RNS Number:2786W
Hurlingham PLC
09 March 2004
9 March 2004
HURLINGHAM PLC
PREMILINARY RESULTS FOR THE YEAR ENDING 30 SEPTEMBER 2003
Chairman's Statement
I am pleased to present the Annual Report of the Group for the year ended30
September 2003.
Results
The year has been one of mixed fortunes, with an improvement in both occupancy
and room rates at the Group's hotel in Perth, resulting in increased profits at
our Bettagrade Limited subsidiary. This, however, has been offset by the
performance of our subsidiary, Custom Tours Limited, which has continued to be
depressed by the downturn in international travel. As a consequence, Group
turnover declined some 12% to #1,454,150 (2002: #1,656,151) and there was an
operating loss on continuing operations for the year attributable to
shareholders of #20,108 (2002: profit #18,042).
Overview
Since 9/11, there has been a significant decline in business at Custom Tours
Limited, which has historically focused on the sale of hotel rooms through
travel agents. This business model has suffered in comparison with web-based
travel companies, which have benefited from the growing number of customers
booking on-line. The Board considers that this trend will continue and that the
Group can build on its existing presence in the travel industry by exploiting
the growth in sales of on-line travel products. It has therefore taken action
to refocus the travel division and I will be outlining below the steps, which
have been put in place to carry through this re-organisation.
At the same time, the Board has carried out an impairment review of the carrying
values reflected in its balance sheet. In line with independent external
valuations of the Group's hotel and property assets, the investment property
portfolio has been revalued upwards by #111,440. Following an internal review of
the goodwill associated with Custom Tours Limited, the Board has decided that it
is not necessary to adjust the carrying value at this time. It has however,
decided to dispose of the existing reservation system at a loss of #37,184 and
this has been replaced with a new interactive online booking system. When taken
together with the net interest payable by the Group, this has resulted in a loss
on ordinary activities after tax attributable to shareholders of #206,107 (2002:
loss #74,736). Equity shareholders funds at the year end were #2,498,478 (2002:
#2,593,145) and net asset value per share was 124p. (2002:128.6p.).
Bettagrade Limited
I am pleased to report that both occupancy and room rates at the company's hotel
in Perth have continued to improve. Occupancy for the year rose by 3.5% to
75.06% (2002: 72.51%) and average room rate was up by 4.4%to #40.62 (2002:
#38.88). Company turnover for the year increased by 7.8% to #975,583 (2002:
#904,722) and operating profit by 18.5% to #188,827 (2002: #159,270).
Residential property
The Group obtained vacant possession of three of its flats for refurbishment
during the period, resulting in a reduction in rental income for the year. One
flat was subsequently sold at a profit of #2,746 over carrying value and a
further profit of #120,675 over historic cost value.
Travel division
Turnover declined some 36% to #437,296 (2002: #687,309), resulting in an
operating loss of #96,050 (2002: loss #82,275), before the exceptional loss of
#37,184 arising on the disposal of the reservation system.
The events of the last few years with the advent of low-cost airlines and the
development of online booking systems has been the catalyst for structural
change in the travel industry, whereby growing numbers of customers are booking
directly on-line. The Board has therefore taken action to develop a web-based
facility alongside its existing service and expand the product offering to meet
changing customer requirements.
As a first step, the Group's application for an ATOL licence was approved in
January 2004 for a new, wholly-owned subsidiary, Custom Flights Limited. This
company will operate exclusively online and will focus principally on the major
European holiday destinations. The Board anticipates that not only will this
expand the product offering and geographical spread, but will also have a
beneficial impact on sales of other travel-related products. In order to
develop this initiative, the company has invested in the necessary software
systems and staff training and employed David Bell, a travel industry
professional with a successful record in flights and accommodation web-based
bookings. He will be the new Operations Director of Custom Flights Limited and
will be responsible for the Group's travel division.
Dividend
In view of the structural changes which are currently underway, the Board has
decided not to pay a dividend for the year ended 30 September 2003, but will
review the position later in the year.
Outlook
During the current period, the Group will seek to continue to improve the
performance of its hotel in Perth. At the same time it will develop its online
flights business and build a retail website capable of packaging all aspects of
the travel menu, including car-hire, parking and insurance, in addition to its
own inventory of flights and accommodation. Custom Tours Limited will also seek
to expand its accommodation offering throughout Europe and to capitalise on the
weakening of the dollar to increase its American sales. In order to progress
these initiatives, the Board intends to explore opportunities to dispose of its
fixed assets in order to be in a position to develop this strategy fully.
Charles Llewellyn
Chairman
9 March 2004
Consolidated profit and loss account
for the year ended 30 September 2003
2003 2002
Notes # #
Turnover: 1
Continuing operations 1,454,150 1,656,151
Cost of sales before goodwill amortisation (743,187) (962,384)
Negative goodwill amortisation 18,584 18,500
Goodwill amortisation (28,295) (28,198)
--------- ----------
Cost of sales (752,898) (972,082)
--------- ----------
Gross Profit 701,252 684,069
Administrative expenses (721,360) (666,027)
--------- ----------
Operating (loss)/ profit
Continuing operations (20,108) 18,042
Profit on sale of properties in continuing operations - 81,146
Loss on disposal of fixed asset (37,184) -
--------- ----------
(Loss)/profit on ordinary activities before interest
and taxation
2 (57,292) 99,188
Interest receivable 5 8,069 6,678
Interest payable 5 (156,580) (174,439)
--------- ----------
Loss on ordinary activities before taxation (205,803) (68,573)
Taxation 6 (304) (6,163)
--------- ----------
Loss on ordinary activities after taxation (206,107) (74,736)
Dividends 7 - (23,712)
--------- ----------
Retained loss for the year (206,107) (98,448)
========= ==========
Loss per share 8 (10.23)p. (3.71)p.
Balance sheets
at 30 September 2003
Group Company
2003 2002 2003 2002
Notes # # # #
Fixed Assets
Intangible assets: 9
Goodwill 429,667 457,962 - -
Negative goodwill - (18,584) - -
--------- ---------- --------- ---------
429,667 439,378 - -
Tangible assets 10 4,350,854 4,509,928 958,200 1,049,981
Investments 11 - 250 1,765,246 1,765,496
--------- ---------- --------- ---------
4,780,521 4,949,556 2,723,446 2,815,477
--------- ---------- --------- ---------
Current Assets
Stock 4,592 4,074 - -
Debtors 12 172,238 160,153 133,162 123,963
Investments 13 252,500 - 252,500 -
Cash at bank and in hand 339,231 473,079 44,841 255,108
--------- ---------- --------- ---------
768,561 637,306 430,503 379,071
--------- ---------- --------- ---------
Creditors: amounts falling due
within one year 14 (633,363) (462,342) (95,403) (104,240)
--------- ---------- --------- ---------
Net current assets 135,198 174,964 335,100 274,831
--------- ---------- --------- ---------
Total assets less current
liabilities 4,915,719 5,124,520 3,058,546 3,090,308
Creditors: amounts falling due
after one year 15 (2,417,241) (2,531,375) (301,257) (331,375)
--------- ---------- --------- ---------
Net assets 2,498,478 2,593,145 2,757,289 2,758,933
--------- ---------- --------- ---------
Capital and reserves
Called up share capital 17 1,511,697 1,511,697 1,511,697 1,511,697
Share premium account 18 350,454 350,454 350,454 350,454
Revaluation reserve 18 630,258 518,818 584,440 473,000
Profit and loss account 18 6,069 212,176 310,698 423,782
--------- ---------- --------- ---------
Equity shareholders' funds 2,498,478 2,593,145 2,757,289 2,758,933
--------- ---------- --------- ---------
Consolidated cash flow statement
For the year ended 30 September 2003
2003 2002
Notes # # # #
Net cash inflow/(outflow) from operating 19
activities 92,356 (66,094)
Returns on investments and servicing of
finance
Interest received 8,263 7,084
Interest paid (139,543) (179,354)
Interest element of finance lease rental
payments (3,878) (1,349)
--------- ----------
Net cash outflow from returns on
investments and servicing of finance (135,158) (173,619)
--------- ---------
Taxation
UK corporation tax recovered/(paid) 4,136 (12,825)
Capital expenditure and financial
investments
Purchase of operating assets (81,069) (35,399)
Sale of investment properties (net) - 425,025
--------- ----------
Net cash (outflow)/inflow from capital
expenditure and financial investment (81,069) 389,626
Acquisitions and disposals
Acquisition of subsidiary - (38,861)
--------- ----------
Net cash (outflow from acquisitions and
disposals - (38,861)
--------- ----------
(119,735) 98,227
Equity dividends paid (23,707) (23,596)
--------- ----------
Net cash (outflow)/inflow before
financing (143,442) 74,631
Management of liquid resources
Cash transferred from treasury
operations - 200,312
--------- ----------
Net cash inflow from management of
liquid resources - 200,312
Financing
New debt 43,471 -
Bank loan repayments (22,374) (140,986)
Capital element of finance lease rental (11,503) (9,054)
payments
--------- ----------
Net cash inflow /(outflow)/ from
financing 9,594 (150,040)
--------- --------
(Decrease)/increase in cash 19 (133,848) 124,903
--------- ---------
Consolidated statement of total recognised gains and losses
for the year ended 30 September 2003
2003 2002
# #
Group loss on ordinary activities after taxation (206,107) (74,736)
Increase in revaluation reserve 111,440 -
---------- ----------
Total recognised gains and losses since last annual report (94,667) (74,736)
---------- ----------
Note of historical cost profits and losses
for the year ended 30 September 2003
2003 2002
# #
Reported loss on ordinary activities before taxation (205,803) (68,573)
Realisation of property revaluation gains - 105,675
---------- ----------
Historical cost profit/(loss) on ordinary activities before taxation (205,803) 37,102
========== ==========
Transfer to reserves after taxation and dividends (206,107) 7,227
========== ==========
Reconciliation of movement in shareholders' funds
for the year ended 30 September 2003
2003 2002
# #
Loss for the financial period (206,107) (74,736)
Dividends - (23,712)
---------- ----------
(206,107) (98,448)
Other recognised gains and losses for the period (net) 111,440 -
---------- ----------
Net decrease in shareholders funds (94,667) (98,448)
Opening shareholders funds 2,593,145 2,691,593
---------- ----------
Closing shareholders funds 2,498,478 2,593,145
---------- ----------
Enquiries
Hurlingham Plc
Charles Pettingell, Managing Director 0777 594 0214
Teather & Greenwood Limited
Dugald Carlean 020 7426 9593
This information is provided by RNS
The company news service from the London Stock Exchange
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