REG - Peel Hotels PLC - Interim Results <Origin Href="QuoteRef">PEEL.L</Origin>

Peel HuntAnnouncement

27/10/2017 07:01

RNS Number : 7611U
Peel Hotels PLC
27 October 2017
PEEL HOTELS PLC
INTERIM RESULTS
For 28 weeks ended 13 August 2017
  Sales decreased 5.1% to 8,648,145 (2016: 9,115,526)
  Operating Profit decreased 31.3% to 604,556 (2016: 880,119)
  Revpar decreased 4.2%. Occupancy down 3.3%, average room rate down 1.0%
  Profit before tax decreased 46.1% to 319,293 (2016: 592,807)
  Net Debt decreased by 395,437
  Earnings per share
  Basic 1.8p (2016: 3.4p)
 Diluted 1.8p (2016: 3.4P)
Chairman Robert Peel said 'It is difficult to move forward from an earnings point of view without sales growth however we continue to generate sufficient cash to continually decrease our net debt and to continue the reinvestment in our properties.'
Press enquiries:  0207 266 1100
Nominated advisor and Broker:  0207 418 8900
Peel Hunt LLP
Capel Irwin


CHAIRMAN'S STATEMENT
Results
The slowdown in commercial activity experienced in the second half of last year due to uncertainties in relation to Brexit continued in the first 3 (four week) periods of the current year. These periods are historically low trading periods and due to the high operational gearing of our business, together with the impact of two increases in minimum wages and the living wage, our EBITDA decreased 220,265 on the previous year, in those periods. This has produced a disappointing interim result in comparison to last year's excellent interim result. However on a positive note EBITDA for the remaining 4 (four week) periods of the half year was broadly neutral in comparison to the previous year.
In the 28 weeks to 13 August 2017 hotel revenues decreased 5.1% to 8,648,145 (2016: 9,115,526). Hotel gross profit before depreciation and Group administration decreased 15.1% to 1,503,402 (2016: 1,771,160). Over the same period EBITDA (earnings before interest, tax and depreciation) decreased 19.7% to 1,119,749 (2016: 1,394,871) and operating profit decreased 31.3% to 604,556 (2016: 880,119)
Revpar (accommodation revenue per available room) decreased 4.2% with occupancy down 3.3% and average room rate down 1.0%.
Administration expenses increased 2.0% and depreciation increased 0.1% to 515,193. 
Financial charges decreased by 0.7% to 285,263 
Profit before tax was 319,293 compared to a profit of 592,807 last year; a decrease of 46.1% 
Corporation tax has been provided at an effective rate of 20%. Basic earnings per share were 1.8p compared with 3.4p in the comparative period on a weighted average of 14,012,123 (14,012,123) shares in issue.
Finance
On 19 September 2017 the Company entered into a 9,900,000 five year term loan facility with Allied Irish Bank. This facility has been used to repay the Company's existing facilities with Royal Bank of Scotland as well as the remaining balances of the Directors Loan and Loan Notes. The revised financial structure will result in a significant reduction in financial charges going forward. Savings in 2018/2019 financial year are estimated to be not less than 160,000 provided Libor remains the same as it is currently.
On 13 August 2017 net debt stood at 9,159,332 representing loans totalling 9,582,625 less 423,293 cash at bank. Gearing on Shareholders' funds was 38.0% with interest covered 2.1 times. Net debt decreased by 395,437 compared with the previous year end.
Capital expenditure
We spent 369,516 in the period (2016: 421,216), mainly on the refurbishment of three suites and the public areas at the Norfolk Royale and the refurbishment of 12 bedrooms at the King Malcolm Hotel, Dunfermline. We have completed the refurbishment of the public areas and ballroom at the Crown and Mitre in Carlisle.
We plan to spend 700,000 in this financial year on our strategy of continually improving the standards offered in our portfolio of hotels and maintaining the fabric of our buildings. This sum is in addition to a significant sum expensed to the Income Statement.
Shareholders
We are always delighted to welcome Shareholders to our Hotels where they can see for themselves the progress we have made, whilst enjoying a beneficial discount of 50% of our rack rate tariff, using a special reservations number 0207 266 1100 or e-mail info@peelhotel.com Shareholders can keep in touch with progress in the company and various promotional activities by visiting our website www.peelhotels.co.uk
The Future
The comparative shortfall in EBITDA in the first three periods will be difficult to make up by the end of the financial year however sales have now stabilised, REVPAR currently is growing (reversing the trend in the half year) and costs are under control. The ongoing diminution of financial charges will be of great benefit to the Company and net debt will continue to decrease satisfactorily whilst leaving the Company sufficient surplus cash to continue the reinvestment in its Properties.
Robert Peel
Chairman
20 October 2017


DIRECTORS AND ADVISORS
Directors
 Robert Edmund Guy Peel Executive Chairman
Nicholas David Lawton Parrish Financial Director
 Norbert Paul Gottfried Petersen Non-executive Director
 Haydn Herbert James Fentum Non-executive Director
Secretary
Thrings LLP
Kinnaird House, 1 Pall Mall East, London SW1Y 5AU
Registered Office
5th Floor, Kinnaird House, 1 Pall Mall East, London SW1Y 5AU
Company registration number 3473990
Auditor
Grant Thornton UK LLP
No. 1 Whitehall Riverside, Leeds, LS1 4BN
Bankers 
Allied Irish Bank Plc
10 Berkeley Square, Mayfair, London W1J 6AA
Registrars
Computershare Services Plc
The Pavilions, Bridgewater Road, Bristol BS13 8AE
Solicitors
Thrings LLP 
Kinnaird House, 1 Pall Mall East, London SW1Y 5AU
Stockbroker
Peel Hunt LLP
Moor House, 120, London Wall, London EC2Y 5ET


GROUP STATEMENT OF COMPREHENSIVE INCOME
for the 28 weeks ended 13 August 2017
Note

Unaudited 28 weeks ended
13/08/2017

Unaudited
28 weeks ended 14/08/2016

Audited
Year 
ended
29/01/2017
Revenue
Cost of sales

8,648,145
(7,144,743)

9,115,526
(7,344,366)

16,790,320
(13,852,109)
Gross profit
Administration expenses
Exceptional expense
Depreciation
Total admin. expenses
(383,653)
-
(515,193)
 
1,503,402
 
 (898,846)
(376,289)
-
(514,752)
1,771,160
(891,041)
(687,883)
(170,500)
(981,594)
2,938,211
(1,839,977)
Operating profit
Finance expense

604,556
(285,263)

880,119
(287,312)

1,098,234
(522,847)
Profit before tax
Income tax 4

319,293
(63,856)

592,807
(118,561)

575,387
(140,665)
Profit and total comprehensive
income for the period attributable
to owners
255,437

474,246

434,722
Earnings per share
Basic & diluted (pence) 5

1.8

3.4

3.1


GROUP STATEMENT OF CHANGES IN EQUITY
for the 28 weeks ended 13 August 2017
28 weeks ended 14 August 2016
Unaudited
Share 
Capital
Share 
Premium
Account
Profit 
and loss
account
Total
Balance brought forward
at 1 February 2016
Profit and total comprehensive income for the period
Transactions with owners
Dividend
1,401,213
-
-
9,743,495
-
-
12,620,907
474,246
(280,242)
23,765,615
474,246
(280,242)
Balance at 14 August 2014
1,401,213
9,743,495
12,814,911
23,959,619
12 months ended 29 January 2017
Audited
Share 
Capital
Share 
Premium
Account
Profit 
and loss
account
Total
Balance brought forward
at 1 February 2016
Profit and total comprehensive income for the period
Transactions with owners
Dividend
1,401,213
-
-
9,743,495
-
-
12,620,907
434,722
(280,242)
23,765,615
434,722
(280,242)
Balance at 29 January 2017
1,401,213
9,743,495
12,775,387
23,920,095
28 weeks ended 13 August 2017
Unaudited
Share 
Capital
Share 
Premium
Account
Profit 
and loss
account
Total
Balance brought forward
at 30 January 2017
Profit and total comprehensive income for the period
Transactions with owners
Dividend
1,401,213
-
-
9,743,495
-
-
12,775,387
255,437
-
23,920,095
255,437
-
Balance at 13 August 2017
1,401,213
9,743,495
13,030,824
24,175,532


GROUP BALANCE SHEET
at 13 August 2017

13/08/2017
Unaudited
14/08/2016
Unaudited
29/01/2017
Audited
Assets
Non-current assets
Property, plant and equipment
35,356,887
35,679,921
35,502,564
Total non-current assets
Current assets
Inventories
Trade and other receivables
Prepayments
Cash at bank and in hand
35,356,887
119,332
529,006
898,662
423,293
35,679,921
119,243
434,939
874,584
588,745
35,502,564
114,034
354,076
741,405
292,653
Total current assets
1,970,293
2,017,511
1,502,168
Total assets
37,327,180
37,697,432
37,004,732
Equity and liabilities
Equity attributable to owners
Share capital
Share premium
Retained earnings
1,401,213
9,743,495
13,030,824
1,401,213
9,743,495
12,814,911
1,401,213
9,743,495
12,775,387
Total equity
Liabilities
Non-current
Borrowings (due after one year)
Deferred tax liabilities
24,175,532
765,203
861,330
23,959,619
9,730,747
919,308
23,920,095
1,030,000
861,330
Non-current liabilities
Current
Trade and other payables
Borrowings (due within one year)
Current tax liabilities
1,626,533
2,583,530
8,817,422
124,163
10,650,055
2,632,973
260,000
194,785
1,891,330
2,259,437
8,817,422
116,448
Current liabilities
11,525,115
3,087,758
11,193,307
Total liabilities and equity
37,327,180
37,697,432
37,004,732


GROUP CASH FLOW STATEMENT
for the 28 weeks ended 13 August 2017

Unaudited
28 weeks
ended
13/08/2017
Unaudited
28 weeks
ended
14/08/2016
Audited
Year 
ended
29/01/2017
Cash flows from operating activities
Profit for the period
Adjustment for:
Finance expense
Income tax expense
Depreciation
255,437
285,263
63,856
515,193
474,246
287,312
118,561
514,752
434,722
522,847
140,665
981,594
Operating profit before changes in working capital and provisions
UK corporation tax paid
(Increase)/decrease in trade and other receivables
Increase in trade and other payables
Decrease in inventories
1,119,749
(56,142)
(397,013)
408,699
(5,298)
1,394,871
(69,750)
(62,327)
459,064
(6,658)
2,079,828
(228,168)
149,237
112,381
(1,449)
Net cash from operating activities
1,069,995
1,715,200
2,111,829
Cash flows from investing activities
Acquisition of property, plant and equipment
(369,516)
(421,216)
(710,701)
Net cash from investing activities
(369,516)
(421,216)
(710,701)
Cash flows from financing activities
Interest paid
Loan repayments
Equity dividends paid
(324,839)
(245,000)
-
(246,987)
(240,000)
(280,242)
(480,223)
(410,000)
(280,242)
Net cash from financing activities
(569,839)
(767,229)
(1,170,465)
Net increase in cash
and cash equivalents
130,640
526,755
230,663
Cash and cash equivalents at the 
beginning of the period
292,653
61,990
61,990
Cash and cash equivalents at the
end of the period
423,293
588,745
292,653
For the purposes of the cash flow statement, cash and cash equivalents comprise:
Cash and bank balances
423,293
588,745
292,653
NOTES TO THE INTERIM RESULTS
for the period ended 13 August 2017
1. Basis of accounting
The interim financial information for the period ended 13 August 2017 has been prepared applying the accounting policies and presentation of the Group's published consolidated financial statements for the year ended 29 January 2017.
The financial information contained in the interim report does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006 and does not include all of the information and disclosures required for complete financial statements. The financial information in the interim report does not constitute statutory accounts as defined by section 434 of the Companies Act 2006 and has not been audited or reviewed.
The financial information relating to the year ended 29 January 2017 is an extract from the latest published financial statements on which the auditor gave an unmodified report that did not contain statements under section 498(2) or 498(3) of the Companies Act 2006 and which have been filed with the Registrar of Companies.
2. Accounting policies
The condensed, consolidated financial statements in this half-yearly financial report for the period ended 13 August 2017 have been prepared in accordance with the AIM Rules for Companies and on a basis consistent with the accounting policies and methods of computation consistent with those set out in the Annual Report and financial statements for the year ended 29 January 2017, except as described below. The Group has chosen not to adopt IAS 34 'Interim Financial Statements' in preparing these interim financial statements and therefore the Interim financial information is not in full compliance with International Financial Reporting Standards. 
In preparing the condensed, consolidated financial statements, management are required to make accounting assumptions and estimates. The assumptions and estimation methods are consistent with those applied to the Annual Report and financial statements for the year ended 29 January 2017. Additionally the principal risks and uncertainties that may have a material impact on activities and results of the Group remain materially unchanged from those described in that Annual Report.
3. Post balance sheet events
On 19 September 2017 the Company entered into a 9,900,000 five year term loan facility with Allied Irish Bank. This facility has been used to repay the Company's existing facilities with Royal Bank of Scotland as well as the remaining balances of the Director's Loan and Loan Notes. The revised financial structure will result in a significant reduction in financial charges going forward
4. Taxation
Tax has been provided at a rate of 20% which represents the expected effective rate for the full year.
5. Earnings per share
Earnings per share are based on the profit after taxation and on the weighted average number of shares in issue during the period.

28 weeks 
ended
13/8/2017
Unaudited
28 weeks 
ended
14/8/2016
Unaudited
Year 
ended
29/1/2017
Audited
Average No.shares  -Basic
  -Diluted
14,012,123
14,012,123
14,012,123
14,012,123
14,012,123
14,012,123

This information is provided by RNS
The company news service from the London Stock Exchange
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