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Elegant Hotels Group plc

Elegant Hotels Group plc A solid performance and revenues up 7.6%

Elegant Hotels Group plc LON:EHG owner and operator of five upscale freehold beachfront hotels and a beachfront restaurant on the island of Barbados, has this morning announced its unaudited results for the six months ended 31 March 2015.

 

All currency amounts are in US$ unless otherwise stated.

 

Highlights

· A solid performance with year-on-year growth in all key operating measures

· Total reported revenue increase of 7.6% to $36.4million (2014: $33.9million)

· RevPAR (Revenue Per Available Room) growth of 7.8% to $319 (2014: $296) reflecting strong average room rate performance and refurbishment programme

· Continued growth in occupancy to 71.0% (2014: 68.7%)

· Adjusted EBITDA before exceptional items $16.3million (2014: $14.6million) reflecting improvements in rates and control of costs

· Property asset value of $235.5million based on an independent valuation of the Group’s real estate portfolio dated 15 April 2015

· Successfully completed £63.0million placing and admission to AIM

 

 

Sunil Chatrani, CEO of Elegant Hotels Group plc said: “We are pleased with the continuing performance of Elegant Hotels in the past six months in what is our peak trading period. We benefitted from the refurbishment of Colony Club and the improvements we have made at our other hotels over the last few years, combined with efficient revenue management.

“With a solid first half year performance that was ahead of last year we are anticipating the summer months to be in line with expectations. Looking forward we will focus on delivering sustainable returns and generating value for our shareholders as we pursue further growth from the existing portfolio as well as expansion in the Caribbean.”

 

 

Operating Review

We are pleased to report the first set of results for Elegant Hotels as an AIM listed company, following the Company’s successful £63.0million placing (raising £32.2million for the Company and £30.8million for selling shareholders) and Admission to AIM on 26 May 2015.

 

These interim results for the six months ended 31 March 2015 represent a period during which the business was under private equity ownership before its Admission to AIM and therefore reflect its capital structure at that time. Subsequent to the period end senior debt of approximately £27million has been repaid with proceeds of the placing and the Company’s existing credit facilities were amended to provide for senior debt of up to approximately £33million going forward.

 

Our trading performance in the six months ended 31 March 2015 is consistent with the unaudited results for the 5 months ended 28 February 2015 that were disclosed in the Company’s Admission Document. In the 6 months ended 31 March 2015 revenue has increased by 7.6% to $36.4million (2014: $33.9million). This is based on improvements in average room rate in the high season from December to February supported by the benefits from our refurbishment programme and the efficiencies of our revenue management processes.

 

Adjusted EBITDA of $16.3million (2014: $14.6million) has increased by 11.7% reflecting improvements at each of the hotels and at Daphne’s Restaurant and control of overhead costs which were down 2.3%, as a percentage of sales, to $11.3million (2014: $11.2million).

 

Pre-tax profit increased in the 6 months to 31 March 2015 to $12.1million (2014: $10.6million), an increase of 14.5% on the previous year.

 

Colony Club has traded well during the period with revenue and bookings showing the impact of recent refurbishment. All rooms will have been refurbished by the end of this fiscal year. Turtle Beach suffered some disruption from the refurbishment works at the hotel next door which affected bookings but the work is now complete.

 

Airlift to the island is increasing and there is good underlying growth in demand for Barbados. With the major part of this financial year behind us and current trading in line with expectations the Board views the outlook for the Group with confidence.

Operational Measurements

Period ended
31 March 2015

Period ended
31 March 2014

% movement

·    Total room count

483

483

·    Occupancy

71.0%

68.7%

+ 2.3%

·    ADR

$450

$431

+ 4.3%

·    RevPAR

   $319 

$296

+ 7.8%

·    Total Revenue

$36.4m

$33.9m

+ 7.6%

 

Dividends and Share Capital Reduction plans

As stated at the time of the Company’s Admission to AIM, it is the intention of the Board to implement a progressive dividend policy in line with the growth in future earnings.

In order to facilitate the payment of dividends for the current year it is necessary to create distributable reserves, so the Company is proposing to effect a court-approved share capital reduction. A circular will be posted to shareholders on the date of this announcement convening a general meeting at 10.00 a.m. on 23 July 2015 at the offices of Macfarlanes LLP, 20 Cursitor Street, London EC4A 1LT to reduce the Company’s share premium account by £31.9million. The share capital reduction is subject to court approval.

 

Consolidated Statement of Comprehensive Income

for the 6 month period ended 31 March 2015 (unaudited)

(expressed in thousands of United States dollars)

6 months to 31 March

6 months to 31 March

12 months to 30 September

2015

2014

2014

Sales

36,427

33,865

57,619

Cost of sales

(11,906)

(11,346)

(22,140)

                   

                   

                   

Gross profit

24,521

22,519

35,479

Selling, general and administrative expenses

(10,829)

(10,790)

(21,680)

Other income

369

505

900

Interest expense

(1,924)

(1,630)

(3,274)

                   

                   

                   

Profit before taxation

12,137

10,604

11,425

Corporation tax expense

(2,164)

(1,861)

(2,035)

                   

                   

                   

Net profit and other comprehensive income

 for the year

9,973

8,743

9,390

                   

                   

                   

Earnings per share

Basic and diluted earnings per share (in cents)

17.7

15.9

16.7

 

Consolidated balance sheet

as at 31 March 2015 (unaudited)

 

(expressed in thousands of United States dollars)

  As at 31 March

As at 31 March

As at 30

September

2015

2014

2014

Assets

Non-current assets

Property, plant and equipment

145,298

144,818

144,888

Deferred tax

4,424

5,190

5,034

                   

                   

                   

Total non-current assets

149,722

150,008

149,922

                   

                   

                   

Current assets

Inventories

2,940

2,375

2,195

Accounts receivable

5,683

5,480

2,594

Prepaid expenses

330

1,221

1,398

Short-term investments

438

414

428

Cash

16,283

10,108

12,192

                   

                   

                   

Total current assets

25,674

19,598

18,807

                   

                   

                   

Total assets

175,396

169,606

168,729

                   

                   

                   

Non-current liabilities

Long-term loan

(108,705)

(114,687)

(110,876)

                   

                   

                   

Current liabilities

Current portion of long-term loan

(4,409)

(3,622)

(6,500)

Accounts payable and accrued liabilities

(5,850)

(7,065)

(5,373)

Advance deposits

(1,740)

(1,309)

(2,481)

Corporation tax payable

(1,520)

(371)

(299)

                   

                   

                   

Total current liabilities

(13,519)

(12,367)

(14,653)

                   

                   

                   

Total liabilities

(122,224)

(127,054)

(125,529)

                   

                   

                   

Net assets

53,172

42,552

43,200

                   

                   

                   

Shareholders’ equity

Share capital

905

905

905

Share premium

Merger reserve

33,497

33,497

33,497

Revaluation reserve

38,321

39,475

38,898

Retained earnings

(19,551)

(31,324)

(30,100)

                   

                   

                   

Total shareholders’ equity

53,172

42,552

43,200

                   

                   

                   

 

 

 

Consolidated Cashflow Statement

for the 6 month period ended 31 March 2015 (unaudited)

(expressed in thousands of United States dollars)

6 months to

31 March

6 months to

31 March

12 months to

30 September

2015

2014

2014

Net income

9,973

8,743

9,390

Taxation

2,164

1,861

2,035

                   

                   

                   

Net income before tax

12,137

10,604

11,425

                   

                   

                   

Adjustments for:

Depreciation

1,538

1,531

3,100

Interest

1,924

1,630

3,274

                   

                   

                   

Operating profit before working capital changes

15,599

13,765

17,799

Increase in receivables

(3,090)

(3,326)

(438)

Increase in inventories

(745)

(466)

(286)

Decrease/(increase) in prepaid expenses

1,067

(98)

(274)

Increase in short term investments

(10)

(10)

(24)

Increase/(decrease) in accounts payable and

 accrued liabilities

478

1,136

(557)

(Decrease)/increase in advance deposits

(741)

(581)

591

                   

                   

                   

Cash from operations

12,558

10,420

16,811

                   

                   

                   

Interest

(1,924)

(1,630)

(3,274)

Taxes paid

(333)

(62)

(151)

                   

                   

                   

Net cash from operating activities

10,301

8,728

13,386

                   

                   

                   

Cash flows from investing activities

Purchase of Daphne’s land

(4,241)

(4,319)

Purchase of property, plant and equipment

(1,948)

(1,973)

(3,536)

                   

                   

                   

Net cash used in investing activities

(1,948)

(6,214)

(7,855)

                   

                   

                   

Cash flows from financing activities

Financing received for the purchase of Daphne’s land

(1,414)

5,600

2,828

Decrease in long-term loan

(2,848)

(7,913)

(6,074)

                   

                   

                   

Net cash used in financing activities

(4,262)

(2,313)

(3,246)

                   

                   

                   

Increase in cash and cash equivalents

4,091

201

2,285

Cash and cash equivalents – beginning of the period

12,192

9,907

9,907

                   

                   

                   

Cash and cash equivalents – end of the period

16,283

10,108

12,192

                   

                   

                   

 

Consolidated Statement of Changes in Equity

for the 6 month period ended 31 March 2015 (unaudited)

(expressed in thousands of United States dollars)

Share

capital

Merger

reserve

Revaluation reserve

Retained

earnings

Total

equity

6 months to 31 March 2015

 

Balance at 30 September 2014

 

905

 

33,497

 

38,898

 

(30,100)

 

43,200

Total comprehensive income for the period

9,973

9,973

Surplus realised on depreciation

(577)

577

                   

                   

                   

                   

                   

Balance at 31 March 2015

905

33,497

38,321

(19,551)

53,172

                   

                   

                   

                   

                   

6 months to 31 March 2014

 

Balance at 30 September 2013

 

905

 

33,497

 

40,051

 

(40,643)

 

33,810

Total comprehensive income for the period

8,743

8,743

Surplus realised on depreciation

(576)

576

                   

                   

                   

                   

                   

Balance at 31 March 2014

905

33,497

39,475

(31,324)

42,552

                   

                   

                   

                   

                   

12 months to 30 September 2014

 

Balance at 30 September 2013

 

905

 

33,497

 

40,051

 

(40,643)

 

33,810

Total comprehensive income for the period

9,390

9,390

Surplus realised on depreciation

(1,153)

1,153

                   

                   

                   

                   

                   

Balance at 30 September 2014

905

33,497

38,898

(30,100)

43,200