Wrap Text
Financial statements for the nine months ended 31 May 2016
INTERNATIONAL HOTEL GROUP LTD
(Previously RBDL Investments Ltd)
(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 NINE MONTHS ENDED 31 MAY 2016
IHL, the hotel and leisure focused property investment company, announces its results for the nine months ended 31 May 2016.
Financial Highlights
- First quarter of profit for the Group of £689,752
- First dividend declared and paid to shareholders on 20 June 2016
- Earnings per share for three months ended 31 May 2016 is 1.31 pence
- Adjusted earnings per share for the nine months ended 31 May 2016 is 1.57 pence
Operational Highlights
- Successful acquisition and internalisation of the Company’s external investment manager
- Acquisition of Hampton by Hilton Gatwick Airport
- Acquisition of Holiday Inn Express Southampton
- Acquisition of Holiday Inn Express Redditch
- Opening of Travelodge Belvedere hotel
- Total bedrooms under ownership across the eight hotels at the end of Q3 is 974
Helder Pereira, Chairman of IHL, commented:
“During the quarter, the Company has expanded its portfolio to eight hotels and we are delighted that the additional revenue has resulted in the first
ever quarterly profit for the Group of £689,752.
“Our shareholders have also received their first IHL dividend payment and any further investment in assets during the next quarter will augment a strong finish
to the financial year.”
Results Presentation
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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.
28 July 2016
Quarterly report and Financial Statements for the nine months ended 31 May 2016
EXECUTIVE DIRECTORS' SUMMARY
For the nine months ended 31 May 2016
GROUP HIGHLIGHTS
- Quarter 3 was the first quarter of profit for the Group and was in line with expectations
- Successful acquisition and internalisation of external investment management company
- A further GBP7 million of equity raised
- Acquisition of Hampton by Hilton Gatwick Airport successfully completed
- Acquisition of Holiday Inn Express Southampton and Holiday Inn Express Redditch successfully completed
- Completion and opening of the Travelodge Belvedere hotel
- First dividend declared and paid out post period end in June 2016
- EPS of 1.31p for the quarter
- Adjusted EPS of 1.57p for the nine months ended 31 May 2016
CHIEF EXECUTIVE OFFICER OVERVIEW
With continuing shareholder support during the third quarter, a further three hotels were purchased in early March and early April taking IHL's total portfolio to eight hotels. The
additional revenue from these new assets contributed to the Q3 numbers returning a GBP689,752 profit. The nine months ending 31 May 2016 include previously reported one-off
costs giving a year-to-date loss of GBP289,429. Adjusted earnings for the nine months ending May 2016, excluding significant one-off costs, show a profit of GBP553,242.
All trading hotels performed in line with expectations, with all properties maintaining positive Revenue Per Available Room ('RevPAR') indices against their competitor sets of
between 111% and 121%. RevPAR for the portfolio of four trading hotels was GBP55.12 for the last quarter and 5.7% above the prior year when the hotels were under different
ownership. This has been driven by a strong focus on Average Room Rate under IHL's ownership which was 5.6% higher than the prior year at GBP66.42. Occupancy has also risen
slightly above the prior year by 0.1% to 83.0%.
On 23 June 2016, the UK voted to leave the European Union. This will undoubtedly impact all sectors of the economy and we have already seen a softening in most UK property
yields. The long term impact is still unclear. However, there could be a short term uplift to the hotel trading performance with a weaker pound, though we are not seeing this
impact yet. The UK investment market will also be affected as overseas buyers may hold off investing. Management believe this could present IHL with opportunities to acquire
hotels at a discount to previous pricing. The Group continues to actively seek further investment opportunities in line with its investment strategy.
IHL has agreed the refinancing package for the Hampton by Hilton London Gatwick Airport with Santander, on favourable terms.
CHIEF FINANCIAL OFFICER OVERVIEW
During the third quarter the Group raised further equity of GBP7 million through the issue of 7 million shares at GBP1 per share. By 31 May 2016 the Group had raised a total of GBP55
million.
Hotels owned by the Group continued to perform in line with expectations during the third quarter and other costs within the Group were kept to a minimum.
As anticipated in the half year report, the Group has been profitable for the 3 months to 31 May 2016 with the 'start up' phase and one-off costs now complete. Profit for the
3 months of GBP689,752 has meant the Group is now almost at a breakeven point for the 9 months to 31 May 2016 and showing a total comprehensive profit for the same period. It is
anticipated that by the year end the Group will have continued to grow its profitability further.
The debt funding in place from Santander was originally put in place with a variable portion equal to 3 month LIBOR. In the 3 months to 31 May 2016 the Group entered into fixed
rate swaps at favourable rates in order to fix the majority of this variable debt cost – the remaining variable portion of debt is covered by an interest rate cap. This hedging helps
to
mitigate interest rate risk within the Group.
At 31 May 2016 the Group continued to be under-geared due to unutilised equity being used to reduce the utilisation level of existing debt facilities. Management are considering
further acquisitions which will result in the Group being fully drawn down on its agreed debt facilities.
The large Property, Plant and Equipment balance on the Statement of Financial Position relates to trading hotels owned by the Group. Hotels leased to third party tenants are
classed as Investment Property.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the nine months ended 31 May 2016
Three months ended Nine months ended Period ended
31 May 2016 31 May 2016 31 Aug 2015
GBP GBP GBP
Continuing operations
Hotel revenue 2,907,130 4,071,998 163,890
Rental income 362,874 696,587 -
Finance income 50,028 220,377 -
Revenue 3,320,032 4,988,962 163,890
Hotel expenses (2,048,478) (3,129,635) -
Other expenses (232,172) (1,695,059) (484,917)
Other income - - 166,124
Net finance expense (223,789) (438,288) (27,588)
Finance expense (225,685) (398,996) (88,790)
Fair value (loss) / gain on interest rate cap 1,896 (39,292) 61,202
Profit / (Loss) before tax from continuing operations 815,593 (274,020) (182,491)
Taxation charge (125,841) (96,733) (5,901)
Profit / (Loss) after taxation from continuing operations 689,752 (370,753) (188,392)
Disposal group held for sale
Profit after tax for the period from discontinued operations - 81,324 -
Profit / (Loss) for the period 689,752 (289,429) (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 80,682 301,993 -
Other comprehensive income for the period, net of tax 80,682 301,993 -
Total Comprehensive Profit / (Loss) for the Period 770,434 12,564 (188,392)
Earnings per share Note
Basic earnings / (loss) per share (pence) 1 1.31 (0.82) (7.67)
Diluted earnings / (loss) per share (pence) 1 1.31 (0.82) (7.67)
Basic headline earnings / (loss) per share (pence) 1 1.31 (0.82) (7.98)
Diluted headline earnings / (loss) per share (pence) 1 1.31 (0.82) (7.98)
Earnings per share for continuing operations
Basic earnings / (loss) per share (pence) 1 1.31 (1.05) (7.67)
Diluted earnings / (loss) per share (pence) 1 1.31 (1.05) (7.67)
Adjusted Earnings per share
Basic earnings / (loss) per share (pence) 2 1.31 1.57 (7.67)
Diluted earnings / (loss) per share (pence) 2 1.31 1.57 (7.67)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
For the nine months ended 31 May 2016
As at 31 May 2016 As at 31 Aug 2015
ASSETS GBP GBP
Non-current Assets 88,327,960 15,554,613
Property, Plant and Equipment 55,930,470 8,800,000
Intangible assets 3,670,146 993,411
Investment Property 28,705,433 5,700,000
Non-current financial assets 21,911 61,202
Current Assets 5,932,050 1,160,916
Inventories 25,636 6,299
Trade and other receivables 2,859,922 421,986
Cash and cash equivalents 3,046,492 732,631
Assets of a disposal groups held for sale - -
Total Assets 94,260,010 16,715,529
EQUITY AND LIABILITIES
Capital and Reserves 53,940,643 2,376,874
Share capital 56,000 2,650
Share premium 55,529,474 2,562,616
Accumulated loss (1,946,824) (188,392)
Revaluation reserve 301,993 -
Reserves of a disposal group held for sale - -
Non-current Liabilities 35,446,826 7,433,230
Interest-bearing loans and borrowings 34,729,509 6,608,908
Deferred tax liability 717,317 824,322
Current Liabilities 4,872,541 6,905,425
Trade and other payables 4,328,656 1,064,053
Short term portion of interest-bearing loans and borrowings 454,000 5,761,356
Corporate tax payable 89,885 80,016
Liabilities of a disposal group held for sale - -
Total Equity and Liabilities 94,260,010 16,715,529
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the nine months ended 31 May 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
Issue of shares - 30 March 2016 7,000 6,957,455 - - - 6,964,455
Issue of shares - 28 May 2016 1,000 1,050,659 - - - 1,051,659
Cash Dividends - - (1,400,000) - - (1,400,000)
Other comprehensive income for the period - - - 80,682 - 80,682
Profit for quarter three - - 689,752 - - 689,752
Balance as at 31 May 2016 56,000 55,529,474 (1,946,824) 301,993 - 53,940,643
CONSOLIDATED STATEMENT OF CASH FLOWS
For the nine months ended 31 May 2016
Nine months ended Period ended
31 May 2016 31 Aug 2015
GBP GBP
CASH FLOWS FROM OPERATING ACTIVITIES:
Loss before tax from continuing operations (274,020) (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 401,228 -
Fair value loss on interest rate swap 39,292 -
Net finance expense 398,996 27,457
Finance Income (220,377) -
Working capital adjustments:
(Increase) / Decrease in trade and other receivables and prepayments (2,437,836) 181,740
Increase / (Decrease) in trade and other payables 5,392,709 379,410
(Increase) / Decrease in inventories (19,337) -
Interest paid (284,992) (27,457)
Taxation 193,869 -
Net cash inflow / (outflow) from operating activities 3,189,532 396,418
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of a subsidiary, net of cash acquired (1,335,940) 361,214
Proceeds from the sale of a disposal group 853,750 -
Reduction / (Acquisition) of debt receivable - -
(Acquisition) / Disposal of Property, Plant & Equipment (47,531,698) -
(Increase) / Decrease in interest-bearing borrowings - -
Acquisition and Development of Investment Property (28,955,433) -
Net cash (outflow) / inflow from investing activities (76,969,321) 361,214
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase / (Decrease) in interest bearing borrowings 22,334,628 (25,000)
Proceeds from issue of share capital 55,000,000 -
Transaction costs on issue of shares (414,526) -
Net cash flow from disposal group - -
Net cash inflow / (outflow) from financing activities 76,920,102 (25,000)
Net increase in cash and cash equivalents 3,140,313 732,631
Net foreign exchange differences (450,357) -
Balance at the beginning of the period 732,631 -
Cash equivalents of disposal group included in cash balance at beginning of period (376,095) -
Cash equivalents of disposal group at end of period - -
BALANCE AT PERIOD END 3,046,492 732,631
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the nine months ended 31 May 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:
Three months ended Nine months ended Period ended
31 May 2016 31 May 2016 31 Aug 2015
GBP GBP GBP
Profit / (Loss) attributable to ordinary equity holders of the parent for basic earnings:
Continuing operations 689,752 (370,753) (188,392)
Discontinued operations - 81,324 -
Potential dilution - - -
Profit / (Loss) attributable to ordinary equity holders adjusted for effect of dilution 689,752 (289,429) (188,392)
Number of ordinary shares in issue 56,000,000 56,000,000 2,650,000
Weighted average number of ordinary shares for basic EPS 52,554,348 35,146,795 2,457,273
Effects of dilution - - -
Weighted average number of ordinary shares adjusted for effect of dilution 52,554,348 35,146,795 2,457,273
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:
Profit / (Loss) attributable to equity holders of the parent for the basic and diluted EPS calculations 689,752 (289,429) (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 profit / (loss) attributable to equity holders of the parent 689,752 (289,429) (196,018)
2. ADJUSTED EARNINGS PER SHARE (AEPS)
Adjusted EPS amounts are calculated by dividing the adjusted 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 Adjusted EPS amounts are calculated by dividing the adjusted 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 adjusted basic and adjusted diluted EPS computations:
Three months ended Nine months ended Period ended
31 May 2016 31 May 2016 31 Aug 2015
GBP GBP GBP
Profit / (Loss) attributable to ordinary equity holders of the parent for basic earnings:
Continuing operations 689,752 (370,753) (188,392)
Discontinued operations - 81,324 -
Profit / (Loss) attributable to ordinary equity holders 689,752 (289,429) (188,392)
Add Back: Significant One-off Items - 842,671 -
Foreign exchange loss on equity raises - 445,738 -
Costs of aborted acquisitions - 396,933 -
Potential dilution - - -
Adjusted Profit / (Loss) attributable to ordinary equity holders 689,752 553,242 (188,392)
Date: 28/07/2016 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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