Interim Results
PEEL HOTELS PLC
INTERIM RESULTS
For 28 weeks ended 17 August 2014
· Sales up 4% to £8,559,808 (2013: £8,228,186)
· EBITDA up 21.5% to £1,331,527 (2013: £1,095,519)
· Operating Profit up 47.4% to £791,498 (2013: £536,982)
· Profit before tax up to £555,419 (2013: £202,136)
· Net Debt decreased by £379,681
· Earnings per share
Basic 3.0p (2013: 1.1p)
Diluted 3.0p (2013: 1.1P)
Chairman Robert Peel said: Sustained improvement in EBITDA together with a significantly lesser financial cost has produced a creditable result in the interim period, ended 17 August 2014. There is no reason to expect this trend not to continue and therefore shareholders can expect, after several years of disappointing results, a relative improvement in the fortunes of their Company.
Press enquiries: 0207 266 1100
Nominated advisor and Broker: 0207 418 8900
Peel Hunt LLP
Capel Irwin
CHAIRMAN'S STATEMENT
In the 28 weeks to 17 August 2014 turnover was £8,559,808 (2013: £8,228,186). Over the same period EBITDA (earnings before interest, tax and depreciation) increased 21.5% to £1,331,527 and operating profit increased 47.4% to £791,498.
Revpar (accommodation revenue per available room) increased 8.3% with occupancy up 8.8% and average room rate down 0.5%.
Administration expenses increased 33.3% partly due to the Chairman being paid a salary in this financial year. The increase is also partly due to the effect of Business Rates refunds received in the previous year. Depreciation and amortisation decreased 3.3%.
Savings in financial charges through the falling away of the swap on 11 April 2014 together with less net debt produced £113,540 less finance expenses in the period under review.
Excluding the change in the fair value of the financial instrument (swap), Profit before tax increased to £396,358 from £28,302 last year.
Profit before tax was £555,419 compared to a profit of £202,136 last year.
Corporation tax has been provided at an effective rate of 25%. Basic earnings per share were 3.0p compared with 1.1p in the comparative period on a weighted average of 14,012,123 (14,012,123) shares in issue.
FINANCE
On 17 August 2014 net debt stood at £11,330,053 representing loans totalling £11,203,872 and an overdraft of £271,607 less £145,426 cash at bank. Gearing on Shareholders' funds was 49.6% with interest covered 1.1 times. Net debt decreased by £379,681 compared with the previous year end.
CAPITAL EXPENDITURE
We spent £284,021 in the period (2013: £276,226). The majority has been spent on the complete refurbishment of all the bedroom corridors at the Crown and Mitre in Carlisle. Six bedrooms have been renovated at the Bull in Peterborough now completing the refurbishment of the bedroom stock at the Hotel. We continue to improve the fabric of our product and plan to spend over £500,000 in the current financial year on capital expenditures 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 sustained improvement in EBITDA expected, when I wrote my Statement in last year's Annual Report, has eventuated. This, together with a significantly lesser financial cost has produced a creditable pre-tax Profit in the interim period, ended 17 August 2014. There is no reason not to expect this trend to continue and therefore Shareholders can expect, after several years of disappointing results, a relative improvement in the fortunes of their Group.
Robert Peel
Chairman
8 October 2014
DIRECTORS AND ADVISORS
Directors
Robert Edmund Guy Peel Executive Chairman
Nicholas David Lawton Parrish Financial Director
Clement John Govett Non-executive Director
Keith Peter Benham Non-executive Director
Norbert Paul Gottfried Petersen 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
Royal Bank of Scotland Plc
280 Bishopsgate, London EC2M 4RB
Registrars
Computershare Services Plc
PO Box No 82, The Pavilions, Bridgewater Road, Bristol BS99 7NH
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 period ended 17 August 2014
Unaudited Unaudited Audited
28 weeks ended 28 weeks ended Year ended
17/08/2014 18/08/2013 02/02/2014
Note £ £ £
Revenue 8,559,808 8,228,186 15,509,911
Cost of sales (6,877,342) (6,869,472) (12,971,447)
Gross profit 1,682466 1,358,714 2,538,464
Administration expenses (350,939) (263,195) (558,084)
Depreciation (540,029) (558,537) (1,050,753)
Operating profit 791,498 536,982 929,627
Finance income - - 414
Finance expense (395,140) (508,680) (932,822)
Fair value movement on derivative 159,061 173,834 344,644
Profit /(loss) before tax 555,419 202,136 341,863
Income tax 2 (138,855) (50,534) 47,610
Profit and total comprehensive
income for the period attributable
to owners 416,564 151,602 389,473
Earnings per share
Basic & diluted (pence) 3 3.0 1.1 2.8
GROUP STATEMENT OF CHANGES IN EQUITY
for the period ended 17 August 2014
28 weeks ended 18 August 2013
Unaudited Share Profit
Share premium and loss
Capital account 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 - - 151,602 151,602
Balance at 18 August 2013 1,401,213 9,743,495 11,060,488 22,205,196
12 months ended 2 February 2014
Share Profit
Audited Share premium and loss
Capital account 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
28 weeks ended 17 August 2014
Share Profit
Unaudited Share premium and loss
Capital account account Total
£ £ £ £
Balance brought forward
at 3 February 2014 1,401,213 9,743,495 11,298,359 22,443,067
Profit and total comprehensive
income for the period - - 416,564 416,564
Balance at 17 August 2014 1,401,213 9,743,495 11,714,923 22,859,631
GROUP BALANCE SHEET
at 17 August 2014
17/08/2014 18/08/2013 02/02/2014
Unaudited Unaudited Audited
£ £ £
Assets
Non-current assets
Property, plant and equipment 36,252,290 36,755,235 36,506,121
Deferred tax asset 31,813 115,852 31,813
Total non-current assets 36,284,103 36,871,087 36,537,934
Current assets
Inventories 106,783 107,377 108,670
Trade and other receivables 501,854 486,768 364,761
Prepayments 909,741 814,370 749,942
Cash at bank and in hand 145,426 121,897 195,015
Total current assets 1,663,804 1,530,412 1,418,388
Total assets 37,947,907 38,401,499 37,956,322
Equity and liabilities
Equity attributable to owners
Share capital 1,401,213 1,401,213 1,401,213
Share premium 9,743,495 9,743,495 9,743,495
Retained earnings 11,714,923 11,060,488 11,298,359
Total equity 22,859,631 22,205,196 22,443,067
Liabilities
Non-current
Borrowings (due after one year) 10,627,818 11,207,482 10,844,199
Deferred tax liabilities 982,306 1,182,914 982,306
Non-current liabilities 11,610,124 12,390,396 11,826,505
Current
Trade and other payables 2,408,187 2,459,160 2,383,690
Borrowings (due within one year) 847,661 914,650 1,060,550
Current tax liabilities 222,304 102,226 83,449
Derivative financial instruments - 329,871 159,061
Current liabilities 3,478,152 3,805,907 3,686,750
Total liabilities and equity 37,947,907 38,401,499 37,956,322
GROUP CASH FLOW STATEMENT
for the Period ended 17 August 2014
Unaudtied Unaudited Audited
17/08/2014 18/08/2013 02/02/2014
£ £ £
Cash flows from operating activities
Profit for the period 416,564 151,602 389,473
Adjustments for:
Finance income - - (414)
Finance expense 395,140 508,680 932,822
Fair value movement on derivative (159,061) (173,834) (344,644)
Income tax expense/(income) 138,855 50,534 (47,610)
Depreciation 540,029 558,537 1,050,753
Operating profit before changes in
working capital and provisions 1,331,527 1,095,519 1,980,380
UK corporation tax paid - - (37,202)
(Increase)/decrease in trade and other receivables (252,899) (161,812) 14,524
Increase in trade and other payables 107,390 205,919 165,423
Decrease/(increase) in inventories 1,887 (7,848) (9,141)
Net cash from operating activities 1,187,905 1,131,778 2,113,984
Cash flows from investing activities
Acquisition of property, plant and equipment (284,021) (276,226) (519,328)
Net cash from investing activities (284,021) (276,226) (519,328)
Cash flows from financing activities
Interest paid (447,557) (513,693) (1,042,552)
Loan repayments (293,027) (283,027) (566,054)
Net cash from financing activities (740,584) (796,820) (1,608,606)
Net increase /(decrease) in cash
and cash equivalents 163,300 58,832 (13,950)
Cash and cash equivalents at the
beginning of the period (289,481) (275,531) (275,531)
Cash and cash equivalents at the
end of the period (126,181) (216,699) (289,481)
For the purposes of the cash flow statement,
cash and cash equivalents comprise:
Cash and bank balances 145,426 121,897 195,015
Bank overdraft (271,607) (338,596) (484,496)
NOTES TO THE INTERIM RESULTS
for the period ended 17 August 2014
1. Basis of accounting
The interim financial information has been prepared on the basis of the recognition and measurement requirements of adopted IFRSs as at 17 August 2014 that are effective (or available for early adoption) at 1 February 2015. Based on these adopted IFRSs, the Directors have applied the accounting policies, which they expect to apply when the annual IFRS financial statements are prepared for the year ending 1 February 2015.
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.
The financial information set out in this interim report does not constitute statutory accounts as defined in sections 434 and 435 of the Companies Act 2006. The figures for the year ended 2 February 2014 have been extracted from the statutory financial statements which have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain a statement under section 498(2) and 498(3) of the Companies Act 2006.
The group's accounting policies remain as stated in the group's full annual accounts for the year ended 2 February 2014.
2. Taxation
Tax has been provided at a rate of 25% which represents the expected effective rate for the full year.
3. 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 28 weeks Year
ended ended ended
17/8/2014 18/8/2013 2/2/2014
Unaudited Unaudited Audited
Average No. shares - Basic 14,012,123 14,012,123 14,012,123
- Diluted 14,012,123 14,012,123 14,012,123
Independent review report to Peel Hotels plc
Introduction
We have been engaged by the Company to review the financial information in the half-yearly financial report for the 28 weeks ended 17 August 2014 which comprises the Group Statement of Comprehensive Income, the Group Statement of Changes in Equity, the Group Balance Sheet, the Group Cash Flow Statement, and the related notes.
We have read the other information contained in the half yearly financial report which comprises only the Chairman's Statement and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the Company's members, as a body, in accordance with guidance contained in ISRE (UK and Ireland) 2410, 'Review of Interim Financial Information performed by the Independent Auditor of the Entity'. Our review work has been undertaken so that we might state to the Company those matters we are required to state to them in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our review work, for this report, or for the conclusion we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The AIM rules of the London Stock Exchange require that the accounting policies and presentation applied to the financial information in the half-yearly financial report are consistent with those which will be adopted in the annual accounts having regard to the accounting standards applicable for such accounts.
As disclosed in Note 1, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The financial information in the half-yearly financial report has been prepared in accordance with the basis of preparation in Note 1.
Our responsibility
Our responsibility is to express a conclusion on the financial information in the half-yearly financial report based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the financial information in the half-yearly financial report for the 28 weeks ended 17 August 2014 is not prepared, in all material respects, in accordance with the basis of accounting described in Note 1.
GRANT THORNTON UK LLP
AUDITOR
LEEDS
08 October 2014
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