TIDMPHO
RNS Number : 3924E
Peel Hotels PLC
18 October 2018
PEEL HOTELS PLC
INTERIM RESULTS
For 28 weeks ended 12 August 2018
-- Sales decreased 6.4% to GBP8,096,128 (2017: GBP8,648,145)
-- Operating Profit decreased 63.4% to GBP221,498 (2017: GBP604,556)
-- Revpar decreased 3.1%. Occupancy down 6.4%, average room rate up 3.5%
-- Profit before tax decreased to GBP8,972 (2017: GBP319,293)
-- Net Debt increased by GBP406,048 (timing difference)
-- Earnings per share
Basic 0.1p (2017: 1.8p)
Diluted 0.1p (2017: 1.8P)
Chairman Robert Peel said 'The comparative shortfall in EBITDA
in the first three periods will be difficult to make up by the end
of the financial year however sales have now stabilised and for the
first time in many periods increased in the current period, ended
07 October 2018. EBITDA is broadly neutral from a comparative point
of view over the last three periods to 07 October 2018.
If we can consistently achieve increases in sales, our profits
will quickly return to growth. We have recently signed up a
marketing agreement with Best Western Hotels and hope to derive
additional sales benefit from this partnership going forward.'
Press enquiries: 0207 266 1100
Nominated advisor and Broker: 0207 418 8900
Peel Hunt LLP
Capel Irwin
CHAIRMAN'S STATEMENT
Results
In the 28 weeks to 12 August 2018 hotel revenues decreased 6.4%
to GBP8,096,128 (2017: GBP8,648,145). Hotel gross profit before
depreciation and Group administration decreased 33.9% to GBP994,067
(2017: GBP1,503,402). Over the same period EBITDA (earnings before
interest, tax and depreciation) decreased 42.0% to GBP649,534
(2017: GBP1,119,749) and operating profit decreased 63.4% to
GBP221,498 (2017: GBP604,556).
Revpar (accommodation revenue per available room) decreased 3.1%
with occupancy down 6.4% and average room rate up 3.5%.
Administration expenses decreased 10.2% to GBP344,533 and
depreciation decreased 16.9% to GBP428,036.
Financial charges decreased by 25.5% to GBP212,526.
Profit before tax was GBP8,972 compared to a profit of
GBP319,293 last year.
Corporation tax has been provided at an effective rate of 19%.
Basic earnings per share were 0.1p compared with 1.8p in the
comparative period on a weighted average of 14,012,123 (14,012,123)
shares in issue.
We referred in the Annual Report to the continuing slowdown in
demand in the majority of Provincial areas of the United Kingdom
and that, together with upward pressure from increases in living
wages, business rates and energy has created challenges to the
profitability of the Group. 64% of the GBP470,215 shortfall in
EBITDA occurred in the first three Periods of the current financial
year clearly illustrating the operational gearing of our
business.
We decreased our overall wage costs and Group overheads and
benefited from a GBP72,737 reduction in finance costs in the
period.
Finance
On 12 August 2018 net debt stood at GBP8,859,610 representing
loans totalling GBP9,514,534 less GBP654,924 cash at bank. Gearing
on Shareholders' funds was 38.4% with interest covered 1.04 times.
Net debt increased by GBP406,048 compared with the previous year
end, due to timing differences.
As previously reported in our Annual Report, on 22 April 2018
the Company breached its financial covenants, which breach 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. As a
result of the breach the borrowings of the Group are presented on
the Group balance sheet as current liabilities.
Whilst your Directors recognise that the breach of covenant,
combined with a challenging trading outlook, results in material
uncertainty for the Company, and increases the possibility that the
Company 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 ability to continue as a going
concern, they are confident that the Company has adequate resources
to meet its commitments.
Capital expenditure
We spent GBP151,885 in the period (2017: GBP369,516). We plan to
spend a total of GBP500,000 in this financial year on our strategy
of continually improving the standards offered in our portfolio of
hotels and maintaining the fabric of our buildings. This sum is in
addition to a significant sum expensed to the Income Statement on
repairs and renewals.
Shareholders
We are always delighted to welcome Shareholders to our Hotels
where they can see for themselves the progress we have made, whilst
enjoying a beneficial discount of 50% of our rack rate tariff,
using a special reservations number 0207 266 1100 or e-mail
info@peelhotel.com Shareholders can keep in touch with progress in
the company and various promotional activities by visiting our
website www.peelhotels.co.uk
The Future
The comparative shortfall in EBITDA in the first three periods
will be difficult to make up by the end of the financial year
however sales have now stabilised and for the first time in many
periods increased in the current period, ended 07 October 2018.
EBITDA is broadly neutral from a comparative point of view over the
last three periods to 07 October 2018.
We have recently signed up a marketing agreement with Best
Western Hotels and hope to derive additional sales benefit from
this partnership going forward. If we can consistently achieve
sales growth our profits will quickly return to growth.
Robert Peel
Chairman
18 October 2018
DIRECTORS AND ADVISORS
Directors
Robert Edmund Guy Peel Executive Chairman
Nicholas David Lawton Parrish Financial Director
Norbert Paul Gottfried Petersen Non-executive Director
Haydn Herbert James Fentum Non-executive Director
Secretary
Thrings LLP
20 St Andrew Street, London EC4A 3AG
Registered Office
7(th) Floor, 20 St Andrew Street, London EC4A 3AG
Company registration number 3473990
Auditor
Grant Thornton UK LLP
No. 1 Whitehall Riverside, Leeds, LS1 4BN
Bankers
Allied Irish Bank Plc
Berkeley Square, Mayfair, London W1J 6AA
Registrars
Computershare Services Plc
The Pavilions, Bridgewater Road, Bristol BS13 8AE
Solicitors
Thrings LLP
20 St Andrew Street, London EC4A 3AG
Stockbroker
Peel Hunt LLP
Moor House, 120, London Wall, London EC2Y 5ET
GROUP STATEMENT OF COMPREHENSIVE INCOME
for the 28 weeks ended 12 August 2018
Unaudited Unaudited Audited
28 weeks 28 weeks Year
ended ended ended
12/08/2018 13/08/2017 28/01/2018
Note GBP GBP GBP
------------------------- ------------ ------------- ------------ ------------- -------------- --------------
Revenue 8,096,128 8,648,145 16,097,313
Cost of sales (7,102,061) (7,144,743) (13,588,380)
------------------------- ------------ ------------- ------------ ------------- -------------- --------------
Gross profit 994,067 1,503,402 2,508,933
Administration
expenses (344,533) (383,653) (675,322)
Exceptional expense - - (1,161,241)
Depreciation (428,036) (772,569) (515,193) (940,496)
Total admin. expenses (898,846) (2,777,059)
------------------------- ------------ ------------- ------------ ------------- -------------- --------------
Operating profit 221,498 604,556 (268,126)
Finance expense (212,526) (285,263) (466,860)
------------------------- ------------ ------------- ------------ ------------- -------------- --------------
Profit before tax 8,972 319,293 (734,986)
Income tax 3 (1,705) (63,856) (109,286)
------------------------- ------------ ------------- ------------ ------------- -------------- --------------
Profit and total comprehensive
income for the period
attributable
to owners 7,267 255,437 (844,272)
--------------------------------------- ------------- ------------ ------------- -------------- --------------
Earnings per share
Basic & diluted
(pence) 4 0.1 1.8 (6.0)
------------------------- ------------ ------------- ------------ ------------- -------------- --------------
GROUP STATEMENT OF CHANGES IN EQUITY
for the 28 weeks ended 12 August 2018
28 weeks ended 13 August
2017 Share Profit
Share Premium and loss
Unaudited Capital Account account Total
GBP GBP GBP GBP
--------------------------------- ------------ ------------ ------------- -------------
Balance brought forward
at 30 January 2017 1,401,213 9,743,495 12,775,387 23,920,095
Profit and total comprehensive
income for the period - - 255,437 255,437
Transactions with owners
Dividend - - - -
--------------------------------- ------------ ------------ ------------- -------------
Balance at 13 August
2017 1,401,213 9,743,495 13,030,824 24,175,532
--------------------------------- ------------ ------------ ------------- -------------
12 months ended 28 January
2018 Share Profit
Share Premium and loss
Audited Capital Account account Total
GBP GBP GBP GBP
--------------------------------- ------------ ------------ ------------- -------------
Balance brought forward
at 30 January 2017 1,401,213 9,743,495 12,775,387 23,920,095
Profit and total comprehensive
income for the period - - (844,272) (844,272)
Transactions with owners
Dividend - - - -
--------------------------------- ------------ ------------ ------------- -------------
Balance at 28 January
2018 1,401,213 9,743,495 11,931,115 23,075,823
--------------------------------- ------------ ------------ ------------- -------------
28 weeks ended 12 August
2018 Share Profit
Share Premium and loss
Unaudited Capital Account account Total
GBP GBP GBP GBP
--------------------------------- ------------ ------------ ------------- -------------
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 - - 7,267 7,267
Transactions with owners
Dividend - - - -
--------------------------------- ------------ ------------ ------------- -------------
Balance at 13 August
2017 1,401,213 9,743,495 11,938,382 23,083,090
--------------------------------- ------------ ------------ ------------- -------------
GROUP BALANCE SHEET
at 12 August 2018
12/08/2018 13/08/2017 28/01/2018
Unaudited Unaudited Audited
GBP GBP GBP
--------------------------------- ------------- ------------- -------------
Assets
Non-current assets
Property, plant and equipment 33,830,224 35,356,887 34,106,375
--------------------------------- ------------- ------------- -------------
Total non-current assets 33,830,224 35,356,887 34,106,375
Current assets
Inventories 105,845 119,332 109,271
Trade and other receivables 400,086 529,006 276,988
Prepayments 836,567 898,662 568,070
Cash at bank and in hand 654,924 423,293 1,287,277
--------------------------------- ------------- ------------- -------------
Total current assets 1,997,422 1,970,293 2,241,606
--------------------------------- ------------- ------------- -------------
Total assets 35,827,646 37,327,180 36,347,981
--------------------------------- ------------- ------------- -------------
Equity and liabilities
Equity attributable to owners
Share capital 1,401,213 1,401,213 1,401,213
Share premium 9,743,495 9,743,495 9,743,495
Retained earnings 11,938,382 13,030,824 11,931,115
--------------------------------- ------------- ------------- -------------
Total equity 23,083,090 24,175,532 23,075,823
Liabilities
Non-current
Borrowings (due after one
year) - 765,203 9,240,839
Deferred tax liabilities 824,009 861,330 824,009
--------------------------------- ------------- ------------- -------------
Non-current liabilities 824,009 1,626,533 10,064,848
Current
Trade and other payables 2,333,394 2,583,530 2,636,396
Borrowings (due within one
year) 9,514,534 8,817,422 500,000
Current tax liabilities 72,619 124,163 70,914
--------------------------------- ------------- ------------- -------------
Current liabilities 11,920,547 11,525,115 3,207,310
--------------------------------- ------------- ------------- -------------
Total liabilities and equity 35,827,646 37,327,180 36,347,981
--------------------------------- ------------- ------------- -------------
GROUP CASH FLOW STATEMENT
for the 28 weeks ended 12 August 2018
Unaudited Unaudited Audited
28 weeks 28 weeks Year
ended ended ended
12/08/2018 13/08/2017 28/01/2018
GBP GBP GBP
---------------------------------------- ------------ ------------ --------------
Cash flows from operating activities
Profit for the period 7,267 255,437 (844,272)
Adjustment for:
Finance expense 212,526 285,263 466,860
Income tax expense 1,705 63,856 109,286
Depreciation 428,036 515,193 2,101,737
---------------------------------------- ------------ ------------ --------------
Cash flows before changes in
working capital and provisions
649,534 1,119,749 1,833,611
UK corporation tax paid
(Increase)/decrease in trade
and other receivables - (56,142) (192,142)
(Decrease)/increase in trade
and other payables (391,595) (397,013) 383,811
Decrease/(increase) in inventories (317,591) 408,699 437,903
3,426 (5,298) 4,763
---------------------------------------- ------------ ------------ --------------
Net cash from operating activities (56,226) 1,069,995 2,467,946
---------------------------------------- ------------ ------------ --------------
Cash flows from investing activities
Acquisition of property, plant
and equipment (151,885) (369,516) (705,548)
---------------------------------------- ------------ ------------ --------------
Net cash from investing activities (151,885) (369,516) (705,548)
---------------------------------------- ------------ ------------ --------------
Cash flows from financing activities
Interest paid (174,242) (324,839) (661,192)
New loan - - 9,740,840
Loan repayments (250,000) (245,000) (9,847,422)
---------------------------------------- ------------ ------------ --------------
Net cash from financing activities (424,242) (569,839) (767,774)
---------------------------------------- ------------ ------------ --------------
Net (decrease)/increase in cash
and cash equivalents (632,353) 130,640 994,624
---------------------------------------- ------------ ------------ --------------
Cash and cash equivalents at
the
beginning of the period 1,287,277 292,653 292,653
---------------------------------------- ------------ ------------ --------------
Cash and cash equivalents at
the
end of the period 654,924 423,293 1,287,277
---------------------------------------- ------------ ------------ --------------
For the purposes of the cash
flow statement, cash and cash
equivalents comprise:
Cash and bank balances 654,924 423,293 1,287,277
NOTES TO THE INTERIM RESULTS
for the period ended 12 August 2018
1. Basis of accounting
The interim financial information for the period ended 12 August
2018 has been prepared applying the accounting policies and
presentation of the Group's published consolidated financial
statements for the year ended 28 January 2018.
The financial information contained in the interim report does
not constitute statutory accounts within the meaning of section 434
of the Companies Act 2006 and does not include all of the
information and disclosures required for complete financial
statements. The financial information in the interim report does
not constitute statutory accounts as defined by section 434 of the
Companies Act 2006 and has not been audited or reviewed.
The financial information relating to the year ended 28 January
2018 is an extract from the latest published financial statements
on which the auditor gave an unmodified report that did not contain
statements under section 498(2) or 498(3) of the Companies Act 2006
and which have been filed with the Registrar of Companies. The
auditor's opinion, whilst unmodified, included an emphasis of
matter in relation to going concern.
2. Accounting policies
The condensed, consolidated financial statements in this
half-yearly financial report for the period ended 12 August 2018
have been prepared in accordance with the AIM Rules for Companies
and on a basis consistent with the accounting policies and methods
of computation consistent with those set out in the Annual Report
and financial statements for the year ended 28 January 2018, except
as described below. The Group has chosen not to adopt IAS 34
'Interim Financial Statements' in preparing these interim financial
statements and therefore the Interim financial information is not
in full compliance with International Financial Reporting
Standards.
In preparing the condensed, consolidated financial statements,
management are required to make accounting assumptions and
estimates. The assumptions and estimation methods are consistent
with those applied to the Annual Report and financial statements
for the year ended 28 January 2018, except for the adoption of IFRS
15 "Revenue from Contracts with Customers" and IFRS 9 "Financial
Instruments". The Directors have concluded that the adoption of
these accounting standards has not had a material impact on the
financial statements. The Group's accounting policies are based on
the recognition and measurement principles of International
Financial reporting Standards as adopted by the EU. Additionally
the principal risks and uncertainties that may have a material
impact on activities and results of the Group remain materially
unchanged from those described in that Annual Report.
3. Taxation
Tax has been provided at a rate of 19% which represents the
expected effective rate for the full year.
4. Earnings per share
Earnings per share are based on the profit after taxation and on
the weighted average number of shares in issue during the
period.
28 weeks 28 weeks Year
ended ended ended
12/8/2018 13/8/2017 28/1/2018
Unaudited Unaudited Audited
--------------------------- ------------- ------------- -------------
Average No.shares -Basic 14,012,123 14,012,123 14,012,123
-Diluted 14,012,123 14,012,123 14,012,123
--------------------------- ------------- ------------- -------------
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END
IR MRBATMBTBBMP
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October 18, 2018 02:00 ET (06:00 GMT)
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