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07/4/2011 09:40
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RNS Number:8782U
De Vere Group PLC
30 November 2005
Wednesday 30 November 2005
DE VERE GROUP PLC
Preliminary Results for the year ended 25 September 2005
Key Financials:
Year to Year to
25/09/2005 26/09/2004 Percentage
#m #m Change
Headline
Turnover 312.0 321.8 -3.0
Profit Before Tax 59.0 41.6 +41.6
Basic EPS (pence) 107.26 24.78 +332.9
Total Dividend (pence) 173.02 13.10 -
Excluding exceptional items
Profit Before Tax 42.0 45.6 -7.8
Basic EPS (pence) 30.68 27.98 +9.7
Ordinary Dividend (pence) 1 14.02 13.10 +7.0
Underlying results 2
Turnover 294.9 274.2 +7.5
EBITDA 67.8 63.5 +6.7
ROCE 3 7.5% 7.1% +0.4points
Notes
1) Excluding special dividend
2) Excluding exceptional items & disposals
3) Excluding exceptional items, disposals, new openings & capital work-in-progress
Highlights:
* Strong underlying performance in both hotel brands reflecting good
progress on the Group's strategy:
o De Vere Hotels EBITDA up 7.8% to #34.6m
o Village Hotels EBITDA up 11.7% to #23.6m (7.5% on a like-for-like basis)
* Property revaluation disclosed a #102m net surplus to book value, taking
net asset value per share including this surplus to 786p
* Successful conclusion of historical tax issues results in #44m credit to
P&L account; Group will not pay tax in the medium-term
* ROCE increased to 7.5% and strong focus on returns continues. However, a
number of key factors, including significant increases in external costs
such as utilities and business rates mean 10% ROCE target will not be
achieved in 2006/07
* Sale and manage-back of The De Vere Belfry for #186m; exceptional profit
of #57m; return of #183m to shareholders via special dividend
* Village pipeline strong with Bournemouth, Hull and Swansea under
construction and Leeds South and Elstree exchanged, subject to planning
* De Vere management contract in Spain announced in the year; second
management contract agreed post year-end
Peter Daresbury, Chairman, commented:
"The Board is pleased to announce a strong underlying performance for the year.
Good progress continues to be made on our four-part strategy, with benefits
already showing through, not only via improvements in trading but in the uplift
in property values reported today of #102m over book value. At the year-end, had
the full surplus been included in the balance sheet, net assets per share would
have amounted to 786p.
Following the sale and manage-back of The De Vere Belfry, we continue to grow
the De Vere brand into new geographic markets through low capital intensive
routes, evidenced by the agreement of a second management contract in Spain. The
growth of the Village brand also continues apace with three sites under
construction, two exchanged subject to planning, and three more in the advanced
stages of negotiation.
Notwithstanding cost pressures that are being felt across the industry, we are
cautiously optimistic about the outcome for the year as a whole."
Enquiries:
Carl Leaver, Chief Executive De Vere 01928 712111
Roger Stubbs, Finance Director De Vere
Jonathan Glass/Catherine Hicks/Laura Cummings Brunswick 020 7404 5959
CHAIRMAN'S STATEMENT
The Board of De Vere Group Plc is pleased with the progress made during the year
on the delivery of the Group's four-part strategy launched 18 months ago, the
foundations of which are now firmly in place. Trading performance for the year
on an underlying basis has been encouraging.
Results and EPS
Underlying Group turnover excluding the impact of disposals and exceptional
items was #294.9m, up by 7.5% on 2004, and underlying EBITDA rose by 6.7% to
#67.8m (2004: #63.5m). Pre-exceptional EPS rose by 9.7% to 30.68p (2004:
27.98p).
The Group has this year also realised significant value for shareholders through
the sale and manage-back of The De Vere Belfry. The net proceeds of this
transaction were returned to shareholders via a special dividend in March 2005.
A revaluation has been carried out on the Group's property portfolio, resulting
in a net surplus of #102m over book value. At the year-end, had the full surplus
been included in the balance sheet, net assets per share would have amounted to
786p.
Total EPS, including exceptional items credited to profit and loss account, was
#107.26p.
Dividend
The Board is recommending a final dividend of 9.44 pence per Ordinary share
payable on 17 February 2006 to shareholders on the register at 20 January 2006.
The final dividend together with the interim dividend of 4.58 pence per Ordinary
share, makes a total ordinary dividend of 14.02 pence (2004: 13.10 pence), an
increase of 7%. A special dividend of 159 pence per share was paid in March
2005.
Board
Since the year-end we have strengthened our Board with the appointment of David
Richardson, who joins as a Non-Executive Director. I was also delighted to
welcome Matthew Fearn in October 2005 as Group Finance Director and I am sure
that both David and Matthew will bring new insight to our business.
Matthew replaces Roger Stubbs who retires in January. Roger has been
instrumental to the Group's development, particularly since he assumed the role
of Group Finance Director in 1999. His commitment to the Group over the last 26
years is greatly appreciated and we wish him a long and happy retirement.
People
The progress made this year could not have been achieved without the best
efforts of all our staff, guided by a strong management team. It is clear that
the Group has maintained its strong position in the marketplace, evidenced by
the results of three benchmark industry surveys, which rank De Vere's customer
loyalty as the highest within the industry. We intend to build on this firm
foundation by investing further in the development of our people through the
roll-out of a new customer service training programme called 'Shine!' which
commenced in the final quarter.
I remain confident that the combined efforts of our teams and the impact of our
four-part strategy will continue to deliver growth for our shareholders.
CHIEF EXECUTIVE'S STRATEGY REVIEW
We have achieved strong underlying results in the year, notwithstanding
significant adverse movements in external costs. Good progress has been made in
all areas of our four-part strategy which has now moved into the delivery phase.
The sale and manage-back of The De Vere Belfry in March was perhaps the most
significant event of the year. The hotel was sold to the Quinn Group for #186m,
a 47% premium to net book value. The full net proceeds were returned to
shareholders via a special dividend of 159p per share. In parallel, we
negotiated a 25-year management contract.
We have also completed a full revaluation of our assets during the year,
resulting in a net gain of #102m. This gain, along with the significant value
realised through The De Vere Belfry transaction, is clear evidence of the
benefits of asset ownership and of our commitment to maximising shareholder
value.
The successful conclusion of some of the Group's historical tax issues means
that we have been able to recognise a #44m deferred tax benefit. As a result,
the Group is now unlikely to pay tax in the medium term, significantly
benefiting cashflow and post-cash tax returns.
Turning to our four-part strategy:
Leveraging Our Strong Brands
This year we commenced the roll-out of a customer service programme across the
business, implemented comprehensive measurement systems to track customer
satisfaction and developed new logos for our two hotel brands. The benefits can
be seen in the results of JD Power's inaugural European Hotel Guest Satisfaction
Study, in which De Vere Hotels ranked top in the first class category. This was
in addition to the results of two leading industry surveys, the BDRC British
Hotel Guest Survey 2005 and BDRC UK Meetings Survey 2005, Select Brands, which
reported that De Vere Hotels enjoys the highest level of customer loyalty in the
leisure and conference segments respectively. These levels of guest satisfaction
support our RevPAR premia of 31% and 41% for De Vere Hotels and Village Hotels &
Leisure respectively.
Our customer relationship management (CRM) strategy is already delivering great
results with CRM campaigns generating #0.75 million of incremental revenue from
the leisure market this year. Weekend occupancy in De Vere Hotels rose by almost
2% points over the summer period (June to August).
Implementing Operational Excellence
The leading-edge reservations system, Fidelio Opera, has been fully implemented
across Village and De Vere Hotels. The ability to deliver real-time availability
and price parity through the internet has driven a dramatic increase in room
bookings through our brand websites, accounting for 6.0% of total bookings in
the six months since it was launched, versus 0.7% in the same period last year.
Real-time availability via GDS supported a 24% (#1.5m) revenue growth through
this channel. In addition, we are on track to save #0.75m per annum by increased
efficiency and reduced transaction costs.
During the year we piloted our new revenue management system and selected a
preferred software system, IdeaS. Full implementation across all hotels is
expected to be completed during the next financial year and early results from
the pilot give us confidence that a significant uplift in RevPAR is achievable.
We are on target to achieve procurement and efficiency savings of #3m per annum
by 2006/07, having achieved approximately two-thirds of this by 2004/05.
However, increased utility costs and business rates are likely to more than
offset these gains.
The sharing of best practice in health & fitness membership sales processes
resulted in a strong increase in membership numbers in both Village and Greens
during the first half. However, the gain in membership numbers was eroded in the
second half as a result of an increasingly competitive trading environment.
Village Growth
Bedroom extensions to the existing estate are progressing ahead of plan. A 28
bedroom extension at Village Bury was completed in July 2005 followed by 32
bedrooms added at Village Cardiff in August 2005. We are currently building
additional bedrooms at Cheadle (42 bedrooms) and Nottingham (51 bedrooms) and
have gained planning permission for a 42 bedroom extension at Village Newcastle
and 36 bedrooms at Leeds.
The new site roll-out also continues apace. Village Walsall, which opened in
December 2004, continues to perform ahead of expectations. Village Bournemouth
is due to open in December 2005 and will be followed by Village Hull in February
2006 and Swansea in January 2007. Subject to planning permission, we have now
exchanged contracts on a site in South Leeds and a site in Elstree. In addition,
we are at advanced stages of negotiation on a further three sites, with a strong
pipeline of opportunities identified.
Improving De Vere Returns
We announced in April 2005 the first expansion of the De Vere brand overseas
with the management contract at Roda Golf & Beach Resort, Murcia. This 150
bedroom hotel with spa and 18-hole championship golf course is scheduled to open
in 2008. We have also agreed, with the same owner, a management contract over a
smaller hotel and golf development at nearby Corvera. Development opportunities
elsewhere look promising.
We remain excited about the development opportunities within our existing De
Vere estate, although planning delays have pushed back timescales significantly.
Nevertheless, planning permission has been received for 41 bedrooms at Dunston
Hall, where construction will begin in spring 2006. We are progressing planning
applications for a further 125 bedrooms across six hotels.
De Vere Resort Ownership (DVRO) provides an important route to enhanced returns.
Over and above The Carrick development, two further opportunities within the
existing estate have been identified, although planning will be sensitive.
However, in the short-term, DVRO's performance is being impacted due to its
close link to consumer confidence and the property market, both of which have
slowed during 2005.
Returns Target
When our four-part strategy was launched two years ago, we targeted a 10% Group
EBIT return on capital employed (ROCE) by the end of 2007. This goal has been
critical in achieving internal alignment with shareholder interests and to
galvanise the entire organisation to focus on returns.
We have made good progress toward this goal in the last two years, increasing
EBIT returns from 6.5% to 7.5%, excluding disposals, new openings and capital
work-in-progress. This has been achieved despite a difficult consumer
environment impacting our health & fitness businesses and DVRO and substantial
increases in utilities and business rates that will now exceed our original
projections by #6.5m in 2006/07. In addition, planning has delayed the
construction of high returning developments at existing De Vere hotels and has
meant that these projects will now have an adverse impact on returns in 2006/07,
rather than the anticipated positive contribution.
Moreover, there have been a number of material non-trading items that have
complicated the overall picture, including the sale and manage-back of The De
Vere Belfry, which whilst clearly a very good deal for shareholders, diluted
returns by 20 bps. Also, the movement in deferred tax has had the effect of
increasing capital employed by #58m and
the property revaluation has resulted in an impairment charge of #40m, despite a
net increase in values of #102m.
Looking ahead, changes to accounting standards will lead to further complexity
in the areas of share-based payments and non-cash IFRS adjustments to capital
employed.
The combined effect is that, whilst we are making good progress on our four-part
strategy and are achieving a post-cash tax return ahead of the Group's cost of
capital, we will now not achieve a 10% return by 2006/07.
It is the Board's view, particularly given the current market position of our
hotel brands, that there is real synergy between owning and operating.
Well-targeted investment and improved operational performance have both
contributed significantly to the uplift in property values reported in these
results. Looking forward, we have been clear where we see further investment
opportunities within our existing estate and are confident of improving trading
across the Group. Accordingly, our shareholders can expect to continue to
benefit not only from increased earnings but also from growth in asset values.
In this context, it remains the Board's belief that a focus on returns is the
best framework for disciplined decision-making. It has helped reshape our
business approach, re-energised our internal teams and repositioned us as a
Company that will have no hesitation in selling assets where a disposal can
realise a higher value than could be achieved through continued ownership. Our
resolve in this regard has been evidenced by our decisions to dispose of Village
Prestwich and Village Swindon, the De Vere Bellhouse and the De Vere Dormy, and
most significantly, the sale and manage-back of The De Vere Belfry.
We remain confident that our four-part strategy will continue to deliver growth
and higher returns.
OPERATING REVIEW
De Vere Hotels
Like-for-like turnover, excluding DVRO, increased by 3.9% and like-for-like
EBITDA, before exceptional items, increased by 7.8% to #34.6m (2004: #32.1m),
with EBITDA margin increasing by 0.9% points to 24.6%. This margin improvement
is the result of improvements in purchasing and tighter control of labour cost
and comes despite an increase of #1m in energy costs and business rates.
Operating profit on the same basis increased by 14.5% to #24.6m (2004: #21.5m).
Like-for-like RevPAR rose 5.2% against 1.8% in the rest of the upper provincial
market. Occupancy on a like-for-like basis increased by 0.5% points to reach
75.1% and average room rate rose by 4.6% to #87.45.
Sales at DVRO were #9.6m, up by 20.7% due to recognition of sales at the new
Carrick development. Sales conversion rates were significantly lower from
January in line with weaker consumer confidence, resulting in a breakeven
position for the year at operating profit (2004: #0.8m) due to the operational
gearing of the business. Towards the end of the financial year, management
action had returned sales conversion rates to normal levels.
At the year-end there were 19 De Vere hotels (including two hotels under
management contract) with 3,064 rooms (2004: 3,318 rooms). The sale of the De
Vere Bellhouse was completed in November 2004 and contracts were exchanged in
September 2005 on the De Vere Dormy, which closed in December 2004 pending its
sale for residential development. These disposals, together with the sale of The
De Vere Belfry, caused turnover for the De Vere brand as a whole to drop to
#167.3m compared to #187.9m in 2004 and overall pre-exceptional operating profit
to end the year at #30.4m from #36.9m.
Village Hotels & Leisure Clubs
Underlying turnover grew by 15% with the new Villages at Maidstone and Walsall
performing ahead of expectations. On a like-for-like basis, turnover increased
by 3.4%. Before exceptional items underlying EBITDA was up by 11.7%, with the
like-for-like estate up by 7.5%, driven by an improvement in margin of 1.2%
points to 32%. This margin improvement was achieved despite an increase of #0.6m
in energy costs and business rates.
Occupancy on a like-for-like basis was 78.7% (2004: 80.6%). This reduction arose
during the second and third quarters while the new reservation system was
implemented. However, the benefits of improved distribution, notably via the
internet, provided growth in occupancy in the fourth quarter. Average room rate
was up by 3.2% to #56.88 and RevPAR was ahead by 0.7% for the year as a whole.
Overall health & fitness membership grew to 62,300 (2004: 58,500) due to the
impact of new clubs. In the mature estate, strong membership growth in the first
half was eroded in the second half leaving closing membership level with the
prior year.
At the year-end there were 14 Village Hotels & Leisure Clubs with 1,471 rooms
(2004: 1,313).
Greens
A strong increase in membership numbers in the first half resulted in sales
growth in the year of 4.1% to #32.5m (2004: #31.2m). However, profitability was
impacted by the increase in energy costs and rates of #0.5m, equivalent to 1.5%
of sales. In spite of this, EBITDA margin was level with last year and EBITDA
was up by 3.7% to #7.5m (2004: #7.2m). Operating profit increased by 14.4% to
#4m (2004: #3.5m). At the year-end membership was 68,900 (2004: 68,400).
G&J Greenall
Turnover increased by 6.6% to #30.7m (2004: #28.8m). However, due to the impact
of pricing in the new production contract for Bacardi gin, margins reduced and
EBITDA was #2.0m against #2.2m in 2004. Operating profit was #1.2m compared to
#1.5m in 2004.
Since the year-end, in October 2005, a serious fire destroyed the bottling plant
and warehouse. The distillery was not badly damaged and production of gin and
vodka resumed within one week. Subject only to a minor excess, the property and
stock are insured as is any consequential loss of profit for up to two years.
Current trading & outlook
During the first nine weeks of the new financial year like-for-like turnover at
De Vere Hotels, excluding DVRO, increased by 2.9% and RevPAR on the same basis
grew by 4.2%.
Timeshare sales at the new Carrick site have lifted DVRO turnover by over 100%.
However, sales conversion, having improved over August and September, turned
more variable in October and November such that margins are under continued
pressure.
In Village, like-for-like sales grew by 3.4% whilst RevPAR, driven by increased
occupancy, was ahead by 3.0%.
Health & fitness trading conditions remain challenging with like-for-like
membership down 1.6% and 1.4% in Greens and Village respectively. Like-for-like
sales in Greens are down on last year by 0.4%.
Cost pressures from energy and business rates continue to place pressure on
margins. In spite of significant increases seen in 2005, the anticipated
increases for 2006 are #1.5m in De Vere Hotels, #1.2m in Village and #0.8m in
Greens. However, these increases will be partially offset by continued progress
expected on operational efficiency initiatives.
Following the fire at G&J Greenall the team were back distilling within seven
days, an incredible accomplishment. Bottling has been outsourced and customer
relationships are being maintained on a positive footing. However, comparisons
to last year are meaningless and importantly our insurance covers loss of
profit.
Looking forward, we are confident that our reservations and revenue management
strategies will drive accommodation revenue ahead of the market. Health and
fitness trading is likely to remain difficult and action is being taken in DVRO
to ensure that we emerge from the December/January quiet period in a stronger
position.
Notwithstanding external cost pressures that are being felt across the industry,
we are cautiously optimistic about the outcome for the year as a whole.
FINANCIAL REVIEW
Exceptional items
On 16 March 2005, the Group completed the sale and manage-back of The De Vere
Belfry to Quinn Group, for proceeds of #186.0 million. The Group negotiated a
25-year contract to manage the hotel under the De Vere brand, delivering an
annual income of approximately #2 million.
The net proceeds from The Belfry transaction were returned to shareholders in
the form of a 159 pence special dividend, amounting to #183.4 million, which was
paid on 29 March 2005. A five for seven share consolidation exercise was also
undertaken to ensure consistency in share price and Earnings per Share.
During the year, the Directors commissioned a valuation of the Group's property
portfolio. The De Vere branded properties were valued by Gerald Eve and the
Villages by Fleurets. The valuation of these assets taken together with the
Directors' valuation of the Greens business revealed a net surplus of #102
million.
Within the surplus, the property valuation highlighted a deficit on certain
properties and these deficits have been booked as an impairment in the current
year.
The total impairment charge amounts to #39.7 million, of which #31.3 million
relates to the hotels and #8.4 million is in respect of the Directors' valuation
of the Greens Health & Fitness business. The Greens impairment is calculated on
a portfolio basis and reflects the recent slowdown in the health & fitness
market and also the expected effect of increased energy costs coupled with the
first round rent reviews on many properties.
Having taken the impairment charge from the book values of the relevant assets
but, in accordance with the Group's accounting policy, not recognised
revaluation surpluses, the total valuation is #142 million in excess of book
values.
Taxation
Excluding all exceptional items, the Group tax charge in the profit and loss
account represents 28.1% of profit before taxation (2004: 29.8%). The actual
Corporation Tax payable is substantially lower than the profit and loss charge
as a result of the availability of brought forward tax losses and accelerated
capital allowances on our capital expenditure programme.
The sale of The De Vere Belfry enabled the release of #7.4m of the deferred tax
provision as timing differences existing prior to sale will not now reverse.
Significantly, no Capital Gains Tax on the disposal profit will be payable.
Considerable progress has been made during the year regarding the tax position
surrounding the period of the disposal of the two pub estates in 1999 and 2000,
and the trading element of losses have been agreed. This has allowed tax on #147
million of losses, #44.1 million, to be recognised as a deferred tax credit in
the profit and loss account. Assuming the current level of profitability and
investment are maintained, the combination of capital allowances and these tax
losses will result in the Group paying little or no Corporation Tax in the
medium term.
Agreement has yet to be reached with the tax authorities on the capital gains
element of the pub disposals, that are being considered on an asset by asset
basis. The computations submitted indicate that no tax will be payable.
Cash flow
The principal cash movements during the period were an operating cash flow of
#54.9 million (2004: #78.1 million before exceptional outflows of #12.0
million). There was a cash outflow from working capital as timeshare stocks
increased due to the construction of the new lodges at The Carrick. During the
year there was a Corporation Tax refund of #9.6 million (2004: #9.4 million).
Capital expenditure was #59.3 million (2004: #41.9 million) and disposal
proceeds of #198.3 million primarily related to the sale of The De Vere Belfry
and the De Vere Bellhouse.
Net debt, gearing and interest
Net borrowings as at 25 September 2005 amounted to #205.3 million (2004: #202.7
million). Gearing was 40.1% (2004: 33.9%).
Net interest charges for the year of #11.2 million (2004: #12.0 million) include
a #1.6 million interest receipt on a Corporation Tax refund (2004: includes a
#1.1 million interest receipt on a Corporation Tax refund). Excluding all
exceptional items, net interest was covered 4.7 times by operating profit (2004:
4.8 times).
International Financial Reporting Standards ('IFRS')
The Group's transitional IFRS balance sheet, as at 27 September 2004, has been
audited by Ernst & Young LLP. The adoption of IFRS has led to a reduction in net
assets, as illustrated in the table below:
#m
UKGAAP net assets at Sept'04 597.8
Deferred tax (IAS 12) (91.2)
Pension scheme deficit (IAS 19) (23.7)
Remove final dividend accrual (IAS 10) 10.2
Share based payments (IFRS 2) 0.1
Greens impairment (IAS 36) (5.6)
Leases (IAS 17) (2.1)
IFRS net assets at 27 Sept 2004 485.5
The preparation of the 2005 trading results under IFRS is ongoing. The necessary
resource is in place to complete the 2005 comparatives in advance of the 2006
interim statement.
Earnings per share
Basic earnings per share, excluding exceptional items, increased by 9.7% to
30.68 pence (2004: 27.98 pence).
Dividends
The Board is recommending a final dividend of 9.44 pence per Ordinary share
bringing Ordinary dividends for the year to 14.02 pence per share (2004: 13.10
pence).
DE VERE GROUP PLC
PRELIMINARY ANNOUNCEMENT
Consolidated profit and loss account
for the year ended 25 September 2005
-------- -------- ------- ------
Note Before
Exceptional Exceptional
Items Items 2005 2004
#000 #000 #000 #000
-------- -------- ------- ------
Turnover 2 312,031 - 312,031 321,778
Cost of sales (178,624) (39,720) (218,344) (184,630)
-------- -------- ------- ------
Gross profit 133,407 (39,720) 93,687 137,148
Other operating
expenses (net) (80,154) - (80,154) (80,898)
-------- -------- ------- ------
Operating
profit/(loss) 2 53,253 (39,720) 13,533 56,250
Surplus /
(deficit) on
disposal of
properties 3 - 56,663 56,663 (4,709)
Release of
provision
relating to
disposal/closure
of operations 3 - - - 2,100
Interest payable
(net) (11,238) - (11,238) (12,012)
-------- -------- ------- ------
Profit on
ordinary
activities
before
taxation 42,015 16,943 58,958 41,629
Taxation on
profit on
ordinary
activities 4 (11,790) 58,489 46,699 (13,279)
-------- -------- ------- ------
Profit on
ordinary
activities after
taxation 30,225 75,432 105,657 28,350
-------- -------- ------- ------
Special dividend 5 (183,365) -
Ordinary 5
dividend (11,636) (15,110)
------- ------
Total dividends (195,001) (15,110)
------- ------
Transferred
(from)/to
reserves 8 (89,344) 13,240
======= ======
Earnings per
share
Basic 6 107.26p 24.78p
Diluted 6 105.69p 24.48p
Earnings per
share excluding
exceptional
items
Basic 6 30.68p 27.98p
Diluted 6 30.24p 27.64p
DE VERE GROUP PLC
PRELIMINARY ANNOUNCEMENT
Consolidated balance sheet
at 25 September 2005
2005 2004
Note #000 #000
------ --------- ---------
Fixed assets
Tangible assets 714,157 837,841
Investments in joint ventures
--------- ---------
Share of gross assets 13,495 13,470
Share of gross liabilities (4,338) (4,465)
--------- ---------
9,157 9,005
Other investments 1,000 1,150
--------- ---------
Investments 10,157 10,155
--------- ---------
724,314 847,996
--------- ---------
Current assets
Assets held for disposal 14,049 14,049
Stocks 20,252 12,850
Debtors amounts falling due - within one year 37,611 55,360
- after more
than one year 9,510 8,592
Cash at bank and in hand 11,691 5,284
--------- ---------
93,113 96,135
Creditors: amounts falling due within one year (84,412) (90,958)
--------- ---------
Net current assets 8,701 5,177
--------- ---------
Total assets less current liabilities 733,015 853,173
Creditors: amounts falling due in more than one
year (214,959) (201,220)
Provisions for liabilities and charges (6,541) (54,172)
--------- ---------
Net assets 511,515 597,781
========= =========
Capital and reserves
Called up share capital 7 25,866 25,579
Share premium 8 13,976 11,185
Revaluation reserve 8 32,522 95,867
Other reserves 8 271,133 271,133
Profit and loss account 8 168,018 194,017
--------- ---------
Equity shareholders' funds 511,515 597,781
========= =========
DE VERE GROUP PLC
PRELIMINARY ANNOUNCEMENT
Consolidated cash flow statement
for the year ended 25 September 2005
2005 2004
Note #000 #000
------ -------- --------
-------- --------
Net cash inflow from operating activities before
reorganisation costs 9 54,859 78,062
Net cash outflow in respect of reorganisation costs - (12,023)
-------- --------
Net cash inflow from operating activities 54,859 66,039
Returns on investments and servicing of finance
-------- --------
Interest received 2,065 1,214
Interest paid (10,011) (10,014)
Interest element of finance lease rental payments (3,086) (2,752)
-------- --------
Net cash outflow from returns on investments and
servicing of finance (11,032) (11,552)
Tax recovered 9,396 9,152
Capital expenditure and financial investment
-------- --------
Purchase of tangible fixed assets (59,260) (41,898)
Sale of tangible fixed assets *198,263 7,901
-------- --------
Net cash outflow from capital expenditure and
financial investment 139,003 (33,997)
Dividends paid (197,310) (13,707)
-------- --------
Net cash (outflow)/inflow before financing (5,084) 15,935
Financing
-------- --------
Issue of Ordinary share capital (net of costs) 3,078 4,104
Increase/(decrease) in amounts borrowed 8,663 (13,517)
-------- --------
Net cash inflow/(outflow) from financing 11,741 (9,413)
-------- --------
Increase in cash 9 6,657 6,522
======== ========
* #182,714,000 of this amount relates to the final net proceeds from the
disposal of The De Vere Belfry. This transaction has been treated as an
exceptional item in the profit and loss account.
DE VERE GROUP PLC
PRELIMINARY ANNOUNCEMENT
Statement of total recognised gains and losses
for the year ended 25 September 2005
2005 2004
#000 #000
-------- --------
Total recognised gains and losses since the last
annual accounts 105,657 28,350
======== ========
Note of historical cost profits and losses
for the year ended 25 September 2005
2005 2004
#000 #000
-------- --------
Reported profit on ordinary activities before
taxation 58,958 41,629
Difference between a historical cost
depreciation charge and the actual depreciation
charge calculated on the revalued amount 145 240
Revaluation surplus realised on disposal of
assets 53,947 3,264
Revaluation relating to impairment of fixed
assets 9,253 -
-------- --------
Historical cost profit on ordinary activities
before taxation 122,303 45,133
======== ========
Historical cost (loss)/profit retained for the
year after taxation and dividends (25,999) 16,744
Reconciliation of movements in shareholders' funds
for the year ended 25 September 2005
2005 2004
#000 #000
-------- --------
Profit attributable to Ordinary shareholders of
the Company 105,657 28,350
Special dividend (183,365) -
Ordinary dividends (11,636) (15,110)
-------- --------
(89,344) 13,240
Shares issued (net of costs) 3,078 4,104
-------- --------
Net movement in shareholders' funds (86,266) 17,344
Opening shareholders' funds 597,781 580,437
-------- --------
Closing shareholders' funds 511,515 597,781
======== ========
DE VERE GROUP PLC
PRELIMINARY ANNOUNCEMENT
Notes
for the year ended 25 September 2005
1) Basis of the accounts
The financial information set out in the Preliminary Announcement has been
prepared on the same basis as the previous year's annual accounts and in
accordance with applicable UK accounting standards under the historical cost
convention, with the exception of hotel and health & fitness properties which,
under the transitional provisions of FRS15 - Tangible Fixed Assets, are included
at their 1999 valuations. Since 1999 it has been Group policy not to revalue
fixed assets.
The Preliminary Announcement for the financial year ended 25 September 2005 has
been extracted from the Group's audited 2005 statutory accounts, upon which the
auditors' opinion is unqualified. This announcement does not constitute Full
Accounts within the meaning of section 240 of the Companies Act 1985. The 2004
comparatives have been extracted from the audited accounts as filed with
Companies House.
2) Segmental information
2a) Analysis of turnover by class of business
2005 2004
#000 #000
----------- -----------
De Vere 167,298 187,890
Village 81,496 73,846
Greens 32,514 31,234
G&J Greenall 30,723 28,808
----------- -----------
312,031 321,778
=========== ===========
DE VERE GROUP PLC
PRELIMINARY ANNOUNCEMENT
Notes (cont'd)
for the year ended 25 September 2005
2) Segmental information (cont'd)
2b) Analysis of operating profit by class of business
2005 2004
#000 #000
--------- ---------
De Vere 30,414 36,862
Village 17,635 15,818
Greens 3,960 3,462
G&J Greenall 1,244 1,451
--------- ---------
53,253 57,593
Fixed asset impairments (39,720) -
Bid defence costs and aborted acquisition
costs - (1,343)
--------- ---------
---------
13,533 56,250
========= =========
2c) Net assets by class of business
2005 2004
#000 #000
--------- ---------
De Vere* 438,690 537,539
Village 222,938 198,002
Greens 48,856 59,307
G&J Greenall 6,325 5,627
--------- ---------
716,809 800,475
Less: Net borrowings (205,294) (202,694)
--------- ---------
511,515 597,781
========= =========
* Includes share of net assets of joint ventures amounting to #9,157,000 (2004:
#9,005,000). The turnover and operating profit relating to joint ventures is not
material to the above analysis.
Notes (cont'd)
for the year ended 25 September 2005
2d) Reconciliation of EBITDA to operating profit
2005
----------------------------------------------------------------------
De Vere Village Greens G&J Total 2005
Greenall
#000 #000 #000 #000 #000
------- --- ------- --- ------- --- -------- --- ------- ---
EBITDA 41,161 23,565 7,453 1,999 74,178
Depreciation (10,747) (5,930) (3,493) (755) (20,925)
------- --- ------- --- ------- --- -------- --- ------- ---
Operating
profit before
exceptional
items 30,414 17,635 3,960 1,244 53,253
------- --- ------- --- ------- --- -------- --- ------- ---
Exceptional
items:
Fixed asset
impairments (27,004) (4,357) (8,359) - (39,720)
------- --- ------- --- ------- --- -------- --- ------- ---
Operating
profit 3,410 13,278 (4,399) 1,244 13,533
======= === ======= === ======= === ======== === ======= ===
2004
---------------------------------------------------------------------------------
De Vere Village Greens G&J Bid Total
Greenall defence 2004
costs
etc
#000 #000 #000 #000 #000 #000
------- --- ------- --- ------- --- -------- --- ------- --- --------
EBITDA 50,490 21,284 7,190 2,208 - 81,172
Depreciation (13,628) (5,466) (3,728) (757) - (23,579)
------- --- ------- --- ------- --- -------- --- ------- --- --------
Operating
profit before
exceptional
items 36,862 15,818 3,462 1,451 - 57,593
Exceptional
items charge
against
operating
profit - - - - (1,343) (1,343)
------- --- ------- --- ------- --- -------- --- ------- --- --------
Operating
profit 36,862 15,818 3,462 1,451 (1,343) 56,250
======= === ======= === ======= === ======== === ======= === ========
3) Exceptional items
2005 2004
#000 #000
------- -------
Operating exceptional items:
Fixed asset impairments (39,720) -
Aborted Premier Lodge acquisition costs - (385)
Bid defence costs - (958)
------- -------
(39,720) (1,343)
======= =======
Non-operating exceptional items:
Surplus/(deficit) on disposal of properties 56,663 (4,709)
Release of surplus provision on disposal/closure of Tavern - 2,100
------- -------
56,663 (2,609)
======= =======
DE VERE GROUP PLC
PRELIMINARY ANNOUNCEMENT
Notes (cont'd)
for the year ended 25 September 2005
3) Exceptional items (cont'd)
--------- ---------
2005 2004
#000 #000
--------- ---------
Deferred taxation
Tax effect of the disposal of The De Vere Belfry 7,363 -
Prior year taxation losses recognised 44,138 -
Tax effect of fixed asset impairments 6,988 -
--------- ---------
58,489 -
========= =========
All hotels have been valued by external valuers on existing use basis at
September 2005 and the Greens Health & Fitness clubs have been valued by the
Directors. The impairment charge has been calculated in respect of income
generating units. A discount rate of 14% has been applied in arriving at the
"value in use" of Greens' assets.
The #56,663,000 surplus on disposal of fixed assets primarily relates to the
sale and manage-back of The De Vere Belfry, to the Quinn Group, on 16 March
2005.
The 2004 exceptional costs were incurred on the aborted acquisition of Premier
Lodge and in defence of the Guinness Peat Group's partial offer for a further
25% of the Ordinary share capital of the Group. The 2004 release of surplus
provision of #2,100,000 related to the disposal/closure of the drinks
wholesaling business Tavern in 2001 and reflected the Group's success in
resolving a number of historical property issues.
All the previous year's operating exceptional items were paid in the year.
4) Taxation
2005 2004
#000 #000
----------- ----------
UK Corporation tax
- adjustment in respect of prior years - 209
Overseas tax 180 409
----------- ----------
Total current tax 180 618
Deferred tax charge before exceptional items 11,610 12,948
----------- ----------
Tax charge before exceptional items 11,790 13,566
----------- ----------
Deferred tax on exceptional items:
- Prior year adjustment for losses (44,138) -
- Disposal of The De Vere Belfry (7,363) -
- Fixed asset impairments (6,988) -
- Bid defence costs - (287)
----------- ----------
(58,489) (287)
----------- ----------
Total deferred tax (credit)/charge (46,879) 12,661
----------- ----------
Total tax (credit)/charge (46,699) 13,279
=========== ==========
DE VERE GROUP PLC
PRELIMINARY ANNOUNCEMENT
Consolidated balance sheet
at 25 September 2005
In addition to agreeing various historic taxation issues with the tax
authorities during the year, sufficient information has been obtained and
provided to HM Revenue & Customs regarding the disposal of the tenanted and
managed public houses, in 1999 and 2000 respectively, to enable the Directors to
recognise losses as being available to offset against future taxable profits.
This has given rise to a deferred tax credit of #44,138,000.
There is no tax charge on the capital gain realised on the disposal of The De
Vere Belfry, as this gain will be rolled over into the Group's capital
expenditure.
A deferred tax provision, arising from timing differences between capital
allowances and depreciation of #7,363,000 has been released following the
disposal of The De Vere Belfry.
There is a taxation credit of #6,988,000 relating to the fixed asset impairment
charge.
In 2004 the deferred tax credit of #287,000 related to the exceptional charge
for bid defence costs.
5) Dividends
2005 2004 2005 2004
pence pence #000 #000
--------- -------- -------- --------
Interim (paid on 18 June 2005) 4.58 4.28 3,780 4,945
Proposed final 9.44 8.82 7,856 10,165
--------- -------- -------- --------
Ordinary dividend 14.02 13.10 11,636 15,110
========= ======== ======== ========
Special dividend (paid on 29
March 2005) 159.00 - 183,365 -
========= ======== ======== ========
Total dividends 173.02 13.10 195,001 15,110
========= ======== ======== ========
The final dividend is expected to be paid on 17 February 2006 to holders of
Ordinary shares on the register at close of business on 20 January 2006. The
provisional ex-dividend date for the Ordinary shares is 18 January 2006.
The special dividend of 159 pence per share was paid following the disposal of
The De Vere Belfry.
DE VERE GROUP PLC
PRELIMINARY ANNOUNCEMENT
Notes (cont'd)
for the year ended 25 September 2005
6) Earnings per share
Basic earnings per share is calculated with reference to the earnings
attributable to Ordinary shareholders of #105,657,000 (2004: #28,350,000) and
the weighted average number of Ordinary shares in issue during the year of
98,504,000 (2004: 114,418,000).
Diluted earnings per share is basic earnings per share adjusted for all dilutive
share options. Diluted earnings for the year were #105,657,000 (2004:
#28,350,000) and the weighted average number of ordinary shares was 99,967,000
(2004: 115,832,000)
Adjusted earnings per share figures are disclosed based on the elimination from
earnings of exceptional items.
Prior year earnings per share figures have not been adjusted following the
payment of the special dividend and subsequent five for seven share
consolidation.
2005 2004
pence pence
--------- ---------
Basic:
Earnings per Ordinary share 107.26 24.78
Exceptional items - surplus on disposal of properties (57.52) 4.12
- fixed asset impairments 40.32 -
- taxation credits (59.38) (0.92)
--------- ---------
Adjusted basic earnings per share 30.68 27.98
========= =========
Diluted:
Earnings per Ordinary share 105.69 24.48
Exceptional items - surplus on disposal of properties (56.68) 4.07
- fixed asset impairments 39.73 -
- taxation credits (58.50) (0.91)
--------- ---------
Adjusted diluted earnings per share 30.24 27.64
========= =========
7) Share Capital
On 10 February 2005 the Board announced the sale of The De Vere Belfry hotel for
#186 million and the return of the net proceeds to shareholders by way of a
special dividend of 159 pence per share, amounting to #183.4 million. On 21
March 2005 a five for seven share consolidation was undertaken in order to
maintain comparability of share prices, earnings and dividends per share before
and after payment of the special dividend. The effect of this exercise was to
reduce the number of shares in issue from 115,323,880 shares with a nominal
value of 222/9 pence to 82,374,200 shares, with a nominal value of 311/9 pence.
DE VERE GROUP PLC
PRELIMINARY ANNOUNCEMENT
Consolidated balance sheet
at 25 September 2005
8) Reserves
-------- -------- -------- -------- --------
Share Revaluation Other Profit and Total
Premium reserve reserve loss account #000
#000 #000 #000 #000
-------- -------- -------- -------- --------
At 26 September 2004 11,185 95,867 271,133 194,017 572,202
Premium on shares
issued 2,791 - - - 2,791
Realised revaluation
surplus - (54,092) - 54,092 -
Fixed asset
impairments - (9,253) - 9,253 -
Loss for the year - - - (89,344) (89,344)
-------- -------- -------- -------- --------
At 25 September 2005 13,976 32,522 271,133 168,018 485,649
======== ======== ======== ======== ========
9) Notes to the consolidated cash flow statement
a) Reconciliation of operating profit to net cash inflow from operating
activities before reorganisation costs
2005 2004
#000 #000
-------- ----------
Operating profit 13,533 56,250
Depreciation 20,925 23,579
Fixed assets impairments 39,720 -
Decrease in provision for liabilities (752) (1,386)
Share of operating profit of joint venture (152) (68)
(Increase)/decrease in stocks (7,402) 1,446
(Increase)/decrease in debtors (6,797) (2,382)
(Decrease)/increase in creditors (4,216) 623
-------- ----------
Net cash inflow from operating activities before
reorganisation costs 54,859 78,062
======== ==========
b) Reconciliation of net cash flow to movement in net borrowings
2005 2004
#000 #000
-------- ----------
Increase in cash 6,657 6,522
Cash (inflow)/outflow from movement in borrowings (8,663) 13,517
-------- ----------
Change in net borrowings resulting from cash flows (2,006) 20,039
Other non-cash adjustments to long term borrowings (594) (252)
-------- ----------
Movement in net borrowings (2,600) 19,787
Opening net borrowings (202,694) (222,481)
-------- ----------
Closing net borrowings (205,294) (202,694)
======== ==========
DE VERE GROUP PLC
PRELIMINARY ANNOUNCEMENT
Notes (cont'd)
for the year ended 25 September 2005
c) Analysis of changes in net borrowings during the year
Non cash
2004 Items Cashflow 2005
#000 #000 #000 #000
--------- --------- --------- ---------
Cash at bank and in hand 5,284 - 6,407 11,691
Bank overdrafts (411) - 250 (161)
--------- --------- --------- ---------
4,873 - 6,657 11,530
Other short-term borrowings (6,347) - 4,482 (1,865)
Long-term borrowings (201,220) (594) (13,145) (214,959)
--------- --------- --------- ---------
(202,694) (594) (2,006) (205,294)
========= ========= ========= =========
10) Post balance sheet events
Since the year-end, in October 2005, G&J Greenall had a serious fire that
destroyed the bottling plant and warehouse. The distillery was not badly damaged
and production of gin and vodka resumed within one week. Subject only to a minor
excess, the property and stock are insured as is any consequential loss of
profit for up to two years.
11) Other information
Copies of the 2005 Annual Report and Accounts will be posted to all shareholders
in January 2006. Copies will be available to the public on request from the De
Vere Group Plc, 2100 Daresbury Park, Daresbury, Warrington, Cheshire, WA4 4BB or
can be downloaded from the corporate website at www.deveregroupplc.co.uk.
The Annual General Meeting of De Vere Group Plc will be held at De Vere
Daresbury Park, Chester Road, Daresbury, Warrington, Cheshire, WA4 4BB, on 10
February 2006 at 11:30 a.m.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR DXBDBIGDGGUC
Read the news article:http://fr.advfn.com/actualites/gb/Final-Results_13351610.html
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