RNS Number:6772Q
Peel Hotels PLC
09 October 2003
Peel Hotels PLC
Interim Results
For the 28 week period ended 31 August 2003
*Turnover up 16.6% to #6,488,887 (2002 - #5,567,463)
*Operating Profit up 8% to #1,563,171 (2002 - #1,447,401)
*Profit before tax down 8.6% to #903,956 (2002 - #989,590)
*Earnings per share
Basic 5.6p (2002 6.1p)
Diluted 5.5p (2002 6.0p)
Further information
Robert Peel 020 7266 1100
9 October 2003
CHAIRMAN'S STATEMENT
RESULTS
In the twenty eight weeks to 31 August 2003 turnover grew by 16.6% to #6,488,887
and operating profit grew 8% to #1,563,171. Earnings before interest, tax,
depreciation and amortisation grew from #1,805,608 to #1,985,138, an increase of
9.9%. *
The pre-tax result decreased 8.6% to #903,956 largely as a result of a 44%
increase in net interest payable amounting to #201,404 more than the previous
half year. On 10 June 2002 the company acquired the Avon Gorge Hotel, Bristol
and the George Hotel, Wallingford for a cash consideration of #9.4 million,
which, together with the collar arrangements noted below, has increased interest
costs.
Tax has been provided at 30% less the discount on the deferred tax liabilities,
giving an effective rate of 25%. Basic earnings per share were 5.6p compared
with 6.1p in the comparative period on an unchanged 12,120,457 shares.
Total sales in the six owned hotels, on a like for like basis, grew by 0.9%,
whilst accommodation revenue per available room dipped -0.6% with average room
rate up 5.3% and occupancy down 5.6%. We have achieved Revpar growth in each of
the last five years of trading and at this stage, with the commercial contracts
we have, we will be able to achieve further growth once again for the year as a
whole.
Management fee income has reduced as forecast and there remain only five hotels
that we manage on behalf of Grace Hotels. Our income from this source reduced by
#112,583, more than accounting for our overall decline in pre tax profits.
Administrative expenses excluding depreciation fell by #93k of which
approximately #30 is sustainable, going forward.
FINANCIAL CHARGES
As we have previously reported we have put in place an interest rate instrument
known as a cap and collar agreement. It is worth noting that the collar
agreement on #7 million of our long term loans came into effect on 24 June 2003
moving our borrowing rate to 6.99% plus margin and the floating rate we enjoyed
on the balance of our loans, changed to fixed at 5.83% plus margin, on 11 April
2003. Although the collar agreement will penalise the company short term, should
interest rates rise over the next few years, the company will pay a lesser
comparative financial charge. The average cost of borrowing going forward on
#16.4 million of loans at the end of the half year was 6.32% plus margin.
With effect from 12 October 2003 we have negotiated with our banker to reduce
the margin from 1.50% to 1.25%.
CAPITAL EXPENDITURE
#645,223 was spent in the period. The new passenger lift at the Midland in
Bradford was completed. Twenty three bedrooms were refurbished and new hot water
and central heating boilers were installed at the Caledonian in Newcastle.
We completed the redevelopment of nine bedrooms at the Bull in Peterborough. We
moved our administration office out of the Golden Lion in Leeds and into the
mezzanine floor of Aire House, adjacent to the hotel. The old offices have been
converted to a conference room which will increase conference facilities at the
Golden Lion.
In addition to these capital improvements we have rigidly adhered to our rolling
planned maintenance programme in each of our hotels and expensed costs to the
profit and loss account. The benefits of this strategy are self evident in the
well cared for appearance of our hotels.
In each of our owned hotels we have created a 'cyberspace' in the public areas
allowing all residents and guests, with wireless capability laptops, free
broadband access to the internet via a wireless 'hotspot'. Additionally we are
in the process of placing a computer desk at each hotel for the benefit of our
guests at no charge. The applicable costs of these initiatives are easily
absorbed from the savings made by operating our administrative computers from
the same wireless source. We believe this initiative will create a great deal of
goodwill and therefore repeat custom for our hotels.
SHAREHOLDERS
I am delighted to welcome some 28% new shareholders to our register and very
much hope that they, along with existing shareholders, will take advantage of
our shareholders' discount scheme. Shareholders are entitled to a 25% discount
off the listed tariff, using a special reservations number 020 7266 1100 or
e-mail info@peelhotel.com. Shareholders can identify the hotels we own and
manage using the directory listed at the back of the interim report.
We do hope you will visit our hotels and enjoy them.
THE FUTURE
In a market place where growth is 'tough' to achieve, we have managed to
increase like for like turnover and to increase pre-interest profit with less
management income. However, much remains to be done and our ongoing challenge
remains to lift the profit performance of our six owned hotels to compensate for
the gradual extinction of income from the existing management contract.
The third quarter has started well in comparative terms, this, together with the
many and various improvements to all our hotels, gives us grounds for cautious
optimism on trading prospects for the full year.
* Taken from the profit and loss account on page 4.
DIRECTORS AND ADVISORS
Directors
Robert Edmund Guy Peel Executive Chairman
Clement John Govett Non-executive director
Keith Peter Benham Non-executive director
Norbert Paul Gottfried Petersen Chief Operating Officer
John Perkins Finance Director
Secretary
Gravitas Company Secretarial Services Limited
110 Cannon Street, London EC4N 6AR
Registered Office
4th Floor, 111 Old Broad Street, London EC2N 1PH
Company registration number 3473990
Auditors
Deloitte & Touche LLP
Leda House, Station Road, Cambridge CB1 2RN
Bankers
Royal Bank of Scotland Plc
280 Bishopsgate, London EC2M 4RB
Registrars
Computershare Services Plc
PO Box No. 82, The Pavillions, Bridgwater Road, Bristol BS99 7NH
Solicitors
Nicholson Graham & Jones
110 Cannon Street, London EC4N 6AR
Stockbrokers
KBC Peel Hunt Ltd
4th Floor, 111 Old Broad Street, London EC2N 1PH
PROFIT AND LOSS ACCOUNT
For period ended 31 August 2003
28 weeks 28 weeks Year
ended ended ended
31/8/2003 1/9/2002 16/2/2003
Unaudited Unaudited Audited
Note # # # # # #
-------- --------- -------- --------- -------- ----------
Turnover 6,488,887 5,567,463 11,000,362
Cost of sales (4,224,964) (3,389,968) (6,932,448)
-------- --------- -------- --------- -------- ----------
Gross Profit 2,263,923 2,177,495 4,067,914
-------- --------- -------- --------- -------- ----------
Administrative
expenses
Depreciation (421,967) (358,207) (665,403)
Other (278,785) (371,887) (693,732)
(700,752) (730,094) (1,359,135)
-------- --------- -------- --------- -------- ----------
Operating profit 1,563,171 1,447,401 2,708,779
Interest
payable
& similar charges (659,215) (515,105) (1,006,344)
Other interest
received
& similar income - 57,294 58,093
-------- --------- -------- --------- -------- ----------
Profit on
ordinary
activities
before taxation 903,956 989,590 1,760,528
Taxation 2 (225,989) (247,398) (440,133)
-------- --------- -------- --------- -------- ----------
Profit on
ordinary
activities
after taxation 677,967 742,192 1,320,395
Dividend - - (484,818)
-------- --------- -------- --------- -------- ----------
Profit retained 677,967 742,192 835,577
-------- --------- -------- --------- -------- ----------
Earnings per 3
share
Basic 5.6p 6.1p 10.9p
Diluted 5.5p 6.0p 10.6p
-------- --------- -------- --------- -------- ----------
All transactions derive from continuing operations.
There are no recognised gains and losses other than stated above.
Accordingly, no statement of total recognised gains and losses is given.
BALANCE SHEET AS AT 31 AUGUST 2003
31/8/2003 1/9/2002 16/2/2003
Unaudited Unaudited Audited
# # #
----------- -------- ---------
Fixed assets 32,588,308 31,905,098 32,365,051
----------- -------- ---------
Current assets
Stocks 89,664 76,815 76,672
Debtors 919,427 913,909 870,436
Cash at bank and in hand 119,051 684,914 134,363
----------- -------- ---------
1,128,142 1,675,638 1,081,471
Creditors (due within one year) (3,355,863) (3,306,225) (3,298,041)
----------- -------- ---------
Net current liabilities (2,227,721) (1,630,587) (2,216,570)
----------- -------- ---------
Total assets less current
liabilities 30,360,587 30,274,511 30,148,481
Creditors (due after one year) (15,301,422) (16,247,367) (15,767,283)
Provisions for liabilities and
charges (948,540) (687,871) (948,540)
----------- -------- ---------
Net assets 14,110,625 13,339,273 13,432,658
----------- -------- ---------
Capital and reserves
Called up share capital 1,212,046 1,212,046 1,212,046
Share premium account 8,519,477 8,519,477 8,519,477
Profit and loss account 4,379,102 3,607,750 3,701,135
----------- -------- ---------
Equity shareholders' funds 14,110,625 13,339,273 13,432,658
----------- -------- ---------
CASH FLOW STATEMENT
For the period ended 31 August 2003
28 weeks 28 weeks Year
Ended Ended Ended
31/8/2003 1/9/2002 16/2/2003
Unaudited Unaudited Audited
Note # # # # # #
--------- --------- --------- --------- ---------- ----------
Net cash flow from
operating activities 4 1,723,410 2,018,186 3,635,528
Returns on investments
and servicing of finance
Interest received - 57,294 -
Interest paid (361,320) (300,937) (768,714)
--------- --------- ----------
Net cash outflow from
returns on investments
and servicing of
finance (361,320) (243,643) (768,714)
Taxation
UK corporation tax
paid - - (272,345)
--------- --------- ----------
Tax paid - - (272,345)
Capital expenditure
Purchase of tangible
fixed assets (645,223) (440,878) (1,239,852)
--------- --------- ----------
Net cash outflow from capital
Expenditure (645,223) (440,878) (1,239,852)
Acquisitions of businesses
net
of cash acquired - (9,797,545) (9,774,884)
Equity dividend paid (484,818) (424,216) (424,216)
--------- --------- ----------
Net cash inflow/(outflow)
before financing 232,049 (8,888,096) (8,844,483)
Financing
Share issue costs - (44,487) *(35,323)
New long term loans - 7,150,000 7,150,000
Less: loan
arrangement fees - - (97,960)
Loan repayments (492,270) (175,000) (667,270)
--------- --------- ----------
Net cash (outflow)/inflow
From financing (492,270) 6,930,513 6,349,447
--------- --------- --------- --------- ---------- ----------
Decrease in cash 5 (260,221) (1,957,583) (2,495,036)
--------- --------- --------- --------- ---------- ----------
*These costs relate to prior
year equity issue.
Reconciliation of net debt
Decrease in cash in
the period (260,221) (1,957,583) (2,495,036)
Cash outflow/(inflow)from
decrease/(increase)
in debt 492,270 (6,975,000) (6,384,770)
--------- --------- ----------
Change in net debt
resulting from
cashflows 232,049 (8,932,583) (8,879,806)
Non cash changes (26,409) 61,166 (48,980)
--------- --------- ----------
Reduction/(increase)
in net debt in the
period 205,640 (8,871,417) (8,928,786)
--------- --------- --------- --------- ---------- ----------
Net debt at
beginning of period (16,746,809) (7,818,023) (7,818,023)
--------- --------- --------- --------- ---------- ----------
Net debt at end of
period 5 (16,541,169) (16,689,440) (16,746,809)
--------- --------- --------- --------- ---------- ----------
NOTES TO THE INTERIM ACCOUNTS
For the period ended 31 August 2003
1. Basis of accounting
The interim financial information has been prepared on the basis of the
accounting policies consistent with those applied in the last Annual Report.
The financial information set out in respect of the year ended 16 February 2003
does not constitute the company's statutory accounts for that year but is
derived from those accounts. Statutory accounts for that year have been
delivered to the Registrar of Companies. The auditors reported on those
accounts, their report was unqualified and did not contain a statement under
section 237(2) or (3) of the Companies Act 1985.
2. Taxation
Tax has been provided at a rate of 25% which represents the expected effective
rate for the full year. This charge has been calculated in accordance with FRS19
"Deferred Tax" which is consistent with the accounting treatment adopted for the
year ended 16 February 2003 and the 28 weeks ended 1 September 2002.
3. Earnings per share
Earnings per share are based on the profit after taxation, and on the average
number of shares in issue during the period.
----------- ---------- ----------
28 weeks 28 weeks Year
ended ended ended
31/8/2003 1/9/2002 16/2/2003
Unaudited Unaudited Audited
----------- ---------- ----------
Average No. shares - Basic 12,120,457 12,120,457 12,120,457
- Diluted 12,381,007 12,453,428 12,436,057
----------- ---------- ----------
4.Reconciliation of operating profit to net cash flow from operating activities
----------- ---------- ----------
28 weeks 28 weeks Year
ended ended ended
31/8/2003 1/9/2002 16/2/2003
Unaudited Unaudited Audited
# # #
----------- ---------- ----------
Operating profit 1,563,171 1,447,401 2,708,779
Depreciation and amortisation 421,967 358,207 665,403
Increase in stocks (12,992) (20,604) (20,461)
Increase in debtors (187,266) (354,654) (87,124)
(Decrease)/increase in creditors (61,470) 587,836 368,931
----------- ---------- ----------
Net cash inflow from operating 1,723,410 2,018,186 3,635,528
activities ----------- ---------- ----------
NOTES TO THE INTERIM ACCOUNTS
For the period ended 31 August 2003
5. Analysis of net debt
At
beginning non At End
of period cash of period
17/2/2003 cash flow changes 31/8/2003
# # # #
--------- --------- --------- -----------
Cash at bank and in 134,363 (15,312) - 119,051
hand
Bank overdraft (129,349) (244,909) - (374,258)
--------- --------- --------- -----------
5,014 (260,221) - (255,207)
Debt due within one (984,540) - - (984,540)
year
Debt due after one (15,767,283) 492,270 (26,409) (15,301,422)
year
--------- --------- --------- -----------
Total (16,746,809) 232,049 (26,409) (16,541,169)
--------- --------- --------- -----------
6. Financing
The bank loans are repayable by semi-annual instalments plus a final payment on
11 April 2014. Interest is currently charged at 1.5% over LIBOR. The company has
entered into a collar agreement on #7 million which caps the company interest
cost at 6.99% plus margin. The minimum interest cost is 4.99% plus margin, up to
12 October 2009, except where LIBOR falls below 4.99% between 24 June 2003 and
12 October 2009; in which case an additional 2% of interest is payable. In
addition, the company has entered into an interest rate swap agreement on the
outstanding loan balances which are not covered by the collar agreement,
commencing on 11 April 2003 to 11 April 2014 with an option for the Royal Bank
of Scotland to terminate the agreement from 11 October 2009. Under the terms of
this agreement the company receives interest at LIBOR plus 1.5% and pays
interest at a fixed rate of 7.33%.
INDEPENDENT REVIEW REPORT TO
PEEL HOTELS PLC
Introduction
We have been instructed by the company to review the financial information for
the 28 weeks ended 31 August 2003 which comprises the profit and loss account,
the balance sheet, the cash flow statement, the reconciliation of net debt and
the related notes 1 to 6. We have read the other information contained in the
interim report and considered whether it contains any apparent misstatements or
material inconsistencies with the financial information.
This report is made solely to the company in accordance with Bulletin 1999/4
issued by the Auditing Practices Board. Our work has been undertaken so that we
might state to the company those matters we are required to state to it 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 for our review work, for this report, or for the conclusions we have
formed.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. The directors are
also responsible for ensuring that the accounting policies and presentation
applied to the interim figures are consistent with those applied in preparing
the preceding annual accounts except where any changes, and the reasons for
them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board for use in the United Kingdom. A review
consists principally of making enquiries of management and applying analytical
procedures to the financial information and underlying financial data and based
thereon assessing whether the accounting policies and presentation have been
consistently applied unless otherwise disclosed. A review excludes audit
procedures such as tests of controls and verification of assets, liabilities and
transactions. It is substantially less in scope than an audit performed in
accordance with United Kingdom Auditing Standards and therefore provides a lower
level of assurance than an audit. Accordingly, we do not express an audit
opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the 28 weeks ended
31 August 2003.
Deloitte & Touche LLP
Chartered Accountants
Cambridge
8 October 2003
PEEL HOTELS PLC
19 Warwick Avenue London W9 2PS
Telephone: 020 7266 1100 FAX: 020 7289 5746
Location Hotel Rating Rooms Telephone Facsimile
---------------- ------------- ------ ------ --------- ----------
Owned by the company
Bradford Midland Hotel **** 90 01274 735735 01274 720003
Bristol Avon Gorge Hotel **** 76 0117 973 8955 0117 923 8125
Leeds Golden Lion **** 89 0113 243 6454 0113 242 9327
Hotel
Newcastle Upon
Tyne Caledonian Hotel **** 89 0191 281 7881 0191 281 6241
Peterborough Bull Hotel **** 118 01733 561364 01733 557304
Wallingford George Hotel **** 39 01491 836665 01491 825359
Management Contracts - Grace Hotels Ltd
Carlisle Crown & Mitre *** 94 01228 525491 01228 514553
Hotel
Dunfermline King Malcolm **** 48 01383 722611 01383 730865
Hotel
Edinburgh Barnton Hotel **** 50 0131 339 1144 0131 339 5521
Leeds Merrion Hotel **** 109 0113 243 9191 0113 242 3527
Nottingham Strathdon Hote **** 68 0115 941 8501 0115 948 3725
Total Hotels 11 870
---------------- --------------- ------ ------ ------------- -------------
For reservations at any Peel Hotel call 020 7266 1100
Or dial into our web site on www.peelhotel.com
e-mail - info@peelhotel.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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