the Company 81,872 61,747
Earnings per share
Basic earnings per share 9 E0.1909 E0.1455
Diluted earnings per share 9 E0.1893 E0.1447
Dalata Hotel Group plcCondensed consolidated statement of financial positionAt 31 December 2016
Note 2016 2015
Assets E'000 E'000
Non-current assets
Intangible assets and goodwill 4 54,267 46,803
Property, plant and equipment 5 822,444 608,792
Investment property 6 3,245 37,285
Deferred tax assets 1,894 3,936
Other receivables 4,748 2,216
Derivatives 7 26
Total non-current assets 886,605 699,058
Current assets
Trade and other receivables 15,874 11,774
Inventories 1,817 1,349
Cash and cash equivalents 81,080 149,155
Total current assets 98,771 162,278
Total assets 985,376 861,336
Equity
Share capital 1,830 1,830
Share premium 503,113 503,113
Capital contribution 25,724 25,724
Merger reserve (10,337) (10,337)
Share-based payment reserve 2,126 912
Hedging reserve (3,106) (888)
Revaluation reserve 107,531 47,510
Translation reserve (9,974) 880
Retained earnings 3,475 (31,448)
Total equity 620,382 537,296
Liabilities
Non-current liabilities
Loans and borrowings 7 264,681 250,168
Deferred tax liabilities 25,051 15,859
Derivatives 3,401 885
Provision for liabilities 3,040 890
Total non-current liabilities 296,173 267,802
Current liabilities
Loans and borrowings 7 15,734 15,970
Trade and other payables 52,050 39,290
Current tax liabilities 1,037 978
Total current liabilities 68,821 56,238
Total liabilities 364,994 324,040
Total equity and liabilities 985,376 861,336
Dalata Hotel Group plcCondensed consolidated statement of changes in equityfor the year ended 31 December 2016
Attributable to owners of the Company
Share-based
Share Share Capital Merger payment Hedging Revaluation Translation Retained
capital premium contribution reserve reserve reserve reserve reserve earnings Total
E'000 E'000 E'000 E'000 E'000 E'000 E'000 E'000 E'000 E'000
At 1 January 2016 1,830 503,113 25,724 (10,337) 912 (888) 47,510 880 (31,448) 537,296
Comprehensive income:
Profit for the year - - - - - - - - 34,923 34,923
Other comprehensive income
Exchange difference on translating foreign operations - - - - - - - (35,730) - (35,730)
Gain on net investment hedge - - - - - - - 24,876 - 24,876
Revaluation of property - - - - - - 66,403 - - 66,403
Fair value movement on cash flow hedges - - - - - (3,740) - - - (3,740)
Cash flow hedges - reclassified to profit or loss - - - - - 1,206 - - - 1,206
Related deferred tax - - - - - 316 (6,382) - - (6,066)
______ _ ___
Total comprehensive income for the year - - - - - (2,218) 60,021 (10,854) 34,923 81,872
Transactions with owners of the Company:
Issue of shares - - - - - - - - - -
Share issue costs - - - - - - - - - -
Equity-settled share-based payments - - - - 1,214 - - - - 1,214
Total transactions with owners of the Company - - - - 1,214 - - - - 1,214
At 31 December 2016 1,830 503,113 25,724 (10,337) 2,126 (3,106) 107,531 (9,974) 3,475 620,382
Dalata Hotel Group plcCondensed consolidated statement of changes in equityfor the year ended 31 December 2015
Attributable to owners of the Company
Share-based
Share Share Capital Merger payment Hedging Revaluation Translation Retained
capital premium contribution reserve reserve reserve reserve reserve earnings Total
E'000 E'000 E'000 E'000 E'000 E'000 E'000 E'000 E'000 E'000
At 1 January 2015 1,220 295,133 25,724 (10,337) 273 - 7,341 40 (46,681) 272,713
Comprehensive income:
Profit for the year - - - - - - - - 21,626 21,626
Other comprehensive income
Exchange difference on translating foreign operations - - - - - - - 5,169 - 5,169
Loss on net investment hedge - - - - - - - (4,329) - (4,329)
Revaluation of property - - - - - - 46,567 - - 46,567
Fair value movement on cash flow hedges - - - - - (1,670) - - - (1,670)
Cash flow hedges - reclassified to profit or loss - - - - - 655 - - - 655
Related deferred tax - - - - - 127 (6,398) - - (6,271)
_
Total comprehensive income for the year - - - - - (888) 40,169 840 21,626 61,747
_
Transactions with owners of the Company:
Issue of shares 610 209,716 - - - - - - - 210,326
Share issue costs - (1,736) - - - - - - (6,393) (8,129)
Equity-settled share-based payments - - - - 639 - - - - 639
_
Total transactions with owners of the Company 610 207,980 - - 639 - - - (6,393) 202,836
_
At 31 December 2015 1,830 503,113 25,724 (10,337) 912 (888) 47,510 880 (31,448) 537,296
Dalata Hotel Group plcCondensed consolidated statement of cash flowsfor the year ended 31 December 2016
2016 2015
E'000 E'000
Cash flows from operating activities
Profit for the year 34,923 21,626
Adjustments for:
Depreciation of property, plant and equipment 15,477 10,039
Impairment of goodwill 10,325 199
Net revaluation movements through profit or loss (241) 1,576
Share-based payment expense 1,214 639
Finance costs 11,496 10,363
Finance income - (1,863)
Tax charge 9,188 6,831
82,382 49,410
Increase in trade and other payables 3,092 6,683
(Increase)/decrease in trade and other receivables (909) 1,568
Increase in inventories (64) (317)
Tax paid (6,688) (2,941)
Net cash from operating activities 77,813 54,403
Cash flows from investing activities
Acquisitions of undertakings through business combinations, net of cash acquired (62,428) (479,087)
Purchase of property, plant and equipment (108,604) (28,551)
Purchase of investment property - (35,897)
Deposits paid on acquisitions (1,024) (1,316)
Interest received - 6
Net cash used in investing activities (172,056) (544,845)
Cash flows from financing activitiesUnsecured shareholder loan notes
Interest and finance costs paid (9,983) (13,753)
Receipt of bank loans 57,607 283,090
Repayment of bank loans (16,800) (17,890)
Proceeds from issue of share capital, net of expenses - 168,700
Payment for derivative asset - (156)
Net cash from financing activities 30,824 419,991
Net decrease in cash and cash equivalents (63,419) (70,451)
Cash and cash equivalents at the beginning of the year 149,155 217,807
Effect of movements in exchange rates (4,656) 1,799
Cash and cash equivalents at the end of the year 81,080 149,155
Dalata Hotel Group plc
Notes to the condensed consolidated financial statements
1 General information and basis of preparation
Dalata Hotel Group plc ('the Company') is a company domiciled in the Republic of Ireland. The Company's registered office
is 4th Floor, Burton Court, Burton Hall Drive, Sandyford, Dublin 18.
The financial information presented here in these condensed consolidated financial statements does not comprise full
statutory financial statements for 2016 or 2015 and therefore does not include all of the information required for full
annual financial statements. The condensed consolidated financial statements of the Group for the year ended 31 December
2016 comprise the Company and its subsidiary undertakings and were authorised for issue by the Board of Directors on 27
February 2017. Full statutory financial statements for the year ended 31 December 2016, prepared in accordance with
International Financial Reporting Standards ('IFRS') as adopted by the EU, together with an unqualified audit report
thereon under Section 391 of the Companies Act 2014, will be annexed to the annual return and filed with the Registrar of
Companies. The full statutory financial statements for 2015 have already been filed with the Registrar of Companies with an
unqualified audit report thereon.
These condensed consolidated financial statements are presented in Euro, rounded to the nearest thousand, which is the
functional currency of the parent company and also the presentation currency for the Group's financial reporting.
The preparation of financial statements requires the directors to make estimates and assumptions that affect the reported
amounts of assets and liabilities, as well as disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the reporting year. Such estimates and judgements are
based on historical experience and other factors, including expectation of future events, that are believed to be
reasonable under the circumstances and are subject to continued re-evaluation. Actual outcomes could differ from those
estimates.
Key judgements and estimates impacting these condensed consolidated financial statements are:
· Accounting for acquisitions, including allocation of consideration to assets and liabilities acquired and treatment
of acquisition costs (note 3);
· Carrying value of goodwill and intangible assets including assumptions underpinning the impairment tests (note 4);
and
· Carrying value and depreciation of own-use property measured at fair value (note 5).
The accounting policies applied in these condensed consolidated financial statements are consistent with those applied in
the consolidated financial statements for the year ended 31 December 2015, except for the application for the first time of
the accounting policy for intangible assets other than goodwill as described below.
Intangible assets other than goodwill
All identifiable intangible assets acquired as part of a business combination are recognised separately from goodwill
provided the criteria for recognition are satisfied. Such intangible assets are initially recognised at fair value in line
with IFRS 3 Business Combinations.
An intangible asset is only recognised where the item lacks a physical presence, is identifiable, non-monetary, is
controlled by the Group and is expected to provide future economic benefits to the Group.
An intangible asset is determined to have an indefinite useful life when, based on the facts and circumstances, there is no
foreseeable limit to the period over which the asset is expected to generate future economic benefits for the Group.
Intangible assets with indefinite lives are reviewed for impairment on an annual basis and are not amortised. The useful
life of an intangible asset that is not subject to amortisation is reviewed at least annually to determine whether a change
in the useful life is appropriate.
Dalata Hotel Group plc
Notes to the condensed consolidated financial statements
2 Operating segments
The segments are reported in accordance with IFRS 8 Operating Segments. The segment information is reported in the same way
as it is reviewed and analysed internally by the chief operating decision makers, primarily the CEO, and Board of
Directors.
The Group segments its leased and owned business by geographical region within which the hotels operate - Dublin, Regional
Ireland and United Kingdom. These, together with Managed Hotels, comprise the Group's four reportable segments.
Dublin, Regional Ireland and United Kingdom segments:
These segments are concerned with hotels that are either owned or leased by the Group. The Group leases ten hotel buildings
from property owners and is entitled to the benefits and carries the risks associated with operating these hotels. As at 31
December 2016, the Group also owns 23 hotels and has effective ownership of one further hotel which it operates. It also
owns part of one of the other hotels which it operates.
At 31 December 2015, the Clarion Cork hotel was classified as an investment property as the Group did not operate the
hotel. The Group acquired the leasehold interest as part of a wider acquisition (see note 3) during 2016. As a result, this
hotel is now operated by the Group and the results of the hotel are included in the segmental analysis presented below for
the year ended 31 December 2016.
The Group's revenue from leased and owned hotels is primarily derived from room sales and food and beverage sales in
restaurants, bars and banqueting. The main costs arising are payroll, cost of goods for resale, other operating costs and,
in the case of leased hotels rent paid to lessors.
Managed Hotels segment:
Under management agreements, the Group provides management services for third party hotel proprietors.
Revenue 2016 2015
E'000 E'000
Dublin 151,945 120,759
Regional Ireland 68,467 42,989
United Kingdom 67,498 58,370
Managed Hotels 2,641 3,555
______ ______
Total revenue 290,551 225,673
______ ______
Revenue for each of the geographical locations represents the operating revenue (room revenue, food and beverage revenue
and other hotel revenue) from leased and owned hotels situated in (i) Dublin, (ii) the rest of the Republic of Ireland and
(iii) the United Kingdom.
Revenue from Managed Hotels represents the fees and other income earned from services provided in relation to partner
hotels which are not owned or leased by the Group.
Dalata Hotel Group plc
Notes to the condensed consolidated financial statements
2 Operating segments (continued)
2016 2015
E'000 E'000
Segmental results - EBITDAR
Dublin 72,992 53,754
Regional Ireland 18,170 9,695
United Kingdom 26,505 22,249
Managed Hotels 2,641 3,555
______ ______
EBITDAR for reportable segments 120,308 89,253
______ ______
Segmental results - EBITDA
Dublin 53,472 39,262
Regional Ireland 16,231 7,734
United Kingdom 22,511 19,535
Managed Hotels 2,641 3,555
______ ______
EBITDA for reportable segments 94,855 70,086
______ ______
Reconciliation to results for the period
Segmental results - EBITDA 94,855 70,086
Rental income 637 608
Central costs (10,360) (8,068)
______ ______
Adjusted EBITDA 85,132 62,626
Impairment of goodwill (10,325) (199)
Acquisition-related costs (2,671) (15,802)
Stock exchange listing costs (1,293) -
Net revaluation movements through profit or loss 241 (1,576)
Net impact of Ballsbridge site sale - 1,947
______ ______
Group EBITDA 71,084 46,996
Depreciation of property, plant and equipment (15,477) (10,039)
Finance income - 1,863
Finance costs (11,496) (10,363)
______ ______
Profit before tax 44,111 28,457
Tax (9,188) (6,831)
______ ______
Profit for the period 34,923 21,626
Dalata Hotel Group plc
Notes to the condensed consolidated financial statements
2 Operating segments (continued)
Group EBITDA represents earnings before interest, tax, depreciation and amortisation.
Adjusted EBITDA is presented as an alternative performance measure to show the underlying operating performance of the
Group excluding the effects of depreciation, revaluation movements, goodwill impairment and items considered by management
to be non-recurring or unusual in nature. Acquisition costs have been excluded to give a more meaningful measure given the
scale of acquisitions in 2015 and 2016. Consequently, adjusted EBITDA represents Group EBITDA before:
· Stock exchange listing costs and acquisition-related costs;
· Net revaluation movements through profit or loss;
· Loss on revaluation of property;
· Impairment of goodwill (note 4); and
· Net impact of the Ballsbridge site sale (see below).
In 2015, the line item 'Net impact of Ballsbridge site sale' represented a sales incentive fee of E2.1 million receivable
by the Group following the sale by the landlord in 2015 of the Ballsbridge Hotel, Clyde Court Hotel and their respective
sites, less associated exit costs of E0.2 million.
The line item 'Central costs' includes costs of the Group's central functions including operations support, technology,
sales and marketing, human resources, finance, corporate services and business development.
'Segmental results - EBITDA' for Dublin, Regional Ireland and United Kingdom represents the 'Adjusted EBITDA' for each
geographical location before central costs and excluding rental income. It is the net operational contribution of leased
and owned hotels in each geographical location.
'Segmental results - EBITDA and EBITDAR' for Managed Hotels represents fees earned from services provided in relation to
partner hotels. All of this activity is managed through Group central office and specific individual costs are not
allocated to this segment.
'Segmental results - EBITDAR' for Dublin, Ireland Regional and United Kingdom represents 'Segmental results - EBITDA'
before rent. For leased hotels, rent paid to lessors amounted to E25.5 million in 2016 (2015: E19.2 million).
Other geographical information
Revenue 2016 2015
Republic of Ireland United Kingdom Total Republic of Ireland United Kingdom Total
E'000 E'000 E'000 E'000 E'000 E'000
Leased and owned hotels 220,412 67,498 287,910 163,748 58,370 222,118
Managed hotels 2,488 153 2,641 3,327 228 3,555
_____ _____ _____ _____ _____ _____
Total revenue 222,900 67,651 290,551 167,075 58,598 225,673
_____ _____ _____ _____ _____ _____
Dalata Hotel Group plc
Notes to the condensed consolidated financial statements
2 Operating segments (continued)
Other geographical information (continued)
Assets and liabilities At 31 December 2016 At 31 December 2015
Republic of Ireland United Kingdom Total Republic of Ireland United Kingdom Total
E'000 E'000 E'000 E'000 E'000 E'000
Assets
Intangible assets and goodwill 41,588 12,679 54,267 28,875 17,928 46,803
Property, plant and equipment 575,782 246,662 822,444 365,198 243,594 608,792
Investment property 1,750 1,495 3,245 37,285 - 37,285
Other non-current assets 4,748 - 4,748 2,216 - 2,216
Current assets 88,169 10,602 98,771 155,194 7,084 162,278
______ ______ ______ ______ ______ ______
Total assets excluding derivatives and tax assets 712,037 271,438 983,475 588,768 268,606 857,374
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