REG - Dalata Hotel Group - Half Yearly Report <Origin Href="QuoteRef">DHG.I</Origin> - Part 2
29/10/2014 10:15
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E'000
Cash at bank and in hand 5,963 4,940
Money-market funds 228,660 -
234,623 4,940
Liquidity risk
The Group's approach to managing liquidity is to ensure as far as possible
that it will always have sufficient liquidity to:
· fund its ongoing operations;
· allow it to invest in hotels that may create value for shareholders;
and
· maintain sufficient financial resources to mitigate against risks and
unforeseen events.
Market risk
Market risk is the risk that changes in market prices and indices, such as
interest rates and foreign exchange rates will affect the Group's income or
the value of its holdings of financial instruments.
The Group is currently only exposed to interest rate risk on its cash held on
deposit. The Group monitors the available interest rates and manages this in
conjunction with the objective to have funds available to invest in hotels.
The Group has no material transaction foreign exchange risk exposure. It is
exposed to translation foreign exchange rate risk on its hotel operation in
Cardiff, Wales. The Group believes that its foreign exchange rate exposures
will not have a material effect on the Group's income or the value of its
holdings of financial instruments.
Fair values
The following tables show the carrying amount of Group financial assets and
liabilities including their values in the fair value hierarchy. The tables do
not include fair value information for financial assets and financial
liabilities not measured at fair value if the carrying amount is a reasonable
approximation of fair value.
Financial assets Financial assets Financial liabilities Fair value
measured at measured at amortised cost measured at Total carrying amount Level 1 Level 2 Level 3 Total
fair value amortised cost
30 June 30 June2014 30 June2014 30 June2014 30 June2014 30 June2014 30 June2014 30 June2014
2014
E'000 E'000 E'000 E'000 E'000 E'000 E'000 E'000
Trade and other receivables (Note 8) - 10,974 - 10,974
Cash at bank and in hand - 5,963 - 5,963
Money-market funds 228,660 - - 228,660 228,660 - - -
Trade and other payables (Note 9) - - (14,724) (14,724)
228,660 16,937 (14,724) 230,873
31 Dec2013 31 Dec2013 31 Dec2013 31 Dec2013 31 Dec2013 31 Dec2013 31 Dec2013
E'000 E'000 E'000 E'000 E'000 E'000 E'000
Trade and other receivables (Note 8) 6,945 - 6,945
Cash and cash equivalents 4,940 - 4,940
Trade and other payables (Note 9) - (10,958) (10,958)
Unsecured shareholder loan notes
including accrued interest (Note 13) - (54,725) (54,725) - - (40,000) (40,000)
Bank loans - variable(Note 13) - (9,000) (9,000)
11,885 (74,683) (62,798)
13 Interest bearing loans and borrowings
30 June 31 December
2014 2013
E'000 E'000
Repayable within one year
Bank borrowings - 2,000
_______ _______
Repayable after one year
Unsecured shareholder loan notes - 31,497
Accrued interest on unsecured loan notes - 23,228
Bank borrowings - 7,000
_______ _______
- 61,725
_______ _______
Total interest-bearing loans and borrowings - 63,725
_______ _______
On 21 February 2014 all shareholder loan note obligations of DHGL Limited were
novated to the Company. All obligations in relation to the shareholder loan
notes were settled in exchange for the issue of 12 million ordinary shares of
the Company at a value of E30 million on 19 March 2014 (see Note 16).
At 30 June 2014, the total amount due in respect of bank borrowings amounted
to ENil (31 December 2013: E9 million). All bank loans were repaid in full on
2 April 2014.
14 Related party transactions
Under IAS 24, Related Party Disclosures, the company has a related party
relationship with its fellow group undertakings, shareholders and directors of
the company. All transactions with subsidiaries eliminate on consolidation
and are not disclosed.
Other than the transactions with shareholders disclosed in Notes 15 and 16,
there were no changes in related party transactions in the six months ended 30
June 2014 that materially affected the financial position or the performance
of the Group during that period.
15 Group reorganisation and impact on reserves
As part of the Group reorganisation which is described in Note 1, the Company
became the ultimate parent entity of the Group on 20 February 2014, when it
acquired 100% of the issued share capital of DHGL Limited in exchange for the
issue of 9,500 ordinary shares of E0.01 each. By doing so, it also indirectly
acquired the 100% shareholdings previously held by DHGL Limited in each of its
subsidiaries. As part of that reorganisation, the shareholder loan note
obligations (including accrued interest) of DHGL Limited were assumed by the
Company as part of the consideration paid for the equity shares in DHGL
Limited.
The fair value of the Group (as then headed by DHGL Limited) at that date was
estimated at E40 million. The fair value of the shareholder loan note
obligations assumed by the Company as part of the acquisition was E29.7
million and the fair value of the shares issued by the Company in the share
exchange was E10.3 million.
The difference between the carrying value of the shareholder loan note
obligations (E55.4 million) prior to the reorganisation and their fair value
(E29.7 million) at that date represents a contribution from shareholders of
E25.7 million which has been credited to a separate capital contribution
reserve.
The imposition of Dalata Hotel Group plc as a new holding company of DHGL
Limited does not meet the definition of a business combination under IFRS 3
"Business Combinations", and, as a consequence, the acquired assets and
liabilities of DHGL Limited and its subsidiaries continue to be carried in the
consolidated financial statements at their respective carrying values as at
the date of the reorganisation. The consolidated financial statements of
Dalata Hotel Group plc are prepared on the basis that the Company is a
continuation of DHGL Limited, reflecting the substance of the arrangement.
As a consequence, an additional merger reserve of E10.3 million (debit) arises
in the consolidated statement of financial position. This represents the
difference between the consideration paid for DHGL Limited in the form of
shares of the Company, and the issued share capital of DHGL Limited at the
date of the reorganisation which was a nominal amount of E95.
16 Share capital and premium
At 30 June 2014 - Dalata Hotel Group plc
Authorised Share Capital Number E'000
Ordinary shares of E0.01 each 10,000,000,000 100,000
____________ _______
Allotted, called-up and fully paid shares Number E000
Ordinary shares of E0.01 each 122,000,000 1,220
____________ _______
Share premium 295,145
_______
At 31 December 2013 - DHGL Limited
Authorised Share Capital Number E
Ordinary shares of E0.00001 each 75,000,000 750
A Ordinary shares of E0.00001 each 25,000,000 250
Ordinary redeemable shares @ E1 each 100 100
_________ _______
Allotted, called-up and fully paid shares Number E
7,499,999 Ordinary Shares of E0.00001 each2,000,000 A Ordinary Shares of E0.00001 each 7520 7520
_________ _______
On incorporation of Dalata Hotel Group plc in November 2013, the issued share
capital was 7 ordinary shares of E1 each. On 14 February 2014, the Company
issued 39,898 ordinary shares of E1 each in partial settlement of an
equivalent amount owed to shareholders.
On 20 February 2014, each of the issued and unissued shares of the Company
were sub-divided into 100 ordinary shares of E0.01 each.
On 20 February 2014, as part of the reorganisation of the Group (see Note 15),
the Company issued 9,500 ordinary shares of E0.01 each to the shareholders of
DHGL Limited in exchange for their shares in DHGL Limited. The share premium
on these shares was E10.3 million (see Note 15).
On 19 March 2014, Dalata Hotel Group plc was admitted to trading on the
Enterprise Securities Market (ESM) of the Irish Stock Exchange and the
Alternative Investment Market (AIM) of the London Stock Exchange. On
Admission:
· 106,000,000 ordinary shares of E0.01 each were issued representing the
new shares being placed by the Company at the time of admission for cash at an
issue price of E2.50 per share, resulting in gross proceeds of E265 million.
Share premium of E254.9 million was recorded on these shares after deduction
of Initial Public Offering costs of E9.0 million.
· 12,000,000 ordinary shares of E0.01 each were issued at E2.50 per share
in settlement of all obligations arising from the shareholder loan notes (see
Note 13) at an amount of E30 million. The share premium on these shares was
E29.9 million.
17 Earnings per share
Basic earnings per share (EPS) is computed by dividing the profit for the
period available to ordinary shareholders by the weighted average number of
ordinary shares outstanding during the period. Diluted earnings per share is
computed by dividing the profit for the period by the weighted average number
of ordinary shares outstanding and, when dilutive, adjusted for the effect of
all potentially dilutive shares. The following table sets out the computation
for basic and diluted earnings/(loss) per share for the periods ended 30 June
2014 and 30 June 2013:
30 June 2014 30 June 2013
Profit/(loss) attributable to shareholders of the parent company (E'000) - basic and diluted 704 (1,790)
Earnings/(loss) per share - Basic 0.993 cent (E188.42)
Earnings/(loss) per share - Diluted 0.992 cent (E188.42)
Weighted average shares outstanding - Basic 70,897,507 9,500
Weighted average shares outstanding - Diluted 70,970,783 9,500
The difference between the basic and diluted weighted average shares
outstanding for the period ended 30 June 2014 is due to the dilutive impact of
the conditional share awards granted in March 2014 (see Note 5). The weighted
average number of shares outstanding for 2013 includes the effect of existing
shares of DHGL Limited in 2013 being equivalent to 9,500 of the E0.01 ordinary
shares of Dalata Hotel Group plc issued in 2014.
18 Events after the reporting date
The Group completed the following two property acquisitions after the
reporting date:
Maldron Cardiff Lane, Dublin 2 - (3 Rooms)
On 21 July 2014, three rooms in Maldron Hotel Cardiff Lane, Dublin 2 were
acquired for E275,000.
Maldron Hotel Pearse Street, Dublin
On 29 August 2014, Suvanne Management Limited, a 100% subsidiary of the Group
acquired the Maldron Hotel Pearse Street (formerly Holiday Inn Pearse Street)
and adjoining investment properties. The total cost, including the deposit
paid in the period to 30 June 2014, was E14.4 million.
Shareholdings in Qulpic and Zrko
Since the period end, the Group has also entered into conditional agreements
to acquire 25% of the share capital in each of Qulpic Limited and Zrko
Limited, together with associated loans from Durance Investments Limited, for
a consideration of E21.8 million. Qulpic Limited and Zrko Limited own the
Clyde Court and Ballsbridge Hotels respectively.
Tower Hotel, Derry
Since the period end, the Group entered an agreement to acquire the Tower
Hotel in Derry, Northern Ireland for a consideration of £4.375 million.
20 Approval of financial statements
The Board of Directors approved the interim condensed consolidated financial
statements for the six months ended 30 June 2014 on 8 September 2014.
Independent Review Report to Dalata Hotel Group plc
Introduction
We have been engaged by the company to review the condensed set of
consolidated financial statements in the half-yearly financial report for the
six months ended 30 June 2014 which comprises the consolidated statement of
comprehensive income, consolidated statement of financial position,
consolidated statement of changes in equity, consolidated statement of
cashflows, and the related explanatory notes. We have read the other
information contained in the half-yearly financial report and considered
whether it contains any apparent misstatements or material inconsistencies
with the information in the condensed set of consolidated financial
statements.
This report is made solely to the company in accordance with the terms of our
engagement and guidance contained in International Standard on Review
Engagements (UK and Ireland) 2410 Review of Interim Financial Information
Performed by the Independent Auditor of the Entity. Our review has been
undertaken so that we might state to the company those matters we are required
to state to it in this 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 conclusions
we have reached.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been
approved by, the directors.
As disclosed in note 1, the annual financial statements of the group are
prepared in accordance with IFRSs as adopted by the EU. The directors are
responsible for ensuring that the condensed set of financial statements
included in this half-yearly financial report has been prepared in accordance
with IAS 34 Interim Financial Reporting as adopted by the EU.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed
set of consolidated financial statements 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. 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 condensed set of consolidated financial statements in the
half-yearly report for the six months ended 30 June 2014 is not prepared, in
all material respects, in accordance with IAS 34 Interim Financial Reporting
as adopted by the EU.
KPMG
8 September 2014
Chartered Accountants
1 Stokes Place
St. Stephen's Green
Dublin 2
This information is provided by RNS
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