Final Results - Year Ended 20 February 2000
Peel Hotels PLC
12 April 2000
PEEL HOTELS PLC
AUDITED RESULTS
FINANCIAL YEAR ENDING 20 FEBRUARY 2000
Turnover up 121% to £7,364,987 (1999: £3,332,727)
Operating Profit up 101% to £2,012,379 (1999: £1,001,743)
Profits before tax up 93% to £1,452,755 (1999: £754,264)
Earnings per share:
Basic 13.6p (1999: 10.0p)
Diluted 12.2p (1999: 8.0p)
Purchase of two hotels at a cost of £8,750,000
Significant reinvestment in owned hotels of £1,931,968
(1999: £535,947)
Dividend 2p per share (1999: l p)
Solid progress has been achieved in the second year of the company's
trading history and Peel Hotels has a good platform for further
growth in the forthcoming year.
Robert Peel
Chairman
Press enquiries to Robert Peel - 020 7266 1100
PEEL HOTELS PLC
CHAIRMAN'S STATEMENT
Results
I am pleased to report solid progress for the year ended 20 February 2000.
Pre-tax profits increased 92.6% to £1,452,755 from £754,264. After a full
tax provision of 30%, earnings per share were 13.6p basic and 12.2p on a
diluted basis, an uplift of 36% and 53% respectively on the previous year.
This has been achieved against a relatively flat U.K. hotel trading
environment during the year.
As at 20 February 2000, net debt stood at £10,982,242 representing ten year
loans totalling £10,406,111 and an overdraft of £658,651, less £82,520 cash
at bank. Gearing on shareholders' funds was 133% with interest covered 3.6
times.
Profit before interest and tax increased 101% to £2,012,379 from
£1,001,743.
The board has recommended doubling the dividend from lp to 2p per share,
amounting to £173,333 which will be paid on 16 June 2000 to shareholders on
the register at 19 May 2000.
For the year as a whole, our 'Revpar' (accommodation revenue per available
room) increased by 9.5% on the previous year and further progress was made
in terms of cost and margin improvement. We incurred significant capital
expenditure improving the quality of our portfolio, with a view to bringing
each hotel up to the standards expected from four-star hotels.
Events
On 6 September 1999, the company raised £3.9 million through a
placing and open offer by its broker, Peel Hunt plc., of 2,166,666 new
ordinary shares at £1.80 per share, to purchase the Golden Lion Hotel,
Leeds; Aire House, an office block adjacent to the Golden Lion, and the
Caledonian Hotel, Newcastle. The balance of the overall consideration of
£9.65 million was financed by a £7 million ten-year secured loan facility
from the Royal Bank of Scotland Plc, which included finance to fund the
development of Aire House. This development will constitute a 27-bedroom
extension to the 89-bedroom Golden Lion. On 20 December 1999, we opened a
new 2,079 square foot bar on the ground floor of Aire House called Hakuna
Matata, which is currently operating as a 'Sportsbar' from 4.00 pm to 11.00
pm. Application has been made for a late music and dancing licence at the
weekends and if successful will enable us to benefit from the demand for
late night entertainment in Leeds. We will shortly open from 10.00 am to
4.00 pm providing food and drink. Planning permission has been granted and
building has commenced to construct a 15-room extension to the Bull Hotel,
Peterborough. Work is expected to be completed in July 2000.
Since the year-end, planning permission has been granted for the 27-bedroom
extension to the Golden Lion Hotel, Leeds in Aire House. The company now
owns four city centre hotels with a total of 371 bedrooms and the
additional 42 rooms will give us an average of over 100 rooms per hotel,
whilst increasing our room stock by over 11%.
Capital Expenditure
Excluding the purchase of the two hotels and Aire House, a sum of
£1,931,968 was spent in the year, primarily at the Midland Hotel, Bradford,
where all the public areas have been totally renovated, four 'state of the
art' conference rooms have been created and three new training rooms have
been added. The hotel's night club and two ballrooms have also been
refurbished. The renovation of the public areas at the Bull in Peterborough
has been completed and as stated previously, a start has been made on the
hotel's 15-bedroom extension. 56 bedrooms have been refurbished at the
Golden Lion in Leeds, which now means that all 89 bedrooms in the hotel
have been refurbished within the past two years, enabling us to offer a
high standard product in a city currently enjoying a buoyant market.Our
capital expenditure is targeted to expand the potential of our well located
hotels and equally to bring all our hotels up to the requirements of a
quality four star product. This will enable us to increase Revpar and
consequently profit, whilst improving the value and desirability of our
assets.
Finance
As reported in our interim statement in October, following the acquisition
of the Golden Lion, Leeds, Aire House and the Caledonian, Newcastle, the
board decided it would be prudent to cap the exposure of the company's
borrowings to rising interest rates. This has been achieved in such a way
that £7 million of the borrowings have effectively become, at worst, a
ten-year fixed rate loan at approximately 8.5% including margin, while in
certain circumstances, such as those currently prevailing, the rate will be
less than this.
Grace Hotels Management Contract
The Company now manages 22 hotels on behalf of Grace Hotels Ltd, five of
the original 29 have been sold to third parties during the year and two,
the Golden Lion, Leeds and the Caledonian, Newcastle were bought by Peel
Hotels PLC.
The contract signed on 5 October 1998 is for a minimum of two years with
various options to extend.
Shareholders
The financial welfare of our shareholders is of paramount importance and
the prime objective of the company is to maximise shareholder value by
focusing on earnings per share growth, consistently applying a full tax
charge. This measurement overwhelmingly dictates the scope for any
potential expansionary moves. The company is fortunate in having organic
growth opportunities with its existing portfolio to afford further progress
in the forthcoming year and at the same time opportunities for further
acquisitions are being regularly reviewed in order to seek out good value,
with growth potential, that fall within the board's overall strategy. We
also aim to benefit shareholders through our Shareholder Discount Scheme.
All Shareholders are entitled to a 20% discount on listed tariff, using a
special reservations number: 020 7266 1100. Shareholders can identify the
properties we own and manage using the Directory at the back of the Annual
Report. We do hope you will visit our hotels.
Staff
The board would like to thank all our management and staff for a job well
done and the commitment and enthusiasm they have shown to the progress of
the company during the year. It is very gratifying to see that happy,
motivated staff translate into satisfied guests who seek out and appreciate
those hotels that can offer real care, friendliness and value.
The Future The capital spent in 1999 and new bedroom stock coming on line
later in 2000, will give us a good platform for growth in the forthcoming
year. We are continually looking for opportunities where we can add value
and thereby achieve superior returns for our shareholders whilst
concentrating on extracting every ounce of value from our existing hotels.
Robert Peel
Chairman
PROFIT & LOSS ACCOUNT
For the financial year ended 20 February 2000
Continuing Acquired
operations operations
Note 20/02/2000 20/02/2000 20/02/2000 21/02/1999
Turnover 5,992,435 1,372,552 7,364,987 3,332,727
Cost of sales (3,838,904) (823,712) (4,662,616) (2,034,249)
Gross profit 2,153,531 548,840 2,702,371 1,298,478
Administrative (689,992) - (689,992) (296,735)
expenses
Operating profit 1,463,539 548,840 2,012,379 1,001,743
Interest payable
&
similar charges (559,624) (247,479)
Profit on
ordinary
activities before 1,452,755 754,264
taxation
Taxation (435,826) (226,279)
Profit on
ordinary
activities after 1,016,929 527,985
taxation
Dividend 1 (173,333) (65,000)
Profit retained 843,596 462,985
Earnings Per 2
Share
Basic 13.6p 10.0p
Diluted 12.2p 8.0p
There are no recognised gains and losses
other than as stated above.
Accordingly, no statement of total
recognised gains and losses is given.
The comparative period was from 12 March
1998, when trading commenced to
21 February 1999.
BALANCE SHEET
As at 20 February 2000
20/02/2000 21/02/1999
Fixed assets
Tangible assets 20,278,051 8,839,363
Current assets
Stocks 69,481 70,329
Debtors 751,649 450,905
Cash at bank and in hand 82,520 182,463
903,650 703,697
Creditors (due within one year) (2,735,484) (1,230,458)
Net current liabilities (1,831,834) (526,761)
Total assets less current 18,446,217 8,312,602
liabilities
Creditors (due after one year) (9,812,361) (4,588,125)
Provision for liabilities & (396,578) (100,958)
charges
Net assets 8,237,278 3,623,519
Capital and reserves
Called up share capital 866,667 650,000
Share premium account 6,064,030 2,510,534
Profit and loss account 1,306,581 462,985
Equity shareholders' funds 8,237,278 3,623,519
Approved by the board on 11 April
2000
Robert Peel, Director
John Perkins, Director
CASH FLOW STATEMENT
For the financial year
ended 20 February 2000
20/02/2000 21/02/1999
Note
Net cash inflow from
operating activities 3 2,246,027 1,154,894
Returns on investments
& servicing of finance
Interest paid (605,590) (232,176)
Net cash outflow from
returns on investments
and servicing of finance (605,590) (232,176)
Taxation
UK corporation tax paid (25,559)
Tax paid (25,559)
Capital expenditure
Purchase of tangible
fixed assets (2,897,121) (8,903,553)
Net cash outflow from
capital expenditure (2,897,121) (8,903,553)
Acquisitions and (8,750,000)
disposals
Equity dividend paid (65,000)
Net cash outflow
before financing (10,097,243) (7,980,835)
Financing
Issue of ordinary share 3,770,163 3,160,534
capital
New long term loans 5,590,000 4,631,250
New short term loans 350,000 243,750
Loan repayments (243,750) -
Net cash inflow from 9,466,413 8,035,534
financing
(Decrease)/ increase in (630,830) 54,699
cash 4
Reconciliation of net
debt
(Decrease)/Increase in (630,830) 54,699
cash
Increase in debt (5,574,236) (4,831,875)
Movement in net debt in (6,205,066) (4,777,176)
the year
Net debt at beginning of (4,777,176)
year
Net debt at end of year 4 (10,982,242) (4,777,176)
NOTES
For the financial year ended 20
February 2000
2000 1999
1.Dividend proposed
Final proposed dividend of 2p per 173,333 65,000
share (1999 1p)
2.Earnings per share
Basic
Calculated on average number of shares 7,494,047 5,262,428
in issue
during the year and on the profit £1,016,929 £527,985
after taxation
Diluted
Calculated on average of maximum 8,347,311 6,562,138
number of shares
available during the year and on the £1,016,929 £527,985
profit after taxation
In calculating the diluted earnings per share, the weighted
average number
of shares is adjusted for the dilutive effect of the share
options by 701,230
(1999 1,052,600) and the warrants by 152,034 (1999 247,110)
giving an adjusted
number of shares of 8,347,311.
3.Reconciliation of operating profit to
net
cash inflow from operating activities
Operating profit 2,012,379 1,001,743
Depreciation 208,433 64,190
Decrease (increase) in stocks 848 (70,329)
Increase in debtors (287,427) (444,482)
Increase in creditors 311,794 603,772
Net cash inflow from operating 2,246,027 1,154,894
activities
At beginning of year Cash flow At end of year
4.Analysis of net
debt
Cash at bank and in 182,463 (99,943) 82,520
hand
Bank overdrafts (127,764) (530,887) (658,651)
54,699 (630,830) (576,131)
Debt due within one (243,750) (350,000) (593,750)
year
Debt due after one (4,588,125) (5,224,236) (9,812,361)
year
Tota1 (4,777,176) (6,205,066) (10,982,242)
5.Accounting Policies
This announcement is prepared on the basis of accounting policies as
stated in the financial statements for the year ended 20 February 2000.
6.The financial information set out above does not constitute the company's
statutory accounts for the year ended 20 February 2000 but is derived from
those accounts.Statutory accounts for the year ended20 February 2000 will be
delivered to the Registrar of Companies following the company's Annual G
General Meeting. The auditors have reported on the accounts; their report was
unqualified and did not contain statements under section 237 (2) or (3) of
the Companies Act 1985.
7.The annual report for the year ended 20 February 2000 will be posted to
shareholders no later than 20 April 2000.
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