Wrap Text
Financial Statements For The Six Months Ended 29 February 2016
International Hotel Group Limited
(previously RBDL Investments Limited)
(Incorporated in the British Virgin Islands)
(Company number 1862176)
JSE share code: IHL
ISIN: VGG7396G1046
("IHL" or the "Company" or the "Group")
FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 29 FEBRUARY 2016
IHL, the hotel and leisure focused property investment company, announces its results for the six months ended 29
February 2016.
Group Highlights:
- First dividend declared of 2.5 pence per issued share
- Holiday Inn Express Dunstable performing ahead of expectations
- Debt security effected to take ownership of three Travelodge hotels
- Significant positive post period end activity:
- Additional GBP7 million of equity raised
- Acquisition of a Hampton by Hilton at Gatwick Airport
- Acquisition of a further two Holiday Inn Express hotels
- Acquisition and internalisation of third party asset management company
- Completion of the Travelodge Belvedere development
- Eight hotels now owned with 974 bedrooms
- Basic and diluted loss per share of 3.78 pence
- Headline and diluted headline loss per share of 3.78 pence
Helder Pereira, Chairman, commented:
"The Group has remained focused on acquiring good, branded UK hotel assets. Our existing trading hotel continues
to perform ahead of expectations and, following the acquisition of three further hotels and the completion of the
Travelodge Belvedere development post period end, IHL now owns a total of eight hotels.
As anticipated, we have continued to incur certain one-off establishment costs which have led to the loss of GBP979,181,
but it is expected that such costs will no longer apply going forward. The Board is pleased to announce IHL's maiden
dividend of 2.5 pence per share reflecting its confidence in the future profitability of the Company.
Post period end, the asset management function has been internalised to align the interests of its shareholders and key
management and an additional GBP7 million of capital has been raised. Furthermore the Board is currently investigating
a transfer of listing to the main board of the JSE."
Dividend timetable
The salient dates and times of the dividend for shareholders on the European share register and shareholders on the
South African register are set out below:
2016
Announcement of finalisation information including the British Pound to Rand conversion Thursday, 2 June
rate on
Last day to trade on the LuxSE and JSE in order to be eligible for receipt of the dividend Thursday, 9 June
on
Trading commences ex-dividend on Friday, 10 June
Record date for shareholders recorded on the European and South African share registers Friday, 17 June
on
Payment of the cash dividend on Monday, 20 June
Shares may not be dematerialised or rematerialised, nor may transfers of shares between sub-registers in Luxembourg
and South Africa take place between Thursday, 9 June 2016 and Friday, 17 June 2016, both days inclusive.
M Partners
Luxembourg listing agent +352 263 868 602
Java Capital
JSE sponsor +27 (0) 11 722 3050
FTI Consulting
South African Public Relations Advisor
Max Gebhardt +27 (0) 11 214 2402
Company Secretary
Osiris Secretarial Services Ltd +1 (284) 494 9820
19 May 2016
Notes to editors:
IHL is a hotel and leisure focused property investment company which owns eight hotels in the UK. The Company's
shares are currently listed on the Euro MTF Market of the Luxembourg Stock Exchange, which constitutes its primary
listing, and on the AltX of the JSE which constitutes its secondary listing.
Financial Statements
Half year report and Financial Statements for the six months ended 29 February 2016
INTERNATIONAL HOTEL GROUP LTD
(BVI Company number: 1862176)
Half year report and Financial Statements for the six months ended 29 February 2016
GROUP HIGHLIGHTS AND EXECUTIVE DIRECTOR SUMMARY
For the six months ended 29 February 2016
INTERNATIONAL HOTEL GROUP LTD
GROUP HIGHLIGHTS AND EXECUTIVE DIRECTOR SUMMARY
For the six months ended 29 February 2016
GROUP HIGHLIGHTS
- First dividend declared of 2.5p per issued share
- Holiday Inn Express Dunstable performing ahead of expectations
- Debt security effected to take ownership of three Travelodges
- Significant positive post period end activity:
- Additional £7 million of equity raised
- Acquisition of a Hampton by Hilton at Gatwick Airport
- Acquisition of a further two Holiday Inn Express hotels
- Acquisition and internalisation of third party asset management company
- Completion of the Travelodge Belvedere development
- Eight hotels now owned with 974 bedrooms
CHIEF EXECUTIVE OFFICER OVERVIEW
The Company has remained focused on acquiring good branded UK hotel assets.
During the second quarter, hotel property transaction activity in the UK was very strong. Large portfolios were sold at compressed yields and sellers were demanding
deposits to secure exclusivity as well as proof of ability to perform.
Despite this, IHL managed to secure exclusivity for a portfolio of four excellent London based hotels and approached investors to secure additional capital. Regrettably,
due to, inter alia, the uncertainty in global markets and a sharp drop in the South African Rand exchange rate, there was little appetite for investment and the target
acquisition was unsuccessful. The impact of this resulted in the Company having to absorb some significant abort costs, which are reflected in the trading numbers.
The UK hotel investment market has softened during the Q2 of 2016 as yields return to a more realistic pricing level. The continued uncertainty around the EU
referendum, as well as general caution in the investment markets, has resulted in a market that is somewhat cautious and adopting a 'wait and see' approach. This gave
IHL an opportunity to look to acquire additional strong branded assets at the start of Q3 which were recently announced being:
- Hampton by Hilton London Gatwick Airport - North Terminal
- Holiday Inn Express Redditch
- Holiday Inn Express Southampton M27 Jnt 7
Shortly after the close of Q2, IHL acquired 100% of the shares in its third party asset management company from Redefine|BDL Hotel Group Limited. Resource has
been allocated internally to manage current and future acquisitions and thereby prevent any leakage in earnings that will result in improved margins going forward.
The UK trading market has continued with good occupancies and growth despite a small pull back in the London market and this is anticipated to continue. All assets in
the IHL portfolio continue to perform in line with expectations.
The IHL Board is investigating a move to the main board of the JSE as a consequence of the feedback from the investor community and this will take place once all
regulatory requirements have been satisfied.
The Group's trading hotel, Holiday Inn Express Dunstable, has performed well since it was acquired in August 2015 and is ahead of expectations at the half year. It is
this underlying performance that has given the Board the confidence to pay the first dividend.
Subsequent to the period end we have also completed the development of Travelodge Belvedere on a timely basis bringing the number of third-party leased Travelodges
owned by the Group to four. The Group now owns a total of eight hotels with 974 bedrooms.
The Group is currently in negotiations to utilise the remaining equity in the business for additional earnings enhancing hotel acquisitions which are expected to be
announced in due course.
CHIEF FINANCIAL OFFICER OVERVIEW
During the second quarter the Group continued its growth phase by successfully raising a further £13 million of equity through the issue of 13 million shares at £1 per
share. At the end of February 2016 the Group had raised a total of £48 million and a further equity raise of £7 million took place after the period end.
A non-core asset, being the original unbranded Worcester hotel acquired by the Group, was sold in the period to allow IHL to focus on its core business of owning
branded assets in strong locations. During the period of ownership the Worcester hotel had a positive impact on earnings in the Group.
The Group effected its security over three Travelodge hotels (gained through debt acquired in the first quarter for £23.5 million) to take ownership of the entities owning
those properties during the second quarter which has given rise to the increase in the Investment Property balance in the Consolidated Statement of Financial Position
since the year end.
Completing ownership of the Travelodge hotels enabled the Group to commence with recognising Rental Income in place of Finance Income from the debt that was
originally acquired. To-date £0.3 million of Rental Income has been recognised.
The second quarter saw a continuation of the Group incurring some one-off 'start-up' costs relating to structuring of the Group and some asset management fees prior to
the acquisition of the asset management company after the period end. In addition there were one-off abort costs of around £0.5m for advisor fees on the significant
acquisition that was unsuccessful. Finally there was a £0.4 million foreign exchange loss in the period due to movement in the GBP:ZAR exchange rate during the
capital raises while foreign currency swaps were being put in place. It is expected that these one-off costs have now broadly been incurred and should not continue to a
material extent.
Immediately prior to the period end £15 million was transferred to solicitor client accounts for acquisitions that were imminent after the quarter end and which have since
been successfully completed and announced – this caused the large Trade & Other Receivables balance at the period end.
The Group is anticipated to move into profit shortly as the number of trading hotels in the business increases.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 29 February 2016
Six months ended Period ended
29 Feb 2016 31 Aug 2015
GBP GBP
Continuing operations
Hotel revenue 1,164,868 163,890
Rental income 333,713 -
Finance income 170,349 -
Revenue 1,668,930 163,890
Hotel expenses (1,081,157) -
Other expenses (1,462,887) (484,917)
Other income - 166,124
Net finance expense (214,499) (27,588)
Finance expense (173,311) (88,790)
Fair value (loss)/gain on interest rate cap (41,188) 61,202
Loss before tax from continuing operations (1,089,613) (182,491)
Taxation charge 29,108 (5,901)
Loss after taxation from continuing operations (1,060,505) (188,392)
Disposal group held for sale
Profit after tax for the period from discontinued operations 81,324 -
Loss for the period (979,181) (188,392)
Other Comprehensive Income (OCI)
Other comprehensive income not to be reclassified to profit or loss in subsequent periods:
Revaluation of land and buildings, net of tax 221,311 -
Other comprehensive income/(expense) for the period, net of tax 221,311 -
Total comprehensive loss for the period (757,870) (188,392)
Earnings per share Note
Basic loss per share (pence) 1 (3.78) (7.67)
Diluted loss per share (pence) 1 (3.78) (7.67)
Basic headline loss per share (pence) 1 (3.78) (7.98)
Diluted headline loss per share (pence) 1 (3.78) (7.98)
Earnings per share for continuing operations
Basic loss per share (pence) 1 (4.10) (7.67)
Diluted loss per share (pence) 1 (4.10) (7.67)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
For the six months ended 29 February 2016
As at 29 Feb 2016 As at 31 Aug 2015
ASSETS GBP GBP
Non-current Assets 38,619,921 15,554,613
Property, Plant and Equipment 8,800,814 8,800,000
Intangible assets 975,018 993,411
Investment Property 26,176,287 5,700,000
Non-current financial assets 2,667,802 61,202
Current Assets 18,042,426 1,160,916
Inventories 4,416 6,299
Trade and other receivables 16,721,755 421,986
Cash and cash equivalents 1,316,255 732,631
Assets of a disposal groups held for sale - -
Total Assets 56,662,347 16,715,529
EQUITY AND LIABILITIES
Capital and Reserves 46,554,095 2,376,874
Share capital 48,000 2,650
Share premium 47,521,360 2,562,616
Accumulated loss (1,236,576) (188,392)
Revaluation reserve 221,311 -
Reserves of a disposal group held for sale - -
Non-current Liabilities 5,049,036 7,433,230
Interest-bearing loans and borrowings 4,340,392 6,608,908
Deferred tax liability 708,644 824,322
Current Liabilities 5,059,216 6,905,425
Trade and other payables 1,133,467 1,064,053
Short term portion of interest-bearing loans and borrowings 3,925,027 5,761,356
Corporate tax payable 722 80,016
Liabilities of a disposal group held for sale - -
Total Equity and Liabilities 56,662,347 16,715,529
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 29 February 2016
Retained Earnings / Reserve of disposal
Share Capital Share Premium Accumulated Loss Revaluation Reserve group held for sale Total Equity
GBP GBP GBP GBP GBP GBP
Balance as at 10 February 2015 - - - - - -
Issue of shares - 19 March 2015 1 - - - - 1
Cancellation of shares - 31 March 2015 (1) - - - - (1)
Issue of shares - 31 March 2015 2,650 2,562,616 - - - 2,565,266
Total comprehensive loss for the period - - (188,392) - - (188,392)
Balance as at 31 August 2015 2,650 2,562,616 (188,392) - - 2,376,874
Loss for quarter one - - (215,308) - - (215,308)
Other comprehensive income for the period - - - 110,129 - 110,129
Total comprehensive loss for the period - - (215,308) 110,129 - (105,179)
Issue of shares - 14 October 2015 12,350 12,154,141 - - - 12,166,491
Issue of shares - 20 October 2015 13,875 13,810,102 - - - 13,823,977
Issue of shares - 20 November 2015 6,125 6,069,640 - - - 6,075,765
Transfer of reserves of disposal group - - (96,515) - 96,515 -
Balance as at 30 November 2015 35,000 34,596,499 (500,215) 110,129 96,515 34,337,928
Issue of shares - 23 February 2016 13,000 12,924,861 - - - 12,937,861
Disposal of subsidiary - - 27,512 - (96,515) (69,003)
Other comprehensive income for the period - - - 111,182 - 111,182
Loss for quarter two - - (763,873) - - (763,873)
Balance as at 29 February 2016 48,000 47,521,360 (1,236,576) 221,311 - 46,554,095
CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended 29 February 2016
Six months ended Period ended
29 February 2016 31 Aug 2015
GBP GBP
CASH FLOWS FROM OPERATING ACTIVITIES:
Loss before tax from continuing operations (1,089,613) (182,491)
Adjustments to reconcile profit/(loss) before tax to net cash flows:
Decrease in investment properties - 183,883
Bargain purchase of subsidiaries - (166,124)
Depreciation of Property, Plant and Equipment 277,956 -
Fair value loss on interest rate swap 41,188 -
Net finance expense 167,728 27,457
Finance Income (170,349) -
Working capital adjustments:
(Increase)/Decrease in trade and other receivables and prepayments (16,299,769) 181,740
(Decrease)/Increase in trade and other payables (15,896) 379,410
Decrease in inventories 1,883 -
Interest paid (67,089) (27,457)
Net cash (outflow)/inflow from operating activities (17,153,961) 396,418
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of a subsidiary, net of cash acquired 18,393 361,214
Proceeds from the sale of a disposal group 853,750 -
Reduction/(Acquisition) of debt receivable (2,578,054) -
(Acquisition)/Disposal of Property, Plant & Equipment (814) -
(Increase)/Decrease in interest-bearing borrowings (28,546) -
Acquisition and Development of Investment Property (25,376,287) -
Net cash (outflow)/inflow from investing activities (27,111,558) 361,214
CASH FLOWS FROM FINANCING ACTIVITIES:
(Decrease)/Increase in interest-bearing borrowings (1,898,391) (25,000)
Proceeds from issue of share capital 48,000,000 -
Transaction costs on issue of shares (430,637) -
Net cash flow from disposal group - -
Net cash inflow/(outflow) from financing activities 45,670,972 (25,000)
Net increase in cash and cash equivalents 1,405,453 732,631
Net foreign exchange differences (445,735) -
Balance at the beginning of the period 732,631 -
Cash equivalents of disposal group included in cash balance at beginning of period (376,094) -
Cash equivalents of disposal group at end of period - -
BALANCE AT PERIOD END 1,316,255 732,631
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the six months ended 29 February 2016
1. EARNINGS PER SHARE (EPS)
Basic EPS amounts are calculated by dividing the profit for the period attributable to ordinary equity holders of the parent by the weighted average number of ordinary
shares outstanding during the period. Diluted EPS amounts are calculated by dividing the profit attributable to ordinary equity holders by the weighted average number of
ordinary shares outstanding during the period plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary
shares into ordinary shares.
The following reflects the income and share data used in the basic and diluted EPS computations:
Six months ended Period ended
29 Feb 2016 31 Aug 2015
GBP GBP
(Loss)/Profit attributable to ordinary equity holders of the parent for basic earnings:
Continuing operations (1,060,505) (188,392)
Discontinued operations 81,324 -
Potential dilution - -
Loss attributable to ordinary equity holders adjusted for the effect of dilution (979,181) (188,392)
Number of ordinary shares in issue 48,000,000 2,650,000
Weighted average number of ordinary shares for basic EPS 25,890,522 2,457,273
Effects of dilution - -
Weighted average number of ordinary shares adjusted for the effect of dilution 25,890,522 2,457,273
Subsequent to the period end there have been an additional 8 million shares issued. 1 million shares were issued as payment for the acquisition of RBDL Capital Managers
7 million shares were issued as part of a further capital raise for a total value of GBP7,000,000.
To calculate the EPS for the disposal group held for sale, the weighted average number of ordinary shares for both the basic and diluted EPS is as per the table above. The
following table provides the profit/(loss) amount used:
Profit attributable to ordinary equity holders from the disposal group held for sale for the
basic and diluted EPS calculations 81,324 -
Headline earnings per share
The following table provides the profit/(loss) amount used:
Loss attributable to equity holders of the parent for the basic and diluted EPS calculations (979,181) (188,392)
Plus IAS 40 changes in fair value of Investment Property (net of deferred tax) - 158,498
Net fair value loss on Investment Property - 183,883
Deferred taxation - (25,385)
Less IFRS 3 Bargain gains on purchases of subsidiaries - (166,124)
Headline loss attributable to equity holders of the parent (979,181) (196,018)
Date: 19/05/2016 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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