Preliminary Results

RNS Number : 1355H

Peel Hotels PLC

15 May 2014

 



PEEL HOTELS PLC

PRELIMINARY ANNOUNCEMENT

Derived from audited results for Financial Year Ended 2 February 2014.

HIGHLIGHTS

#              Turnover increased 1.8% to £15,509,911 (2013: £15,233,026)

#              EBITDA increased 16.6% to £1,980,380 (2013: £1,698,060)

#              Operating Profit up 65.7% to £929,627 (2013: £560,979)

#              Net debt decreased £656,567

#              Profit before tax £341,863 (2013: Loss of £97,411)

#              Earnings per share basic and diluted 2.78p (2013: 0.03p)

'We hope to sustain improvements in EBITDA growth on the back of a slowly recovering market place and this, together with lower finance costs, should transform the profitability of the Group giving us options in terms of reappearing on the Dividend list, increased capital expenditure and further debt repayments'.

Robert Peel                                          

Chairman

0207 286 6823

Press Enquiries

Peel Hunt LLP / Capel Irwin

0207 418 8907

Review of the business

RESULTS

The Group achieved a modest improvement in the Financial Year ended 2 February 2014 with hotel revenues increasing by 1.8% to £15,509,911 (2013: £15,233,026). Hotel gross profit before depreciation and Group administration increased 5.3% to £2,538,464 (2013: £2,410,311). EBITDA increased 16.6% to £1,980,380 (2013: £1,698,060).

FINANCE

As at 2 February 2014 net debt stood at £11,709,734 (2013: £12,366,301) representing loans totalling £11,420,253 (2013:£12,090,770) and an overdraft of £484,496(2013:£392,085) less £195,015 (2013:£116,554) cash at bank. Gearing on Shareholders' funds was 52.2% with interest covered 0.99 times. Net debt decreased by £656,567 compared with the previous year.

It is worth pointing out that, in spite of the onerous fixed interest swap at 5.83% plus margin of 3% on the majority of our debt costing an additional of £352,000 in interest this year alone and in spite of a challenging trading environment, the Group has decreased its net debt by £3,084,836 over the past four financial years.

During the year the Group agreed to an extension to its existing bank loan facility with the Royal Bank of Scotland (which was due to expire on 1 June 2014). This agreement extended the loan facility (at the same level of borrowings and repayment terms as previously) until 31 August 2017. This extension provides the Group with greater certainty with regard to its financial structure going forward over the next three years.

During the year the £850,000 of unsecured loan notes that bear interest at 7% per annum to Robert Peel and Charles Peel, which were originally due for repayment in 2013, had the repayment date extended to December 2017.

Following the expiry of the fixed interest swap on 11 April 2014 Shareholders should note that there will be a substantial decrease in financial costs in 2014/15 and therefore a positive benefit to the profitability of the Group.

CAPITAL EXPENDITURE

£519,328 was spent in the year mainly on the continuing refurbishment of bedrooms at the Bull Hotel, Peterborough, Midland Hotel, Bradford, the Cosmopolitan Hotel, Leeds and the reception hall at the Caledonian Hotel, Newcastle. We have also resurfaced the car park at the Crown and Mitre Hotel, Carlisle. The Automobile Association product and service percentages for each of our hotels continue to improve which is very encouraging.

In addition to the capital expenditure a further £576,192 (2013: £557,048) was spent on repairs and renewals which ensures that we continue to improve the quality of our product.

Group Statement of Comprehensive Income

for the year ended 2 February 2014

					2014		2013
					£		£
Revenue					15,509,911		15,233,026
Cost of sales					(12,971,447)		(12,822,715)
Gross profit					2,538,464		2,410,311
Administration expenses				(558,084)		(712,251)
Depreciation				(1,050,753)		(1,137,081)
Total administration expenses					(1,608,837)		(1,849,332)
Operating profit					929,627		560,979
Finance income					414		318
Finance expense					(932,822)		(961,444)
Fair value movement on derivative					344,644		302,736
Profit/(loss) before tax					341,863		(97,411)
Income tax					47,610		101,563
Profit and total comprehensive income for the period attributable to owners					389,473		4,152
Earnings per share
Basic & diluted (pence)					2.78		0.03

Group statement of changes in equity

for the years ended 2 February 2014 and 3 February 2013

Year ended 2 February 2014	Share Capital	Share premium account	Profit and loss account	Total
	£	£	£	£
Balance brought forward at 4 February 2013	1,401,213	9,743,495	10,908,886	22,053,594
Profit and total comprehensive income for the period	-	-	389,473	389,473
Balance at 2 February 2014	1,401,213	9,743,495	11,298,359	22,443,067

Year ended 3 February 2013	Share Capital	Share premium account	Profit and loss account	Total
	£	£	£	£
Balance brought forward at 6 February 2012	1,401,213	9,743,495	10,904,734	22,049,442
Profit and total comprehensive income for the period	-	-	4,152	4,152
Balance at 3 February 2013	1,401,213	9,743,495	10,908,886	22,053,594

Group Balance Sheet

at 2 February 2014            

		2014	2013
		£	£
Assets
Non-current assets
Property, plant and equipment		36,506,121	37,037,546
Deferred tax asset		31,813	115,852
Total non-current assets		36,537,934	37,153,398
Current assets
Inventories		108,670	99,529
Trade and other receivables		1,114,703	1,136,554
Cash and cash equivalents		195,015	116,554
Total current assets		1,418,388	1,352,637
Total assets		37,956,322	38,506,035
Equity and liabilities
Equity attributable to owners of the parent
Share capital		1,401,213	1,401,213
Share premium		9,743,495	9,743,495
Retained earnings		11,298,359	10,908,886
Total equity		22,443,067	22,053,594
Liabilities
Non-current
Borrowings		10,844,199	9,324,716
Deferred tax liabilities		982,306	1,182,914
Derivative financial instruments		-	71,958
Non-current liabilities		11,826,505	10,579,588
Current
Trade and other payables		2,383,690	2,231,275
Borrowings		1,060,550	3,158,139
Current tax liabilities		83,449	51,692
Derivative financial instruments		159,061	431,747
Current Liabilities		3,686,750	5,872,853
Total liabilities and equity		37,956,322	38,506,035

Group Cash Flow Statement

for the year ended 2 February 2014

		2014	2013
		£	£
Cash flows from operating activities
Profit for the year		389,473	4,152
Adjustments for:
Financial income		(414)	(318)
Financial expense		932,822	961,444
Fair value movement on derivative		(344,644)	(302,736)
Income tax		(47,610)	(101,563)
Depreciation		1,050,753	1,137,081
Cash flows before changes in working capital and provisions		1,980,380	1,698,060
UK corporation tax (paid)/received		(37,202)	43,941
Decrease in trade and other receivables		14,524	78,609
Increase in trade and other payables		165,423	95,145
(Increase)/decrease in inventories		(9,141)	2,777
Net cash from operating activities		2,113,984	1,918,532
Cash flows from investing activities
Acquisition of property, plant and equipment		(519,328)	(439,308)
Net cash from investing activities		(519,328)	(439,308)
Cash flows from financing activities
Interest paid		(1,042,552)	(1,001,966)
New loans		-	585,000
Loan repayments		(566,054)	(467,889)
Net cash from financing activities		(1,608,606)	(884,855)
Net (decrease)/increase in cash and cash equivalents		(13,950)	594,369
Cash and cash equivalents at the beginning of the period		(275,531)	(869,900)
Cash and cash equivalents at the end of the period		(289,481)	(275,531)
For the purposes of the cash flow statement, cash and cash equivalents comprise:
Cash and bank balances		195,015	116,554
Bank overdrafts		(484,496)	(392,085)

Notes

(forming part of the financial statements)

 1          Basis of preparation

 
The financial statements, from which this preliminary announcement has been extracted, have been prepared and approved by the Directors in accordance with International Financial Reporting Standards as adopted by the EU ("Adopted IFRSs").  The financial statements have been prepared under the historical cost convention, except for derivative financial instruments which are included at their fair value.

The IFRS accounting policies have been applied consistently to all periods presented in these financial statements. The financial statements are presented in sterling.
 
2          Publication of non-statutory financial statements

 
The financial information set out in this preliminary announcement does not constitute statutory accounts as defined in Section 434 and 435 of the Companies Act 2006.
The group statement of comprehensive income, the group statement of changes in equity, the group balance sheet and the group cash flow statement have been extracted from the Group's financial statements for the year ended 2 February 2014 upon which the auditors' opinion is unqualified and does not include any statement under section 498(2) or 498(3) of the Companies Act 2006. Those financial statements have not yet been delivered to the Registrar.

3         Earnings per share

Basic earnings per share

The calculation of basic earnings per share at 2 February 2014 was based on the profit attributable to ordinary shareholders of £389,473 (2013: £4,152) and a weighted average number of ordinary shares outstanding of 14,012,123 (2013: 14,012,123).  No shares were issued in 2014 or 2013.

Diluted earnings per share

There were no potentially dilutive options in issue in 2014 and 2013 and consequently there is no difference between basic and diluted earnings per share.

 

END

 

 

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