Final Results

RNS Number : 8100H

Peel Hotels PLC

02 August 2019

 

                          PEEL HOTELS PLC

DELISTING FROM AIM

PRELIMINARY ANNOUNCEMENT

PUBLICATION OF REPORT AND ACCOUNTS AND RESTORATION OF TRADING

NOTICE OF 2019 AGM

Peel Hotels PLC announces that, as a result of a review of the benefits and drawbacks of being a listed company, the Board has concluded that the cancellation of admission of its Ordinary Shares to trading on AIM ("Cancellation") is in the best interests of the Company and its Shareholders as a whole.

The Company therefore confirms its intention to seek Shareholder's approval for the Cancellation, as referred to in its announcement made on 26 July 2019. An explanatory circular is being posted to Shareholders (the "Circular") setting out the background to and reasons for the Cancellation, the reasons why the Directors believe that this is in the best interests of the Company and its Shareholders as a whole and their recommendation to Shareholders to vote in favour of the resolution to approve the Cancellation (the "Resolution").

The Company will seek Shareholders' approval of the Cancellation at the Company's 2019 Annual General Meeting.

The Directors have also concluded that it is in the best interests of the Company and its Shareholders for the Company to re-register as a private company and adopt the New Articles following the Cancellation (the "Re-Registration"). The Re-Registration is conditional upon the Cancellation becoming effective and the approval of not less than 75 per cent. of the votes cast by Shareholders (whether present in person or by proxy) at the Annual General Meeting.

Subject to the Resolution being passed at the Annual General Meeting, the expected last day of dealings in Ordinary Shares on AIM will be 26 September 2019 and the cancellation will become effective at 7.30am on 27 September 2019. Pursuant to Rule 41 of the Aim Rules, the Company, through its Nominated Adviser, Peel Hunt LLP, will notify the London Stock Exchange of the proposed Cancellation.

Preliminary Announcement of the Company's Financial Results for the year ended 27 January 2019 are set out below.

The Company's Annual Report and Accounts for the year ended 27 January 2019 are today being published, on the basis of which the Board has requested that the temporary suspension of Trading in the Company's Shares on AIM be lifted.

Notice of the Company's 2019 AGM, to be held at 12:00 noon on Thursday 19 September at the Norfolk Royale Hotel in Bournemouth is included in the Circular.

Derived from audited results for Financial Year Ended 27 January 2019.

HIGHLIGHTS

#          Turnover decreased 3.2% to £15,589,485 (2018: £16,097,313)

#          Operating Profit, excluding the exceptional expense of £1,161,241 in the previous year, down 35.1% to £597,977 (2018: £893,115). Operating profit including the exceptional expense in the previous year £579,977 (2018: loss of £268,126) on a statutory basis.

#          EBITDA excluding the exceptional expense in the previous year, decreased 24.6% to £1,382,875 (2018: £1,833,611).

#          Net debt increased £516,629 due in part to a timing difference in a VAT    payment.

#          Profit before tax was £179,203 (2018: loss £734,986, including the exceptional expense of £1,161,241 due to the impairment of the Net Book values of two leasehold properties).

'There has been a slow but sustained improvement in sales and hotel profitability since August 2018 up and until todays date. In view of the high operational gearing of the business, small improvements in turnover translate to much higher percentages of hotel profitability and therefore if we can maintain this trend, we can expect our EBITDA and Profits to move forward in the current year.

The Board have concluded that due to the costs of Listing and the fact that there is no prospect of the company wishing to raise money on the market in the foreseeable future, that there seems little purpose in continuing to be listed and therefore propose cancellation of admission of ordinary shares to trading on AIM.'

Robert Peel                                        

Chairman

0207 286 6823

Nomad;

Peel Hunt / Capel Irwin

0207 418 8907

Review of the business

RESULTS

The key performance indicators for the Group are revenue, EBITDA, profit before tax, REVPAR and net debt levels.

The Financial Year ended 27 January 2019 has been a very challenging year for the Group with hotel revenues decreasing by 3.2% to £15,589,485 (2018: £16,097,313). Hotel gross profit before depreciation and Group administration expenses decreased 18.6% to £2,042,874 (2018: £2,508,933). EBITDA, excluding the exceptional expense in the previous year, decreased 24.6% to £1,382,875 (2018: £1,833,611).

Profit before tax was £179,203 (2018: loss £734,986, including the exceptional expense due to impairment of the Net Book Values of two leasehold properties of £1,161,241).

REVPAR (accommodation revenue per available room) was down 0.9% with occupancy down 2.5% and average room rate up 1.8%.

Administration expenses decreased 2.3%. Depreciation and amortisation decreased 14.6%.

FINANCE

As at 27 January 2019 net debt stood at £8,970,191 (2018: £8,453,562) representing loans totalling £9,284,844 (2018: £9,740,839) less £314,653 (2018: £1,287,277) cash at bank and in hand. Gearing on Shareholders' funds was 38.5% with interest covered 1.4 times. Net debt increased by £516,629 compared with the previous year.

During the Financial Year, the Company breached its financial covenants, which 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.

Whilst the Directors recognise that the breach of covenant, combined with a challenging trading outlook, results in material uncertainty for the Company and Group, and increases the possibility that the Company and Group 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 and Group's ability to continue as a going concern, they are confident that the Company and Group have adequate resources to meet their commitments.

CAPITAL EXPENDITURE

£461,433 (2018: £705,548) We refurbished bedrooms and upgraded air conditioning systems at the Bull Hotel in Peterborough. The corridors at the Crown and Mitre Hotel in Carlisle have been totally redecorated and refurbished. Work on bedroom renovation continues at the Midland Hotel in Bradford.

We continue to invest in our internet access throughout all our Hotels giving our Guests faster connection. This service is absolutely free to our Guests and is a vital component to them having a satisfactory stay with us.

In addition to Capital Expenditure £564,075 (2018: £614,098) was spent on repairs and renewals which help us ensure that we are constantly and consistently maintaining and improving our product. Proof of which is the continuing improvements in ratings of each Hotel assessed by the Automobile Association.

 

Group Statement of Comprehensive Income

for the year ended 27 January 2019

					2019		2018
					£		£
Revenue					15,589,485		16,097,313
Cost of sales					(13,546,611)		(13,588,380)
Gross profit					2,042,874		2,508,933
Administration expenses				(659,999)		(675,322)
Exceptional expense (note 4)				-		(1,161,241)
Depreciation				(802,898)		(940,496)
Total administration expenses					(1,462,897)		(2,777,059)
Operating profit					579,977		(268,126)
Finance expense					(400,774)		(466,860)
Profit/loss before tax					179,203		(734,986)
Income tax					33,628		(109,286)
Profit/loss and total comprehensive income for the period attributable to owners					212,831		(844,272)
Earnings / (loss) per share
(note 3)
Basic & diluted (pence)					1.5		(6.0)

Group statement of changes in equity

for the years ended 27 January 2019 and 28 January 2018

Year ended 27 January 2019	Share Capital	Share premium account	Profit and loss account	Total
	£	£	£	£
Balance brought forward at 29 January 2018	1,401,213	9,743,495	11,931,115	23,075,823
Profit and total comprehensive income for the period	-	-	212,831	212,831
Transactions with owners
Dividend	-	-	-	-
Balance at 27 January 2019	1,401,213	9,743,495	12,143,946	23,288,654

Year ended 28 January 2018	Share Capital	Share premium account	Profit and loss account	Total
	£	£	£	£
Balance brought forward at 30 January 2017	1,401,213	9,743,495	12,775,387	23,920,095
Loss and total comprehensive income for the period	-	-	(844,272)	(844,272)
Transaction with owners
Dividend	-	-	-	-
Balance at 28 January 2018	1,401,213	9,743,495	11,931,115	23,075,823

 

Group Balance Sheet

at 27 January 2019   

		2019	2018
		£	£
Assets
Non-current assets
Property, plant and equipment		33,764,910	34,106,375
Total non-current assets		33,764,910	34,106,375
Current assets
Inventories		118,380	109,271
Trade and other receivables		988,770	845,058
Cash and cash equivalents		314,653	1,287,277
Total current assets		1,421,803	2,241,606
Total assets		35,186,713	36,347,981
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		12,143,946	11,931,115
Total equity		23,288,654	23,075,823
Liabilities
Non-current
Borrowings		-	9,240,839
Deferred tax liabilities		711,089	824,009
Non-current liabilities		711,089	10,064,848
Current
Trade and other payables		1,873,799	2,636,396
Borrowings		9,284,844	500,000
Current tax liabilities		28,327	70,914
Current Liabilities		11,186,970	3,207,310
Total liabilities and equity		35,186,713	36,347,981

Group Cash Flow Statement

for the year ended 27 January 2019

		2019	2018
		£	£
Cash flows from operating activities
Profit/loss for the year		212,831	(844,272)
Adjustments for:
Financial expense		400,774	466,860
Income tax		(33,628)	109,286
Depreciation		802,898	2,101,737
Cash flows before changes in working capital and provisions		1,382,875	1,833,611
UK corporation tax paid		(121,878)	(192,142)
Decrease in trade and other receivables		(143,712)	383,811
Increase in trade and other payables		(764,023)	437,903
Decrease/(Increase) in inventories		(9,109)	4,763
Net cash from operating activities		344,153	2,467,946
Cash flows from investing activities
Acquisition of property, plant and equipment		(461,433)	(705,548)
Net cash outflow from investing activities		(461,433)	(705,548)
Cash flows from financing activities
Interest paid New loan		(355,344) -	(661,192) 9,740,840
Loan repayments		(500,000)	(9,847,422)
Equity dividends paid		-	-
Net cash outflow from financing activities		(855,344)	(767,774)
Net increase in cash and cash equivalents		(972,624)	994,624
Cash and cash equivalents at the beginning of the period		1,287,277	292,653
Cash and cash equivalents at the end of the period		314,653	1,287,277
For the purposes of the cash flow statement, cash and cash equivalents comprise:
Cash and bank balances		314,653	1,287,277

Notes

(forming part of the financial statements)

1         Basis of preparation

The financial information set out in this preliminary announcement does not constitute statutory accounts are defined by section 434 of the Companies Act 2006. It has been prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards (IFRS) adopted for use in the European Union, including IFRIC interpretations issued by the Accounting Standards Board, and in accordance with the AIM rules, and is not therefore in full compliance with IFRS. The principal accounting policies of the Group have remained unchanged from those set out in the Group's 2018 annual report, other than relating to the adoption of IFRS 9 and IFRS 15 in the current year. The financial statements have been prepared under the historical cost convention and are presented in sterling.

On 19 September 2017 the Company entered into a £9,900,000 five year term loan facility with Allied Irish Bank. This facility was used to repay the Company's previous facilities with Royal Bank of Scotland as well as the remaining balances of the Director's Loan and Loan Notes.

During the Financial Year, the Company breached its financial covenants, which 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.

Whilst the Directors recognise that the breach of covenant, combined with a challenging trading outlook, results in material uncertainty for the Company and Group, and increases the possibility that the Company and Group 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 and Group's ability to continue as a going concern, they are confident that the Company and Group have adequate resources to meet their commitments, for the reasons described below.

The Directors have prepared forecasts for more than 12 months from the date of signing these accounts, which fairly represent their best, prudent estimate of hotel trading and cash flows in the current economic environment, which forecasts show that: the Company and Group will be able to meet its loan repayment and financing costs within the facility referred to above; meet its tax payments; and pay its creditors on normal terms in the 12 months from the date of signing these accounts. The Directors have considered contingency plans in the event of unforeseen deterioration beyond their prudent forecasts, including a return to support from Directors Loans, reduced capital expenditure, and the sale of assets, In reliance on their forecasts and contingency plans, your Directors are happy to continue to adopt the going concern basis of accounting in preparing the Company's and Group's annual financial statements.

2         Publication of non-statutory financial statements

The financial information for the period ended 27 January 2019 was approved by the Board on 2 August 2019 and has been extracted from the Group's financial statements upon which the auditor's opinion is unqualified but includes reference to the material uncertainty described in note 1.  The auditor's opinion does not include a statement under section 498(2) or (3) of the Companies Act 2006. The statutory accounts for the period ended 27 January 2019 will, in due course, be delivered to the Registrar of Companies. The statutory accounts for the period ended 28 January 2018 have been delivered to the Registrar of Companies.

 
3        Earnings per share

Basic earnings per share

The calculation of basic earnings per share at 27 January 2019 was based on the profit attributable to ordinary shareholders of £212,831 (2018: loss of £844,272) and a weighted average number of ordinary shares outstanding of 14,012,123 (2018: 14,012,123). No shares were issued in 2019 or 2018.

Diluted earnings per share

There were no potentially dilutive options in issue at either year end.

4         Exceptional expense

The exceptional expense of £1,161,241 in the prior year was due to impairment of the Net Book Values of two leasehold properties held within subsidiary Companies, which have been written down to zero.

 

END

 

 

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