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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Action Hotels | LSE:AHCG | London | Ordinary Share | JE00BFZD1492 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 23.20 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMAHCG
RNS Number : 4943J
Action Hotels PLC
12 September 2016
12 September 2016
This announcement contains inside information
Action Hotels plc
Interim financial statements for the six months ended 30 June 2016
Action Hotels plc, the leading owner, developer and asset manager of branded three and four-star hotels in the Middle East and Australia, is pleased to announce its unaudited results for the six months ended 30 June 2016.
Financial Highlights
-- Total reported revenue increased by 18% to $25.6m (30 June 2015: $21.7m) -- Gross Profit increased by 14% to $18.4m (30 June 2015: $16.1m) -- Adjusted EBITDA(1) increased by 18% to $7.2m (30 June 2015: $6.1m)
-- Property asset values have increased by $31m to $428m since 31 Dec 2015, resulting in a net asset value (NAV) of $189m at 30 June 2016 (31 December 2015: $196 m)
-- NAV is reviewed at year end as we roll out and fair value our portfolio -- Interim dividend of GBP 0.76p, a 3% increase on the same period last year
Operating Highlights
-- Strong occupancy levels at mature hotels being maintained on a like for like basis at 74.7% (30 June 2015: 76.7%)
-- Exceptional operational and financial performances from the two hotels in Kuwait, ibis Salmiya and ibis Sharq, with the latter exceeding 90% occupancy
-- Average hotel breakeven occupancy across the portfolio remains low at c. 35% -- 1,928 operating rooms at the end of June, a 30% increase from H1 2015 (30 June 2015: 1,488)
-- ibis Styles Brisbane, Action's largest hotel, broke even in month 2 and grew to over 51% occupancy by June 2016
-- Acquisition of a prime freehold plot of land located in Innovation Hub, within Dubai's Media City
Alain Debare, Action Hotels CEO said:
"We are very pleased to update the market on a good first half, with a strong performance across the Action Hotels portfolio. We remain focused on driving performance at our operating hotels and our growth reflects the solid performance from our mature hotel portfolio, as well as the early success of our newest hotels. We have a good pipeline of hotels in development and are on track to complete an additional three hotels this year"
Commenting on the results, Sheikh Mubarak A.M. Al Sabah, Founder and Chairman of Action Hotels said:
"It is my pleasure to announce another six months of growth for Action Hotels on the back of a very positive performance in 2015. We continue to meet the increasing demand for quality, internationally branded economy and mid-market hotels and have outperformed expectations set out at IPO with regards to the number of rooms in operating and pipeline hotels by 29%, with rooms totalling 3,184.
We remain committed to growing our portfolio and are continuously exploring new hotel opportunities on both a freehold and leasehold basis. In July we announced our partnership with AccorHotels on our first Novotel branded hotel in Dubai Health Care City, Action's third hotel in the U.A.E and first in Dubai. We look forward to updating the market on other further developments to our pipeline in due course."
For more information, contact:
Hot Features
Premium
Action Hotels PLC Tel: +44 (0) 20
7907 9663
Alain Debare, Chief Executive
Officer
Katie Shelton, Director of
Corporate Affairs
Zeus Capital plc (NOMAD
& Broker)
Dan Bate / Jonathan Sharp Tel: +44 (0) 16
1831 1512
Adam Pollock Tel: +44 (0) 20
3829 5000
Camarco (Media enquiries) Tel: +44 (0) 20
3757 4994
Jennifer Renwick / Tom Huddart
Notes to Editors
Action Hotels PLC
Action Hotels is a leading owner, developer and asset manager of branded three and four star hotels in the Middle East and Australia. Established in 2005, Action Hotels currently has 11 completed hotels with 2,030 rooms in aggregate across the Middle East and Australia, with further properties in development in both regions.
More information is available at http://www.actionhotels.com/
Notes
1. Adjusted EBITDA is defined as operating profit before depreciation, amortisation, restructuring and listing costs, gains and losses arising from the disposal of property, plant and equipment and pre-opening costs.
2. On a like-for-like basis - a comparison of the trading hotels that have been operating for at least 12 months excluding any currency movements.
3. Adjusted NAV is the net asset value of the Group adjusted for the deferred tax provision required on the revaluation of properties to the Statement of Financial Position.
All currency amounts are in US $ unless otherwise stated.
Cautionary Statement
This announcement contains unaudited information and forward-looking statements that are based on current expectations or beliefs, as well as assumptions about future events. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts and undue reliance should not be placed on any such statements because they speak only as at the date of this document and are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results, and Action Hotel's plans and objectives, to differ materially from those expressed or implied in the forward-looking statements. Action Hotels undertakes no obligation to revise or update any forward-looking statement contained within this announcement, regardless of whether those statements are affected as a result of new information, future events or otherwise, save as required by law and regulations.
Operating performance
Six months Six months % change
ended 30 ended 30
June 2016 June 2015
Revenue $25.6m $21.7m +18%
Occupancy (2) 74.7% 76.7% -2.6%
Consolidated revenues were 18% higher over the period, with both Middle East and Australian hotels contributing strong average occupancies.
Occupancy levels were broadly in line with the previous year, with the Kuwaiti hotels, ibis Sharq and ibis Salmiya, the top performers in the Middle East, delivering occupancy rates of 92% and 83% respectively.
The Australian hotels also performed well, with the recently acquired ibis Budget Melbourne Airport delivering occupancy rates above 91%. Action's newest and largest hotel, ibis Styles Brisbane, which became fully operational in March, is showing encouraging early trading figures with occupancy of over 51% at 30(th) June 2016.
Overall, the Group's mature hotels have continued to deliver strong occupancy levels with an average, on a like for like basis, of approximately 75%.
Total operating rooms reached 1,928 as at 30 June 2016, a 30% increase on the same period last year. The opening of Tulip Inn Ras Al-Kaminah and Ibis Styles Brisbane added a further 102 and 367 operating rooms respectively to the portfolio, with ibis Styles Brisbane breaking even in its second month.
In February the Company also announced the purchase of prime location investment land in Innovation Hub (Dubai Media City).
Hotel pipeline
Action Hotels now has 11 operating/completed hotels with 2,030 rooms. The Group's pipeline currently consists of a further seven hotels, with a total of 384 new rooms expected to be completed by the end of 2016 and a total of 3,184 rooms upon completion of the pipeline hotel developments.
Financial Performance
Six months Six months % change
ended 30 ended 30
June 2016 June 2015
Total revenue $25.6m $21.7m +18%
Adjusted EBITDA
(1) $7.2m $6.1m +18%
Adjusted EBITDA
(1) margin 28% 28% +0%
Reported (loss)
/ profit before
tax $(3,853k) $(556k)
Adjusted EBITDA amounted to $7.2m, an 18% increase over the same period last year with adjusted EBITDA margin remaining flat at 28%.
The performance from the Middle East hotels is stable and the growth is predominantly from the new rooms in Australia. The steady central overheads of the Head Office help to support year on year consistency in the EBITDA margin at 28%.
Finance costs have increased as the company has, as planned, utilised debt facilities to fund the pipeline of hotels, some of the funds are also directed to the operation increasing interest payments reported in the financial statements. With the opening of ibis Styles Brisbane and an additional 6 operating months of hotels opened in the latter half of 2015 the Depreciation and Amortisation charge has also increased as expected over last year.
Net Asset Value
Net asset value was $189m at 30 June 2016 (30 June 2015: $196m), NAV will be reviewed at year end as we roll out and fair value our portfolio at the end of the reporting period by certified valuers.
Six months Year ended % change
ended 30 31 December
June 2016 2015
Net asset value $189m $196m -3.6%
Adjusted NAV 3 $199m $206m -3.4%
Adjusted NAV 3 per
share $1.35 $1.40 -3.6%
Interim Dividend
The Group is pleased to announce an interim dividend for the six-month period ended 30 June 2016 of GBP 0.76p per share, which is expected to be paid on 25 November 2016. The Company's ordinary shares are expected to be marked ex-entitlement to such dividend on 14 October 2016 and the dividend will be payable to all shareholders on the Company's share register at the close of business on 13 October 2016.
Payment of the dividend will require shareholders approving a number of administrative matters at a general meeting which will be convened in due course.
Outlook
The Group has had a good start to 2016 and the Board remains optimistic about the future as the group continues to deliver the pipeline.
Review report on the condensed interim consolidated financial information to the board of directors of Action Hotels plc
Introduction
We have reviewed the accompanying condensed consolidated interim statement of financial position of Action Hotels plc and its subsidiaries (the 'Group') as at 30 June 2016 and the related condensed consolidated statements of income, comprehensive income, changes in equity and cash flows for the six-month period then ended and other explanatory notes. Management is responsible for the preparation and presentation of this condensed consolidated interim financial information in accordance with International Accounting Standard 34 "Interim Financial Reporting" as adopted for use in the European Union. Our responsibility is to express a conclusion on this condensed consolidated interim financial information based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity'. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed consolidated interim financial information is not prepared, in all material respects, in accordance with International Accounting Standard 34 "Interim Financial Reporting" as adopted for use in the European Union.
PricewaterhouseCoopers
12 September 2016
Notes
The maintenance and integrity of the Action Hotels plc website is the responsibility of the directors; the work carried out by the independent auditors does not involve consideration of these matters and, accordingly, the independent auditors accept no responsibility for any changes that may have occurred to the consolidated condensed interim financial statements and half-yearly report since they were initially presented on the website.
Condensed interim consolidated income statement
Six month ended 30 June
--------------------------
2016 2015
USD'000 USD'000
(Unaudited) (Unaudited)
Revenue 25,563 21,671
Cost of sales (7,123) (5,573)
------------ ------------
Gross profit 18,440 16,098
General and administrative expenses (16,711) (13,983)
------------ ------------
Operating profit 1,729 2,115
Adjusted EBITDA 7,202 6,111
Depreciation and amortisation (4,669) (3,098)
Pre-opening expenses (804) (898)
Operating profit 1,729 2,115
Finance income 101 293
Finance costs (5,683) (2,964)
------------ ------------
Finance costs - net (5,582) (2,671)
------------ ------------
Loss before income tax (3,853) (556)
Income tax expense (87) (123)
------------ ------------
Loss for the period (3,940) (679)
============ ============
Profit is attributable to:
Owners of Action Hotels plc (3,672) (679)
Non-controlling interests (268) -
Earnings per share attributable to equity holders of the company:
Basic earnings per share (2.7)c (0.5)c
============ ============
Diluted earnings per share (2.7)c (0.5)c
============ ============
All operations were continuing throughout the periods. The accompanying notes on pages 7 to 23 are an integral part of this condensed interim consolidated financial information.
Condensed interim consolidated statement of comprehensive income
Six month ended 30
June
---------------------------
2016 2015
USD'000 USD'000
(Unaudited) (Unaudited)
Loss for the period (3,940) (679)
Other comprehensive income
Items that will not be reclassified
to profit or loss:
Loss on revaluation of land
and buildings (1,228) -
Tax charge relating to revaluation - 194
------------- ------------
(1,228) 194
Items that may be reclassified
to profit or loss:
Exchange differences on
translation of foreign operations 1,062 (3,964)
------------- ------------
Other comprehensive income/(loss)
for the period net of tax (166) (3,770)
------------- ------------
Total comprehensive loss
for the period (4,106) (4,449)
============= ============
Total comprehensive loss
for the period is attributable
to:
Owners of Action Hotels
plc (3,224) (4,449)
Non-controlling interests (882) -
------------- ------------
(4,106) (4,449)
============= ============
Total comprehensive income attributable to equity shareholders arises from continuing operations. The accompanying notes on pages 7 to 23 are an integral part of this condensed interim consolidated financial information.
Condensed interim consolidated balance sheet
30 June 31 December
2016 2015
Note USD'000 USD'000
(Unaudited) (Audited)
Assets
Non-current assets
Intangible assets 15,244 15,343
Investment properties 7 23,886 33,440
Property and equipment 8 388,676 343,367
Cash and bank balances 178 176
Other receivables - 4,812
------------ ------------
427,984 397,138
------------ ------------
Current assets
Cash and bank balances 5,562 9,584
Trade and other receivables 10,292 11,910
Receivables due from related parties 9 6,104 2,361
Inventories 228 172
------------ ------------
22,186 24,027
------------ ------------
Total assets 450,170 421,165
============ ============
Liabilities and Equity
Liabilities
Current liabilities
Trade and other payables 14,188 19,912
Finance lease liabilities 306 -
Payables due to related parties 9 636 529
Borrowings 10 27,860 19,716
------------ ------------
42,990 40,157
------------ ------------
Net current liabilities (20,804) (16,130)
------------ ------------
Non-current liabilities
Borrowings 10 198,445 173,860
Finance lease liabilities 8,649 -
Provision for end of service benefits 865 802
Deferred tax liabilities 10,599 10,457
------------ ------------
218,558 185,119
------------ ------------
Total liabilities 261,548 225,276
------------ ------------
Net assets 188,622 195,889
============ ============
Equity
Share capital 11 24,102 24,102
Share premium 11 124,479 124,479
Revaluation reserve 73,332 73,946
Merger and other reserves 12 (7,656) (10,293)
Accumulated losses (41,303) (32,895)
------------ ------------
Net equity attributable to owners of Action Hotels plc 172,954 179,339
Non-controlling Interests 15,668 16,550
------------ ------------
Total equity 188,622 195,889
============ ============
The accompanying notes on pages 7 to 23 are an integral part of these condensed interim consolidated financial information. The condensed interim consolidated financial information was approved by the Board of Directors and authorised for issue on 12 September 2016. They were signed on its behalf by:
............................................. .............................................
Alain Debare Andrew Lindley
Chief Executive Officer Finance Director
Condensed interim consolidated statement of changes in equity
Attributable to owners of Action Hotels plc
--------------------------------------------------------------
Non-
Share Share Revaluation Other Accumulated controlling Total
capital premium reserve reserves losses Total interests equity
USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 USD'000
At 1 January
2015
(Audited) 24,102 124,479 71,389 (4,492) (29,489) 185,989 - 185,989
Loss for the
period - - - - (679) (679) - (679)
Other
comprehensive
income for
the period - - 194 (3,964) - (3,770) - (3,770)
------- ------- ----------- -------- ----------- -------- --------------------------- -------
Total
comprehensive
income for
the period - - 194 (3,964) (679) (4,449) - (4,449)
Transactions
with owners:
Dividends - - - - (3,302) (3,302) - (3,302)
------- ------- ----------- -------- ----------- -------- --------------------------- -------
At 30 June
2015
(Unaudited) 24,102 124,479 71,583 (8,456) (33,470) 178,238 - 178,238
======= ======= =========== ======== =========== ======== =========================== =======
At 1 January
2016
(Audited) 24,102 124,479 73,946 (10,293) (32,895) 179,339 16,550 195,889
Loss for the
period - - - - (3,672) (3,672) (268) (3,940)
Other
comprehensive
income for
the period - - (614) 1,062 - 448 (614) (166)
------- ------- ----------- -------- ----------- -------- --------------------------- -------
Total
comprehensive
income for
the period - - (614) 1,062 (3,672) (3,224) (882) (4,106)
Transactions
with owners:
Share based
payments - - - 1 - 1 - 1
Transfer to
statutory
reserve - - - 1,574 (1,574) - - -
Dividends
(note 12) - - - - (3,162) (3,162) - (3,162)
------- ------- ----------- -------- ----------- -------- --------------------------- -------
At 30 June
2016
(Unaudited) 24,102 124,479 73,332 (7,656) (41,303) 172,954 15,668 188,622
======= ======= =========== ======== =========== ======== =========================== =======
The accompanying notes on pages 7 to 23 are an integral part of this condensed interim consolidated financial information.
Condensed interim consolidated statement of cash flows
Six months ended
30 June
--------------------------
2016 2015
USD'000 USD'000
(Unaudited) (Unaudited)
Cash flows from operating
activities:
Net loss for the period (3,940) (679)
Adjustments for:
Finance costs 5,683 2,964
Finance income (101) (293)
Tax charge 87 123
Depreciation of property
and equipment 4,415 2,842
Amortisation of intangible
assets 254 256
Provision for end of service
benefits 230 240
Share based payments 56 -
------------ ------------
Operating cash flows before
payment of employees' end
of service benefits and changes
in working capital: 6,684 5,453
Payment of employees end
of service benefits (169) (178)
Decrease/(Increase) in trade
and other receivables 6,475 (4,476)
Increase/(decrease) in receivables
due from related parties (1,794) 1,054
Increase in inventory (56) (61)
Decrease in trade and other
payables (5,807) (354)
Increase in payables due
to related parties 107 1,736
------------ ------------
Cash generated from operation 5,440 3,174
Tax paid (214) -
------------ ------------
Net cash generated from operating
activities 5,226 3,174
------------ ------------
Cash flow from investing
activities
Interest received 101 293
Capital expenditure from
restricted cash 1,139 -
Transfers to restricted cash (758) (621)
Amount paid for acquisition
of subsidiary - 1,134
Purchase of investment property (10,214) -
Purchases of property and
equipment 7 (21,496) (28,701)
------------ ------------
Net cash used in investing
activities (31,228) (27,895)
------------ ------------
Cash flow from financing
activities
Repayment of borrowings (12,035) (18,956)
Drawdown of borrowings 43,166 52,398
Finance costs paid (5,677) (2,940)
Dividend paid (3,161) (3,302)
Net cash generated from financing
activities 22,293 27,200
------------ ------------
Net (decrease)/increase in
cash and cash equivalents (3,709) 2,479
Cash and bank balances at
the beginning of the period 7,844 4,975
Effect of foreign exchange
changes 57 (801)
------------ ------------
Unrestricted Cash and cash
equivalents at end of the
period 4,192 6,653
Restricted cash and cash
equivalents 1,370 1,086
------------ ------------
Total Cash and cash equivalents
at the end of the
period 5,562 7,739
============ ============
1 General information
Action Hotels plc ("the company") is incorporated in Jersey under the Companies (Jersey) Law 1991. The address of the registered office is 1st Floor, 17 Bond Street, St Helier, Jersey, JE2 3NP, Channel Islands. The company is a public limited company and has its primary listing on the AIM division of the London Stock Exchange. The principal activities of the company and its subsidiaries ("the Group") are owning, developing, operating hotels and properties in the Middle East and Australia. The Group's principal administrative subsidiary, Action Hotels Limited, is domiciled in Dubai International Financial Centre, which is its principal place of business.
Action Hotels plc was incorporated in Jersey on 7 May 2013 and took control of the Action Hotels business on 9 December 2013 through a common control transaction with its shareholder. The company issued 100 million shares to its shareholder in return for 100% of the beneficial interest in and voting control over the issued share capital of Action Hotels Limited. Action Hotels Limited in turn acquired 100% of the issued share capital of Action Hotels Company LLC, a company incorporated in Kuwait, through a share for share exchange.
Action Hotels plc was subsequently admitted to trading on the AIM division of the London Stock Exchange and issued a further 47,637,195 shares on 23 December 2013.
Pursuant to the transaction, Action Hotels Company LLC, which had previously been the parent company of the Group became a subsidiary of Action Hotels plc and the existing shareholder of Action Hotels Company LLC became the shareholder in Action Hotels plc.
The half year results and condensed interim consolidated financial information for the six months ended 30 June 2016 ("the interim financial statements") comprise the results for the Group.
These interim financial statements have been reviewed, not audited.
2 Basis of preparation
The interim financial statements have been prepared in accordance with IAS 34 'Interim financial reporting'. The interim financial statements should be read in conjunction with the annual audited financial statements for the year ended 31 December 2015, which have been prepared in accordance with International Financial Reporting Standards ('IFRS') and IFRS Interpretation Committee interpretations as adopted by the European Union and the Companies (Jersey) law 1991.
2.1 Going concern
The Group has reported accumulated losses of USD 41,303,000 (2015 Audited: USD 32,895,000) as at 30 June 2016, and as of that date, the Group's current liabilities exceed its current assets by USD 20,804,000 (2015 Audited: USD 16,130,000). Total assets continue to exceed total liabilities by USD 188,622,000 (2015 Audited: USD 195,889,000).
2 Basis of preparation (continued) 2.1 Going concern (continued)
Notwithstanding this, the financial statements have been prepared on the going concern basis. The Directors have made this assessment after consideration of the Group's expenditure commitments, current financial projections and expected future cash flows, together with the available cash resources and undrawn committed borrowing facilities.
The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period, except for adoption of new and amended standard as set out below:
(a) New and amended standard adopted by the Group
The following new standards, amendments to standards and interpretations are mandatory for the first time for the financial year beginning 1 January 2016, but do not have a material impact to the Group.
-- IFRS 10 and IAS 28 (amendments) "Sale or contribution of assets between an investor and its associate or joint venture" (effective 1 January 2016);
-- IAS 1 (amendments) "Disclosure Initiative" (effective 1 January 2016);
-- IAS 16 and IAS 38 (amendments) "Clarification of acceptable methods of depreciation and amortisation" (effective 1 January 2016); and
-- Annual Improvements to IFRSs 2012-2014 cycle (effective 1 January 2016). (b) Impact of standards issued but not yet applied by the Group
The following new standards, amendments to standards and interpretations have been issued, but are not effective for the financial year beginning 1 January 2016 and have not been early adopted:
-- IFRS 9, 'Financial instruments' (effective 1 January 2018); -- IFRS 15 'Revenue from contracts with customers' (effective 1 January 2018); and -- IFRS 16 'Leases' (effective 1 January 2019). 3 Financial risk management
The Group's activities expose it to a variety of financial risks: market risk (including currency risk and interest rate risk), credit risk and liquidity risk.
The condensed interim financial statements do not include all financial risk management information and disclosures required in the annual financial statements; they should be read in conjunction with the Group's annual audited financial statements as at 31 December 2015. There have been no changes in the risk management department or in any risk management policies since the year end 31 December 2015.
4 Critical judgments and accounting estimates
The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.
In preparing these interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the Group's annual consolidated financial statements for the year ended 31 December 2015.
5 Segment information
The Board of Directors of the Group is the Group's chief operating decision-maker. Management has determined the operating segments based on the information reviewed by the Board of directors for the purposes of allocating resources and assessing performance of the Group.
The Group is organised within two geographical regions, Middle East and Australia excluding central functions. These geographical regions along with hotels under construction and undeveloped land sites comprise the Group's four reportable segments. No operating segments have been aggregated to form these reportable segments.
Central management costs represent the head office and management costs incurred at the Group level, which have not been subsequently allocated to any particular operating segment. Each of the geographical segments derives its revenue from the ownership and management of hotel operations.
The Board of Directors use a measure of adjusted EBITDA to assess performance.
(a) Segmental revenue and results
The following is an analysis of the Group's revenue and results by reportable segments:
Six months ended 30 June 2016 (Unaudited) Middle East Australia Consolidated
USD'000 USD'000 USD'000
Revenue 19,838 5,725 25,563
Adjusted EBITDA - hotel operations 8,222 1,610 9,832
Central management and other costs (8,103)
------------
Operating profit 1,729
Finance income 101
Finance cost (5,683)
------------
Loss before tax (3,853)
============
5 Segments information (continued)
(a) Segmental revenue and results (continued)
Six months ended 30 June 2015 (Unaudited) Middle East Australia Consolidated
USD'000 USD'000 USD'000
Revenue 18,716 2,955 21,671
Adjusted EBITDA - hotel operations 8,105 950 9,055
Central management and other costs (6,940)
------------
Operating profit 2,115
Finance income 293
Finance cost (2,964)
Loss before tax (556)
------------
The revenue of each segment for each period arises wholly from external sales.
Adjusted EBITDA for hotel operations represent the profit earned by each segment without allocation of central administration costs including Directors' salaries, pre-opening costs, investment revenue and finance costs, and tax.
(b) Segmental assets
30 June 31 December
2016 2015
USD'000 USD'000
(Unaudited) (Audited)
Middle East hotel operations 251,671 234,268
Australia hotel operations 113,979 111,289
Hotels under construction 56,198 26,229
Undeveloped land sites 23,886 33,045
Not allocated 4,436 16,334
----------- -----------
450,170 421,165
=========== ===========
For the purposes of monitoring segment performance and allocating resources between segments, the Group's management monitor the tangible, intangible and financial assets attributable to each segment. Assets classed as under "not allocated" category represent the current assets attributable to the central management function of the business and mainly relate to head office cash balances and certain balances with related parties.
5 Segment information (continued) (b) Segmental assets (continued)
Other segmental information
30 June 31 December
2016 2015
USD'000 USD'000
(Unaudited) (Audited)
Additions and contributions to property and equipment
Middle East hotel operations 12,988 9,522
Australia hotel operations 1,349 49,249
Hotels under construction 33,717 19,149
48,054 77,920
=========== ===========
(c) Geographical information - Revenue
The country of domicile for the Group's head office is United Arab Emirates (UAE); the table below shows the revenue from external customers split between those attributed to the country of domicile and all other foreign countries.
30 June 30 June
2016 2015
USD'000 USD'000
(Unaudited) (Unaudited)
UAE 1,264 -
Kuwait 7,254 7,404
Oman 6,814 7,432
Bahrain 2,823 1,957
Jordan 1,683 1,923
Australia 5,725 2,955
----------- -----------
25,563 21,671
=========== ===========
5 Segment information (continued)
(d) Geographical information - Non-current assets
The country of domicile for the Group's head office is United Arab Emirates (UAE); the table below shows the non-current asset split between those attributed to the country of domicile and all foreign countries.
30 June 31 December
2016 2015
USD'000 USD'000
(Unaudited) (Audited)
UAE 72,278 61,047
Kuwait 58,806 58,965
Oman 96,840 93,436
Bahrain 55,651 53,228
Jordan 19,282 19,424
Saudi Arabia 11,768 2,104
Australia 113,359 108,934
427,984 397,138
=================== ===========
6 Earnings per share
(a) Basic earnings per share
Basic earnings per share is calculated by dividing the profit/(loss) attributable to the equity holders of the company by the weighted average number of ordinary shares in issue during the period.
30 June 30 June
2016 2015
(Unaudited) (Unaudited)
Loss for the period (USD'000) (3,940) (679)
----------- -----------
Weighted average number of shares 147,637,195 147,637,195
----------- -----------
Basic earnings per share (USD) (0.027) (0.005)
----------- -----------
6 Earnings per share (continued)
(b) Diluted earnings per share
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares.
30 June 30 June
2016 2015
(Unaudited) (Unaudited)
Loss for the period (USD'000) (3,940) (679)
-------------------- -----------
Weighted average number of shares used for calculating
basic earnings Hotels plc 147,637,195 147,637,195
-------------------- -----------
Basic and diluted earnings per share (cents) (0.027) (0.005)
-------------------- -----------
The 5,179,116 options (2014: 5,179,116 options) are not included in the calculation of diluted earnings per share because they are antidilutive for the period ended 30 June 2016 and 2015. These options could potentially dilute basic earnings per share in future.
The 3,690,930 warrants (2015: 3,690,930 warrants) are not included in the calculation of diluted earnings per share because they are antidilutive for the period ended 30 June 2016 and 2015. These options could potentially dilute basic earnings per share in future.
7 Investment properties
30 June 31 December
2016 2015
USD'000 USD'000
(Unaudited) (Audited)
At 1 January 33,440 13,506
Addition during the period 10,614 17,049
Transfer to property and equipment (20,259) -
Net gain from fair valuation - 3,358
Exchange differences 91 (473)
----------- -----------
23,886 33,440
=========== ===========
Investment properties represent the Group's interest in land held for undetermined use situated in the UAE and Kuwait. Investment properties are carried at fair value. The valuation method adopted to determine the fair value is based on inputs not based on observable data (that is, unobservable inputs - level 3).
8 Property and equipment
Operational Hotels
Fixtures,
fittings & Hotels under
Land Buildings equipment construction Other FF&E Vehicles Total
USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 USD'000
Cost or fair
value:
At 1 January
2016 (Audited) 103,116 195,030 40,143 23,797 3,328 221 365,635
Additions - 13,526 680 33,717 51 131 48,105
Transfers - - 157 (157) - - -
Revaluation - - - (1,228) - - (1,228)
Exchange
differences 932 1,656 388 69 1 1 3,047
------- --------- ------------- -------------- ----------- --------- --------
At 30 June 2016
(Unaudited) 104,048 210,212 41,368 56,198 3,380 353 415,559
======= ========= ============= ============== =========== ========= ========
Accumulated
depreciation:
At 1 January
2016 (Audited) - 7,964 13,267 - 951 86 22,268
Charge for the
period - 2,212 2,116 - 34 53 4,415
Exchange
differences - 74 125 - 1 - 200
------- --------- ------------- -------------- ----------- --------- --------
At 30 June 2016
(Unaudited) - 10,250 15,508 - 986 139 26,883
======= ========= ============= ============== =========== ========= ========
Net book value:
At 30 June 2016
(Unaudited) 104,048 199,962 25,860 56,198 2,394 214 388,676
======= ========= ============= ============== =========== ========= ========
At 31 December
2015 (Audited) 103,116 187,066 26,876 23,797 2,377 135 343,367
======= ========= ============= ============== =========== ========= ========
8 Property and equipment (continued)
Leased assets
Buildings includes the following amounts where the Group is a lessee under a finance lease (note 18):
Leasehold building 30 June 2016
USD'000
(Unaudited)
Cost 9,370
Accumulated depreciation (233)
Net book amount 9,137
=========================
Hotels in operation and under construction are carried at fair value. The valuation method adopted to determine the fair value is based on inputs not based on observable data (that is, unobservable inputs - level 3).
At 30 June 2016, had the land and buildings of the Group been carried at historical cost less accumulated depreciation and impairment losses, their carrying amount would have been USD 284,661,000 (31 December 2015: USD 270,833,000). The revaluation surplus is disclosed in the consolidated statement of changes in equity. The revaluation surplus cannot be distributed due to legal restrictions.
Investment property with a carrying value of USD 20,259,000 relating to Novotel DHCC has been transferred to assets in the course of construction.
The land, buildings and fixtures and fittings of operational hotels and hotels under construction with a carrying amount of USD 346,947,000 (31 December 2015: USD 325,477,000) have been pledged to secure borrowings of the Group (note 10). The Group is not allowed to pledge these assets as security for other borrowings or to sell them to another entity.
During the period, the Group entered into an agreement to design, construct and develop a hotel in Australia. As part of the agreement, the Group received a grant to use the land for nominal consideration.
9 Related party balances and transactions
The Group entered into various transactions with related parties in the normal course of its business concerning financing and other related services. Prices and terms of payment are approved by the Group's management. All significant related party transactions and balances are listed below and are principally with entities under control of the Group's principal shareholder, Action Group Holding Co. KSCC:
30 June 2016 31 December 2015
USD'000 USD'000
(Unaudited) (Audited)
Due from related parties 6,104 2,361
Due to related parties (636) (529)
5,468 1,832
============== ================
Due from related parties
Name of related parties Relationship 30 June
2016 31 December 2015
USD'000 USD'000
(Unaudited) (Audited)
Action Real Estate Co. Dubai Shareholder 1,680 1,695
Action Realty Australia Pty Ltd Others 449 418
Action Business Center Ltd Others 160 158
Sheikh Mubarak Abdullah Al
Mubarak Al Sabah Shareholder 3,732 7
Others Others 83 83
6,104 2,361
=========== ================
Interest is charged on amounts due from related parties in Australia at a rate of 6%. The total interest charge is of USD 23,000 (31 December 2015: USD 206,000).
Due to related parties
Name of related parties Relationship 30 June 2016 31 December 2015
USD'000 USD'000
(Unaudited) (Audited)
Action Group Holding Company
K.S.C.C Shareholder 368 326
Action Real Estate Co. K.S.C.C. Others 189 178
Action Group Holding Company (Oman) Others 79 25
636 529
------------ ----------------
9 Related party balances and transactions (continued)
Due to related parties (continued)
Expenditure incurred on services provided by related parties:
Name of related parties Relationship 30 June 30 June
2016 2015
USD'000 USD'000
(Unaudited) (Unaudited)
Action Group Holding Company
K.S.C.C Shareholder 104 49
Action Real Estate Co. K.S.C.C. Others - 1,514
Action Business Center Others 38 -
----------- -----------
142 1,563
=========== ===========
Expenditure incurred by related parties on behalf of the Group and subsequently recharged:
Name of related parties Relationship 30 June 2016 30 June 2015
USD'000 USD'000
(Unaudited) (Unaudited)
Action Group Holding Company (Oman) Others 48 15
Action Group Holding Company
K.S.C.C Shareholder 18 36
Action Real Estate Co. K.S.C.C. Others 57 125
------------ -------------
123 176
============ =============
Expenditure incurred by the Group on behalf of the related parties and subsequently recharged:
Name of related parties Relationship 30 June
30 June 2016 2015
USD'000 USD'000
(Unaudited) (Unaudited)
Action Group Holding Company (Oman) Others 14 403
Action Real Estate Co. K.S.C.C. Others 48 64
62 467
============ ===========
9 Related party balances and transactions (continued)
Related party guarantees
Further, one of the shareholders of the Group and the ultimate owner of the shareholder have provided performance guarantees on behalf of the Group for certain borrowings. These guarantees, issued in the normal course of business, are outstanding at the end of the period and no outflow of resources embodying economic benefits in relation to these guarantees is expected by the Group.
Transactions and agreements with related parties
Remuneration of Key Management Personnel:
30 June
2016 30 June 2015
USD'000 USD'000
(Unaudited) (Unaudited)
Salaries and consultancy fees 313 287
Share based Payments 56 -
Other benefits 18 11
387 298
=========== ============
During the period, the Group entered into a conditional agreement with Sheikh Mubarak Al Sabah, to purchase his interest in Action Hotels FZ-LLC. An amount of USD 3.7 million paid as refundable advance against this agreement has been included in due from related parties above.
10 Borrowings
30 June 31 December
2016 2015
USD'000 USD'000
(Unaudited) (Audited)
Secured
Borrowings 226,305 193,576
Less: non-current bank loans (198,445) (173,860)
Current borrowings 27,860 19,716
=========== ===========
10 Borrowings (continued)
The table below analyses the bank loans into relevant maturity groupings based on the remaining period at the statement of financial position date to the contractual maturity date.
30 June 31 December 2015
2016
USD'000 USD'000
(Unaudited) (Audited)
Due:
6 months or less 22,369 13,856
6 - 12 months 5,491 5,859
1 - 2 years 25,558 32,861
2 - 5 years 97,855 99,091
More than 5 years 75,032 41,909
----------- ----------------
226,305 193,576
=========== ================
The annual interest rate on loans is as following:
30 June 31 December 2015
2016
USD'000 USD'000
(Unaudited) (Audited)
Kuwaiti Dinar with an annual interest rate 3.73% 3.50%
----------- ----------------
Bahraini Dinar with an annual interest rate 4.49% 5.00%
----------- ----------------
Omani Riyal with an annual interest rate 4.66% 4.00%
----------- ----------------
United States Dollar with an annual interest rate 7.81% 7.04%
----------- ----------------
Australian Dollar with an annual interest rate 4.22% 4.73%
----------- ----------------
Bank facilities are secured by Hotel Properties, Group's corporate guarantees and letter of undertakings.
The short term bank borrowings in local currency is as follows:
Local 30 June 31 December 2015 30 June 2016 31 December 2015
2016
Currency Currency '000 In USD '000
US Dollar (USD) 8,857 10,806 18,305 10,806
Bahraini Dinar (BHD) 1,000 1,000 1,330 2,653
Kuwait Dinar (KWD) 250 250 1,824 824
Australian Dollar (AUD) 1,700 1,700 949 1,241
Omani Rial (OMR) 1,614 1,614 5,452 4,192
------------ ----------------
27,860 19,716
============ ================
10 Borrowings (continued)
The long term bank borrowings in local currency is as follows:
30 June 30 June 2016
Local 2016 31 December 2015 31 December 2015
Currency Currency '000 In USD '000
US Dollar (USD) 46,234 18,486 21,822 18,486
Bahraini Dinar (BHD) 9,150 9,150 32,580 24,277
Kuwait Dinar (KWD) 8,750 8,750 28,027 28,830
Australian Dollar (AUD) 71,816 71,816 62,688 52,417
Omani Rial (OMR) 19,192 19,192 53,328 49,850
------------ ----------------
198,445 173,860
============ ================
At 30 June 2016, the Group has banking facilities of USD 229,509,000 (31 December 2015: USD 223,161,000) with commercial banks. The facilities include short-term and long term loans. Unamortised arrangement fees and other transaction costs amount to USD 1,167,000 (31 December 2015: USD 1,488,000).
11 Share capital and share premium
Number of USD'000
Share capital shares
At 30 June 2015 (Unaudited) 147,637,195 24,102
----------- -------
At 31 December 2015 (Audited)
At 31 December 2015 147,637,195 24,102
----------- -------
At 30 June 2016 (Unaudited) 147,637,195 24,102
----------- -------
USD'000
Share premium
At 30 June 2015 (Unaudited) 124,479
-------
At 31 December 2015 (Audited)
At 31 December 2015 124,479
-------
At 30 June 2016 (Unaudited) 124,479
-------
The authorised share capital of the company is GBP 40 million divided into 400 million shares of 10 pence each. They entitle holders to participate in dividends and to share proceeds of winding up of the company in proportion to the number and of amounts paid on the shares held.
12 Other reserves
Foreign
currency Share-based
Statutory Voluntary translation payment
reserve reserve reserve reserve Merger reserve Total
USD'000 USD'000 USD'000 USD'000 USD'000 USD'000
At 1 January
2015
(Audited) 2,960 2,802 (5,201) 596 (5,649) (4,492)
Transfers to
reserves 6 - - - - 6
Share based
payments - - - 4 - 4
Total
comprehensive
income for
the year - - (5,811) - - (5,811)
--------- --------- ----------- ----------- --------------------------------- ---------
At 31 December
2015
(Audited) 2,966 2,802 (11,012) 600 (5,649) (10,293)
========= ========= =========== =========== ================================= =========
At 1 January
2016
(Audited) 2,966 2,802 (11,012) 600 (5,649) (10,293)
Transfer to
reserves 1,541 33 - - - 1,574
Share based
payments - - - 1 - 1
Total
comprehensive
income for
the period - - 1,062 - - 1,062
--------- --------- ----------- ----------- --------------------------------- ---------
At 30 June
2016
(Unaudited) 4,507 2,835 (9,950) 601 (5,649) (7,656)
========= ========= =========== =========== ================================= =========
13 Dividends
The company declared final dividend amounting to USD 3.1 million (GBP 1.47p per share) in respect of year ended 31 December 2015 and was approved by the shareholders at their meeting on 18 May 2016. This dividend was paid during the period ended 30 June 2016.
An interim dividend of USD 1.4 million (GBP 0.76p per share) has been proposed by the board of directors and is expected to be paid subject to approval of the dividend by the shareholders. This interim dividend, amounting to USD 1.4 million, has not been recognised as a liability in these interim financial statements.
14 Fair value measurements of non-current assets
The change in fair value measurements of investment properties and hotels in operation for the six months ended 30 June 2016 is considered by the management to be immaterial.
The Directors' believe that these valuations, on the basis of current use, represent the highest and best use of the respective assets. The valuation technique has remained unchanged from 31 December 2015 and the Directors of the Group review the valuation process undertaken yearly and consider whether it remains appropriate.
14 Fair value measurements of non-current assets (continued)
The Group uses the following hierarchy for determining the fair value of assets and liabilities held at fair value by valuation technique:
-- Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities;
-- Level 2: other techniques for which all inputs which have significant effect on the recorded fair value are observable, either directly or indirectly; and
-- Level 3: techniques which use inputs which have significant effect on the recorded fair value that are not based on observable market data.
The fair value measurements of property and equipment and investment properties are classified as Level 3 in the fair value hierarchy in their entirety, due to the fact that significant unobservable inputs are used in arriving at an appropriate fair value.
The fair value measurement is sensitive to changes in unobservable inputs. The discount and yield rates used to establish a net present value for each separately valued property are as follows and if changed, could result in a materially different fair value.
At 30 June 2016 At 30 June 2015
(Unaudited) (Unaudited)
Discount rate: owned asset 10% - 12% 11% - 11.5%
--------------- ---------------
Exit yield 8% - 9% 8% - 8.75%
--------------- ---------------
The future forecast results represent an unobservable input for each property. Each separate property valuation is directly dependent on the forecast results and hence a significant/ sustained decrease in expected future results would result in a similar proportional reduction in the fair value measurement related to the property.
15 Commitments
At 30 June 2016, the Group had entered into contractual commitments on construction costs of hotels under construction amounting to USD 142,266,000 (31 December 2015: USD 37,859,000).
16 Operating lease arrangements
The Group leases land, building and office space under various operating lease agreements. The remaining lease terms of the majority of the leases are between one to twenty years and are renewable at mutually agreed terms.
30 June 30 June
2016 2015
USD'000 USD'000
(Unaudited) (Unaudited)
Lease payments under operating leases recognised as an expense in the period 1,376 1,306
----------- -----------
At the balance sheet date, the future minimum lease payments payable under operating leases are as follows:
30 June 31 December
2016 2015
USD'000 USD'000
(Unaudited) (Audited)
Within one year 3,018 2,677
Between two and five years inclusive 5,685 5,119
After 5 years 7,685 42
----------- -----------
16,388 7,839
=========== ===========
17 Seasonality of operations
Due to the seasonal nature of the hospitality business, higher revenues and operating profits are usually expected in the second half of the year than the first six months.
18 Finance lease liabilities
Effective 1 January 2016, the Group has leased a building with a carrying amount of USD 9.1 million under finance lease for an initial term of twenty years with an option to renew for a similar period.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR FFLLFQKFFBBF
(END) Dow Jones Newswires
September 12, 2016 02:01 ET (06:01 GMT)
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