REG - Dalata Hotel Group - Trading and Development Update

Dalata HotelAnnouncement

18/12/2019 07:07

RNS Number : 2397X
Dalata Hotel Group PLC
18 December 2019
 


Year End Trading and Development Update
2019 EBITDA in line with market expectations
Announcing new Maldron Hotel in Liverpool
ISE: DHG              LSE: DAL
 
Dublin, 18 December 2019 | Dalata Hotel Group plc ("Dalata" or "the Company"), the largest hotel operator in Ireland, with a growing presence in the United Kingdom, is pleased to announce that despite tougher than anticipated market conditions in Dublin in the second half of the year, EBITDA for the year ending 31 December 2019 will be in line with market expectations.1
Market review
The Dublin market in the second half of 2019 has proved more challenging than expected with RevPAR for the market down 3.2% for the 11 months to the end of November compared to a decline of 1.4% for the first half of the year. The Dublin market continued to be impacted by the VAT increase, the additional supply of hotel rooms and a reduction in the number of events in October and November. On a 'like for like' basis, RevPAR at Dalata hotels decreased by 3.2% .
The performance of our Regional Ireland portfolio in the second half of the year has been very similar to the first half of the year. 'Like for like' RevPAR for the portfolio decreased by 0.7%2 for the 11 months to the end of November. The portfolio has performed well considering the impact that the increase in the VAT rate has had on the Regional Ireland market. 
Our UK portfolio has continued to perform very strongly, achieving a 'like for like' RevPAR increase of 3.0%2 for the 11 months to the end of November 2019. Our UK regional city hotels are performing particularly well and all outperformed their city markets in terms of RevPAR change versus 2018.
While the RevPAR performance of our Irish hotels was impacted by softer market conditions, effective cost control together with the positive impact of our hotels opened or extended during 2018 and early 2019 has ensured that Group EBITDA will be in line with market expectations.
New Maldron Hotel in Liverpool
Dalata is also pleased to announce that it has signed an agreement to lease a new hotel to be built in Liverpool. The new Maldron hotel will be of part of a mixed-use scheme being jointly developed by the Elliot Group and Valorem. The Park Lane site is adjacent to the award winning Liverpool One retail and leisure complex and within walking distance of all the city centre attractions. The hotel will comprise approximately 260 rooms, a restaurant, a bar and meeting room facilities. The proposed hotel secured planning permission this month and construction should commence in the first half of 2020. It is expected that the hotel will open in mid-2022.
 
 
 
1 On a pre and post IFRS 16 basis.
2 RevPAR growth is stated on a 'like for like' basis. The KPI's for Dublin exclude: (i) Clayton Hotel Charlemont and Maldron Hotel Kevin Street which opened during 2018, (ii) Maldron Hotel Parnell Square due to the significant extension added during 2018, (iii) the Tara Towers Hotel which closed in September 2018, (iv) Clayton Hotel Burlington Road due to the significant renovation works on-going at this hotel and (v) Clayton Hotel Liffey Valley due to the substantial acquisition of rooms during the period July 2018 - November 2019. The KPI's for Regional Ireland exclude Maldron Hotel South Mall, Cork which opened in December 2018 and Maldron Hotel Sandy Road, Galway which had a large extension added during 2018. The UK KPI's exclude (i) Clayton Hotel City of London, Maldron Hotel Newcastle and Maldron Hotel Belfast City which opened during 2018 and 2019 and (ii) The Tamburlaine Hotel Cambridge which we only operated for two weeks in November.
 
 
Development update
In November, we announced the acquisition of the operating and leasehold interest of The Tamburlaine Hotel Cambridge, which will be rebranded to Clayton Hotel Cambridge in the first quarter of 2020. We are very happy with the progress that we have made in the last month in integrating this hotel into the Dalata portfolio. The hotel will be EBITDA enhancing in 2020.
We continue to progress our development pipeline of approximately 2,660 rooms across the UK and Ireland.
·    In Dublin, the construction of Maldron Hotel Merrion Road and the residential units has commenced with the hotel scheduled to open in Q2 2021. The Samuel Hotel, Dublin is also projected to open in Q2 2021.
·    Construction has started at our Glasgow, Bristol and Manchester hotels. Maldron Hotel Glasgow is scheduled to open in Q1 2021, Clayton Hotel Manchester and Clayton Hotel Glasgow are scheduled to open in Q2 2021 while both Maldron Hotel Manchester and Clayton Hotel Bristol are scheduled to open in Q3 2021.
·    The opening date for Maldron Hotel Birmingham has been delayed due to the developer looking to expand the development, delivering a mixed-use development incorporating our hotel as one part. It is now scheduled to open in Q4 2022.
·    We are carrying out a substantial project at Clayton Hotel Cardiff Lane in Dublin with the new conference centre and ground floor layout expected to open in Q1 2021. The extension which will add 93 rooms is expected to open in Q2 2022.
·    Good progress is being made on amending the current planning permission for the site of the new Maldron Hotel Shoreditch. Construction is due to commence in Q2 2020 with an estimated opening date of Q1 2022. 
Dermot Crowley, Deputy CEO - Business Development & Finance, said:
"I am pleased with the performance of our hotels in 2019. Our Regional UK hotels have had a strong performance to date in 2019 and exceeded the market growth in all of the cities in which they operate. This result is very encouraging for our growth strategy in the UK. Our London hotels have also performed very strongly in their local areas.
Considering the considerable once off impact of the substantial increase in VAT together with increased supply in Dublin, I am happy that our Irish hotels have managed to protect their margins and help the Group as a whole meet market expectations on EBITDA performance. I am very pleased that 2019 will see a substantial increase in the level of free cashflow3 generated. This increase has been driven by the very successful performance of the hotels opened or extended in 2018 and early 2019.
We have made further progress on our development pipeline and I am delighted that we are today announcing another new project in the UK, the Maldron Hotel Liverpool. Liverpool has been a key target city for Dalata due to the strong mix of corporate and leisure business.
We look forward with confidence to 2020. We expect to see the continued very positive impact of the seven hotels opened or acquired in the last 18 months.  We have a modern, young and well invested portfolio of hotels that are run by highly trained and motivated Dalata teams. This puts us in a very strong position versus our competition as we head into 2020. Although supply continues to increase in Dublin, strong economic indicators for Ireland as a whole and an improved calendar of events in the city will help us to continue to grow profitably in the months ahead."
ENDS
3 Free cash flow is defined as net cash from operating activities (after tax), less amounts paid for fixed rent, interest and finance costs and refurbishment capital expenditure.
 
About Dalata
Dalata Hotel Group plc was founded in August 2007 and listed as a plc in March 2014. Dalata has a strategy of owning or leasing its hotels and also has a small number of management contracts. The Group's portfolio now consists of 30 owned hotels, 11 leased hotels and three management contracts with a total of 9,201 bedrooms. In addition to this, the Group is currently developing ten new hotels and has plans to extend two of its existing hotels, with a total of 2,660 bedrooms due to open over the next three years. This will bring the total number of bedrooms in Dalata to over 11,860. Dalata now has close to 5,000 employees. For the first six months of 2019, Dalata reported revenue of €201.9 million and a profit after tax of €32.7 million. Dalata is listed on the Main Market of Euronext Dublin (DHG) and the London Stock Exchange (DAL). For further information visit: www.dalatahotelgroup.com.
 
Contacts
 




Dalata Hotel Group plc


Tel +353 1 206 9400




Pat McCann, CEO


investorrelations@dalatahotelgroup.com




Dermot Crowley, Deputy CEO,
Business Development & Finance




Sean McKeon, Company Secretary and
Head of Risk and Compliance




 




Joint Company Brokers


 




Davy: Anthony Farrell


Tel +353 1 679 6363




Berenberg: Ben Wright


Tel +44 20 3753 3069




 


 




Investor Relations and PR | FTI Consulting


Tel +353 86 401 5250




Melanie Farrell


dalata@fticonsulting.com




 
 




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