REG - Peel Hotels PLC - Interim Results

Peel HuntAnnouncement

18/10/2018 07:05

RNS Number : 3924E
Peel Hotels PLC
18 October 2018
 


 
PEEL HOTELS PLC
 
 
INTERIM RESULTS
 
 
For 28 weeks ended 12 August 2018
 
 
·         Sales decreased 6.4% to £8,096,128 (2017: £8,648,145)
 
 
·         Operating Profit decreased 63.4% to £221,498 (2017: £604,556)
 
 
·         Revpar decreased 3.1%. Occupancy down 6.4%, average room rate up 3.5%
 
 
·         Profit before tax decreased to £8,972 (2017: £319,293)
 
 
·         Net Debt increased by £406,048  (timing difference)
 
 
·         Earnings per share
 
                                      Basic     0.1p      (2017: 1.8p)
                                      Diluted  0.1p      (2017: 1.8P)
 
 
 
Chairman Robert Peel said  '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 and for the first time in many periods increased in the current period, ended 07 October 2018. EBITDA is broadly neutral from a comparative point of view over the last three periods to 07 October 2018.
If we can consistently achieve increases in sales, our profits will quickly return to growth. We have recently signed up a marketing agreement with Best Western Hotels and hope to derive additional sales benefit from this partnership going forward.'
 
 
Press enquiries:                             0207 266 1100
Nominated advisor and Broker:    0207 418 8900
Peel Hunt LLP
Capel Irwin
 
 
CHAIRMAN'S STATEMENT
 
 
Results
In the 28 weeks to 12 August 2018 hotel revenues decreased 6.4% to £8,096,128 (2017: £8,648,145). Hotel gross profit before depreciation and Group administration decreased 33.9% to £994,067 (2017: £1,503,402).  Over the same period EBITDA (earnings before interest, tax and depreciation) decreased 42.0% to £649,534 (2017: £1,119,749) and operating profit decreased 63.4% to £221,498 (2017: £604,556).
Revpar (accommodation revenue per available room) decreased 3.1% with occupancy down 6.4% and average room rate up 3.5%.
Administration expenses decreased 10.2% to £344,533 and depreciation decreased 16.9% to £428,036. 
Financial charges decreased by 25.5% to £212,526.
Profit before tax was £8,972 compared to a profit of £319,293 last year.
Corporation tax has been provided at an effective rate of 19%. Basic earnings per share were 0.1p compared with 1.8p in the comparative period on a weighted average of 14,012,123 (14,012,123) shares in issue.
We referred in the Annual Report to the continuing slowdown in demand in the majority of Provincial areas of the United Kingdom and that, together with upward pressure from increases in living wages, business rates and energy has created challenges to the profitability of the Group. 64% of the £470,215 shortfall in EBITDA occurred in the first three Periods of the current financial year clearly illustrating the operational gearing of our business.
We decreased our overall wage costs and Group overheads and benefited from a £72,737 reduction in finance costs in the period.
Finance
 
On 12 August 2018 net debt stood at £8,859,610 representing loans totalling £9,514,534 less £654,924 cash at bank. Gearing on Shareholders' funds was 38.4% with interest covered 1.04 times. Net debt increased by £406,048 compared with the previous year end, due to timing differences.
As previously reported in our Annual Report, on 22 April 2018 the Company breached its financial covenants, which breach resulted in the Company's Bank issuing a "Reservation of Rights" letter, reserving the Bank's position in relation to the breach of covenant, whilst also confirming the Bank's current intention not to exercise any of its rights in relation to the breach. As a result of the breach the borrowings of the Group are presented on the Group balance sheet as current liabilities.
Whilst your Directors recognise that the breach of covenant, combined with a challenging trading outlook, results in material uncertainty for the Company, and increases the possibility that the Company may be unable to continue realizing its assets and discharging its liabilities in the normal course of business which might impact upon the Company's ability to continue as a going concern, they are confident that the Company has adequate resources to meet its commitments.
Capital expenditure
 
We spent £151,885 in the period (2017: £369,516). We plan to spend a total of £500,000 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 on repairs and renewals.
 
 
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 and for the first time in many periods increased in the current period, ended 07 October 2018. EBITDA is broadly neutral from a comparative point of view over the last three periods to 07 October 2018.
 
We have recently signed up a marketing agreement with Best Western Hotels and hope to derive additional sales benefit from this partnership going forward. If we can consistently achieve sales growth our profits will quickly return to growth.
 
 
Robert Peel
Chairman
18 October 2018
 
 
 
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
20 St Andrew Street, London EC4A 3AG
Registered Office
7th Floor, 20 St Andrew Street, London EC4A 3AG
Company registration number 3473990
Auditor
Grant Thornton UK LLP
No. 1 Whitehall Riverside, Leeds, LS1 4BN
Bankers    
Allied Irish Bank Plc
Berkeley Square, Mayfair, London W1J 6AA
Registrars
Computershare Services Plc
The Pavilions, Bridgewater Road, Bristol BS13 8AE
Solicitors
Thrings LLP
20 St Andrew Street, London EC4A 3AG
Stockbroker
Peel Hunt LLP
Moor House, 120, London Wall, London EC2Y 5ET
 
 
 
 
 
GROUP STATEMENT OF COMPREHENSIVE INCOME
for the 28 weeks ended 12 August 2018
 




 
 
 
 
Note


 


Unaudited 28 weeks ended
12/08/2018
£


 


Unaudited
28 weeks ended 13/08/2017
£


 


Audited
Year
ended
28/01/2018
£




Revenue
 
Cost of sales


 


8,096,128
 
(7,102,061)


 


8,648,145
 
(7,144,743)


 


16,097,313
 
(13,588,380)




 
Gross profit
 
Administration expenses
Exceptional expense
Depreciation
 
Total admin. expenses


 
 
 
(344,533)
             -
(428,036)
                    
 


 
994,067
 
 
               
   (772,569)


 
 
 
(383,653)
-
(515,193)
 
 


 
1,503,402
 
 
 
 
 
(898,846)


 
 
 
(675,322)
(1,161,241)
(940,496)
 
 


 
2,508,933
 
 
 
 
 
(2,777,059)




Operating profit
 
Finance expense


 


221,498
 
(212,526)


 


604,556
 
(285,263)


 


(268,126)
 
(466,860)




Profit before tax
 
Income tax                        3


 


8,972
 
(1,705)


 


319,293
 
(63,856)


 


(734,986)
 
(109,286)




 
Profit and total comprehensive
income for the period attributable
to owners


 
 
 
7,267


 


 
 
 
255,437


 


 
 
 
(844,272)




 
Earnings per share
Basic & diluted (pence)    4


 


 
 
0.1


 


 
 
1.8


 


 
 
(6.0)




 
GROUP STATEMENT OF CHANGES IN EQUITY
for the 28 weeks ended 12 August 2018
 




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




 
12 months ended 28 January 2018
 
Audited


 
 
 
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
 
(844,272)
 
-


 
23,920,095
 
(844,272)
 
-




Balance at 28 January 2018


1,401,213


9,743,495


11,931,115


23,075,823




 
28 weeks ended 12 August 2018
 
Unaudited


 
 
 
Share
Capital
£


 
 
Share
Premium
Account
£


 
 
Profit
and loss
account
£


 
 
 
 
Total
£




Balance brought forward
at 29 January 2018
Profit and total comprehensive income for the period
Transactions with owners
Dividend


 
1,401,213
 
-
 
-


 
9,743,495
 
-
 
-


 
11,931,115
 
7,267
 
-


 
23,075,823
 
7,267
 
-




Balance at 13 August 2017


1,401,213


9,743,495


11,938,382


23,083,090




 
 
GROUP BALANCE SHEET
at 12 August 2018




 


12/08/2018
Unaudited
£


13/08/2017
Unaudited
£


28/01/2018
Audited
£




Assets
Non-current assets
Property, plant and equipment


 
 
33,830,224


 
 
35,356,887


 
 
34,106,375




Total non-current assets
 
Current assets
Inventories
Trade and other receivables
Prepayments
Cash at bank and in hand


33,830,224
 
 
105,845
400,086
836,567
654,924


35,356,887
 
 
119,332
529,006
898,662
423,293


34,106,375
 
 
109,271
276,988
568,070
1,287,277




 
Total current assets


 
1,997,422


 
1,970,293


 
2,241,606




 
Total assets


 
35,827,646


 
37,327,180


 
36,347,981




 
Equity and liabilities
Equity attributable to owners
Share capital
Share premium
Retained earnings


 
 
 
1,401,213
9,743,495
11,938,382


 
 
 
1,401,213
9,743,495
13,030,824


 
 
 
1,401,213
9,743,495
11,931,115




 
Total equity
 
Liabilities
Non-current
Borrowings (due after one year)
Deferred tax liabilities


 
23,083,090
 
 
 
-
824,009


 
24,175,532
 
 
 
765,203
861,330


 
23,075,823
 
 
 
9,240,839
824,009




 
Non-current liabilities
 
Current
Trade and other payables
Borrowings (due within one year)
Current tax liabilities


 
824,009
 
 
2,333,394
9,514,534
72,619


 
1,626,533
 
 
2,583,530
8,817,422
124,163


 
10,064,848
 
 
2,636,396
500,000
70,914




Current liabilities


11,920,547


11,525,115


3,207,310




Total liabilities and equity


35,827,646


37,327,180


36,347,981




 
 
GROUP CASH FLOW STATEMENT
for the 28 weeks ended 12 August 2018




 


Unaudited
28 weeks
ended
12/08/2018
£


Unaudited
28 weeks
ended
13/08/2017
£


Audited
Year
ended
28/01/2018
£




Cash flows from operating activities
Profit for the period
 
Adjustment for:
Finance expense
Income tax expense
Depreciation


 
7,267
 
 
212,526
1,705
428,036


 
255,437
 
 
285,263
63,856
515,193


 
(844,272)
 
 
466,860
109,286
2,101,737




 
Cash flows before changes in working capital and provisions
 
UK corporation tax paid
(Increase)/decrease in trade and other receivables
(Decrease)/increase in trade and other payables
Decrease/(increase) in inventories


 
 
649,534
 
-
(391,595)
(317,591)
3,426


 
 
1,119,749
 
(56,142)
(397,013)
408,699
(5,298)


 
 
1,833,611
 
(192,142)
383,811
437,903
4,763




Net cash from operating activities


(56,226)


1,069,995


2,467,946




 
Cash flows from investing activities
Acquisition of property, plant and equipment


 
 
(151,885)


 
 
(369,516)


 
 
(705,548)




Net cash from investing activities


(151,885)


(369,516)


(705,548)




 
Cash flows from financing activities
Interest paid
New loan
Loan repayments


 
 
(174,242)
-
(250,000)


 
 
(324,839)
-
(245,000)


 
 
(661,192)
9,740,840
(9,847,422)




Net cash from financing activities


(424,242)


(569,839)


(767,774)




 
Net (decrease)/increase in cash
and cash equivalents


 
 
(632,353)


 
 
130,640


 
 
994,624




 
Cash and cash equivalents at the
beginning of the period


 
 
1,287,277


 
 
292,653


 
 
292,653




 
Cash and cash equivalents at the
end of the period


 
 
654,924


 
 
423,293


 
 
1,287,277




 
For the purposes of the cash flow statement, cash and cash equivalents comprise:
 
Cash and bank balances
 


 
 
 
 
654,924
 


 
 
 
 
423,293
 


 
 
 
 
1,287,277
 




 
 
 
 
 
NOTES TO THE INTERIM RESULTS
for the period ended 12 August 2018
 
1. Basis of accounting
 
The interim financial information for the period ended 12 August 2018 has been prepared applying the accounting policies and presentation of the Group's published consolidated financial statements for the year ended 28 January 2018.
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 28 January 2018 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. The auditor's opinion, whilst unmodified, included an emphasis of matter in relation to going concern.
 
 
2. Accounting policies
 
The condensed, consolidated financial statements in this half-yearly financial report for the period ended 12 August 2018 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 28 January 2018, 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 28 January 2018, except for the adoption of IFRS 15 "Revenue from Contracts with Customers" and IFRS 9 "Financial Instruments". The Directors have concluded that the adoption of these accounting standards has not had a material impact on the financial statements. The Group's accounting policies are based on the recognition and measurement principles of International Financial reporting Standards as adopted by the EU. 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. Taxation
Tax has been provided at a rate of 19% which represents the expected effective rate for the full year. 
4. 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
 12/8/2018
Unaudited


28 weeks
ended
 13/8/2017
Unaudited


Year
ended
 28/1/2018
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 news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
END
 
 
IR MRBATMBTBBMP