Final Results

RNS Number : 2934G

Peel Hotels PLC

05 June 2013

 

PEEL HOTELS PLC

PRELIMINARY ANNOUNCEMENT

Derived from audited results for Financial Year Ended 3 February 2013.

Highlights

·     Turnover increased 4% to £15,233,026 (2012: £14,647,126)

·     EBITDA increased 9% to £1,698,060 (2012: £1,557,655)

·     Operating Profit up 53% to £560,979 (2012: £365,630)

·     Net debt decreased £477,258

·     Loss before tax of £97,411 (2012: Loss of £227,802)

·     Earnings per share basic and diluted 0.03p (2012: 0.01p)

'The Group achieved a modest improvement in the Financial Year ended 3 February 2013. We have trimmed our overheads and hope to further improve our EBITDA in the current Year. The cost of Finance is coming down, albeit slowly but this will accelerate when the swap falls away in April 2014.'

Robert Peel                                          

Chairman

0207 286 6823

Press Enquiries

Peel Hunt Ltd / Capel Irwin

0207 418 8907

CHAIRMAN'S STATEMENT

RESULTS

The Group achieved a modest improvement in the Financial Year ended 3 February 2013 with hotel revenues increasing by 4% to £15,233,026 (2012: £14,647,126). Hotel gross profit before depreciation and Group administration increased 6.7% to £2,410,311 (2012: £2,258,536). EBITDA increased 9% to £1,698,060 (2012: £1,557,655).

Revpar (accommodation revenue per available room) increased 2.3% with occupancy flat and average room rate up 2.3%.

The pre-tax result before the fair value movement of the swap was a loss of £400,147 (2012: loss £586,375) on the same basis and exclusive of the profit on the disposal of a staff house in Wallingford in the previous year. Current tax has been provided at a rate of 24% which was the prevailing UK corporate tax rate for the period. The total tax credit of £101,563 for the year is a result of differences in tax and accounting treatment and a large reduction in the deferred tax liability of the Group as a result of changes to the prevailing UK corporate tax rate. Earnings per share on a basic and diluted basis were 0.03p (2012: 0.01p)

FINANCE

As at 3 February 2013 net debt stood at £12,366,301 representing loans totalling £12,090,770 and an overdraft of £392,085 less £116,554 cash at bank. Gearing on Shareholders' funds was 56.1% with interest covered 0.6 times. Net debt decreased by £477,258 compared with the previous year.

It is worth pointing out that the Group has decreased its net debt by £2,428,269 over the past three financial years in spite of a challenging trading environment.

Since 24 April 2002 (the date of the loan) we have paid  more than £2,750,000  additional interest than might have been the case had we not been forced into taking up the financial derivatives imposed upon us by our Bank (initially  a cap and collar and a 'roller coaster' on our loan and latterly the 'roller coaster'). This large sum of money does not include costs in relation to capping fees and the loan of more than £550,000 over the same period. The cost of buying out our swap at the year-end was £503,705 and the Board's view is still that it would make little economic sense. However they continue to monitor the situation closely. Shareholders should note that there will be a substantial decrease in financial costs in 2014/2015 and therefore a positive benefit to the profitability of the Group as the swap falls away on 11 April 2014.

During the year the Group issued £850,000 of unsecured loan notes that bear interest at 7% per annum to Robert Peel and Charles Peel. These loan notes were originally due for repayment in 2013, but subsequent to the year end and the Group's extension to its existing loan facility, the repayment date for these has been extended to December 2017.

CAPITAL EXPENDITURE

£439,308 was spent in the year mainly on the continuing refurbishment of bedrooms at the Midland Hotel, Bradford, the Bull Hotel, Peterborough, the Crown and Mitre Hotel, Carlisle and the Norfolk Royale Hotel in Bournemouth. 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 £557,048 (2012: £544,205) was spent on repairs and renewals which ensures that we continue to improve the quality of our product.

SHAREHOLDERS

Regrettably we are still unable to recommend a dividend for the year ended 3 February 2013.

We are always delighted to welcome Shareholders to our Hotels where they can see for themselves the progress we continue to make, whilst enjoying a beneficial discount. The discount for Shareholders is 50% of our rack rate tariff using the special reservations number 0207 266 1100 or e-mail [e-mail].  Shareholders can also keep in touch with progress in the Company and various promotional activities by visiting our website www.peelhotels.co.uk.

STAFF

Norbert Petersen, who has been an Executive Director since 11 September 1998, retired from his full time role at the end of the financial year but we are delighted that he has agreed to remain on the Board as a Non-executive Director.

Nick Parrish was appointed to the Board on 19 October 2012 as the Financial Director. Nick has been employed by Peel Hotels since 1998 and has thoroughly deserved his promotion.

I would like to thank Oliver Round-Turner, General Manager at the George Hotel in Wallingford and Brian Blake, Internal Auditor for the Group, most sincerely for all the hard work and loyalty they have shown the Group. On behalf of all their Colleagues and Shareholders we wish them a happy and healthy Retirement.

The Board would like to take this opportunity of thanking the Management and Staff of Peel Hotels for their contribution to the business of Peel Hotels and for the safety and wellbeing of their Guests.

THE FUTURE

Following the year end 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 four years.

Sales growth has been flat in the first quarter of the new financial year and energy costs in particular have been substantially more than in the previous year. We have trimmed our overheads and hope to further improve our EBITDA in the current year. The cost of finance is coming down slowly albeit not helped by the increasing margins levied on us by our Bankers.

The positive news is that in financial year 2014/2015 substantial on going savings will be made on the back of the swap falling away. This will dramatically improve our profitability and give us wider options in terms of increasing capital expenditure, accelerating debt repayments and paying dividends to our loyal and long suffering Shareholders.

Robert Peel

Chairman

5 June 2013

Group Statement of Comprehensive Income

for the year ended 3 February 2013

					2012		2011
					£		£
Revenue					15,233,026		14,647,126
Cost of sales					(12,822,715)		(12,388,590)
Gross profit					2,410,311		2,258,536
Administration expenses					(712,251)		(700,881)
Depreciation					(1,137,081)		(1,192,025)
Operating profit					560,979		365,630
Profit on disposal of property					-		232,766
Finance income					318		21
Finance expense					(961,444)		(952,026)
Fair value movement on derivative					302,736		125,807
(Loss) before tax					(97,411)		(227,802)
Income tax					101,563		229,590
Profit and total comprehensive income for the period attributable to owners					4,152		1,788
Earnings per share
Basic & diluted (pence)					0.03		0.01

Group statement of changes in equity

for the years ended 3 February 2013

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

Year ended 5 February 2012	Share Capital	Share premium account	Profit and loss account	Total
	£	£	£	£
Balance brought forward at 7 February 2011	1,401,213	9,743,495	10,902,946	22,047,654
Profit and total comprehensive income for the period	-	-	1,788	1,788
Balance at 5 February 2012	1,401,213	9,743,495	10,904,734	22,049,442

Group Balance Sheet

at 3 February 2013            

		2013	2012
		£	£
Assets
Non-current assets
Property, plant and equipment		37,037,546	37,735,319
Deferred tax asset		115,852	201,610
Total non-current assets		37,153,398	37,936,929
Current assets
Inventories		99,529	102,306
Trade and other receivables		1,136,554	1,215,163
Current tax asset		-	39,537
Cash at bank and in hand		116,554	42,529
Total current assets		1,352,637	1,399,535
Total assets		38,506,035	39,336,464
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		10,908,886	10,904,734
Total equity		22,053,594	22,049,442
Liabilities
Non-current
Borrowings (due after one year)		9,324,716	9,762,605
Deferred tax liabilities Derivative financial instruments		1,182,914 71,958	1,417,523 483,865
Non-current liabilities		10,579,588	11,663,993
Current
Trade and other payables		2,231,275	2,176,970
Borrowings (due within one year)		3,158,139	3,123,483
Current tax liabilities		51,692	-
Derivative financial instruments		431,747	322,576
Current Liabilities		5,872,853	5,623,029
Total liabilities and equity		38,506,035	39,336,464

Group Cash Flow Statement

for the year ended 3February 2013

		2013	2012
		£	£
Cash flows from operating activities
Profit for the year		4,152	1,788
Adjustments for:
Financial income		(318)	(21)
Financial expense		961,444	952,026
Fair value movement on derivative		(302,736)	(125,807)
Income tax income		(101,563)	(229,590)
Profit on sale of property		-	(232,766)
Depreciation		1,137,081	1,192,025
		1,698,060	1,557,655
Operating profit before changes in working capital and provisions
UK corporation tax received/(paid)		43,941	(82,331)
Decrease in trade and other receivables		78,609	13,770
Increase in trade and other payables		95,145	190,200
Decrease in inventories		2,777	4,482
Net cash from operating activities		1,918,532	1,683,776
Cash flows from investing activities
Acquisition of property, plant and equipment		(439,308)	(568,441)
Sale of property, plant and equipment		-	462,927
Net cash from investing activities		(439,308)	(105,514)
Cash flows from financing activities
Interest paid New loan		(1,001,966) 585,000	(1,004,935)  300,000
Loan repayments		(467,889)	(908,981)
Net cash from financing activities		(884,855)	(1,613,916)
Net increase/(decrease) in cash and cash equivalents		594,369	(35,654)
Cash and cash equivalents at the beginning of the period		(869,900)	(834,246)
Cash and cash equivalents at the end of the period		(275,531)	(869,900)
For the purposes of the cash flow statement, cash and cash equivalents comprise:
Cash and bank balances		116,554	42,529
Bank overdrafts		(392,085)	(912,429)

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 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 3 February 2013 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 3 February 2013 was based on the profit attributable to ordinary shareholders of £4,152 (2012: £1,788) and a weighted average number of ordinary shares outstanding of 14,012,123 (2012: 14,012,123).  No shares were issued in 2013 or 2012.

Diluted earnings per share

There were no potentially dilutive options in issue in 2013 and 2012 and consequently there is no difference between basic and diluted earnings per share.

 

END

 

 

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