We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register for real-time alerts, custom portfolio, and market movers
| 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 : 0940R
Action Hotels PLC
19 September 2017
Action Hotels plc
Interim financial statements for the six months ended 30 June 2017
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 2017.
Key Highlights and Financial Overview
Year-on-year growth in key financial performance indicators - Revenue (up 10%) and Gross profit (up 6%)
Total reported revenue increased to $28.1m (30 June 2016: $25.6m), driven by new hotel rooms
Gross profit increased to $19.5m (30 June 2016: $18.4m)
Adjusted EBITDA(1) decreased by 6.3% to $6.8m (30 June 2016: $7.2m), mainly due to the full year effect of non-operating expenses in the newly opened hotels as they grow through the maturity stage
Net loss before tax of $5.3m (30 June 2016: Net loss of $3.9m), as expected and primarily driven by the impact of increased financing costs to develop the pipeline and the impact of depreciation newly opened hotels
LTV of 55% (2016: 51%)
Property asset values have increased by $35m to $493m since 31 Dec 2016, resulting in a net asset value (NAV) of $192m at 30 June 2017 (31 December 2016: $195 m)
Adjusted NAV (adding back deferred tax liability and assets) is $201m compared to $206m as at year end.
Adjusted NAV per share was USD 1.36/GBP 1.06 (2016: USD 1.40/GBP 1.09)
Interim dividend of GBP 0.77p, a 1.3% increase on the same period last year
Operational Highlights
2,181 operating rooms at the end of June, a 13% increase from H1 2016 (30 June 2016: 1,928) with the openings of Tulip Inn, Ras Al Khaimah (September 2016) and Mercure Sohar (December 2016)
Strong occupancy levels from our mature hotels(2) , being maintained on a like-for-like basis at 72.7% (30 June 2016: 74.7%)
Average EBITDA breakeven occupancy levels across the portfolio remain low at c. 37% (30 June 2016: 35%)
Continued strong operational and financial performances from the two hotels in Kuwait, ibis Salmiya and ibis Sharq, with both hotels operating over 80% occupancy
Ibis Budget Melbourne Airport also continues to perform strongly with at 90% occupancy (30 June 2016: 91%)
On 2 August 2017 Action's thirteenth hotel, ibis Styles Diplomatic Area, Manama Bahrain with 95 rooms opened, taking the total of operational rooms to 2,276.
Current Trading and Portfolio update
The Board confirms that, current trading remains on track with market expectations, despite certain markets in the Middle East facing headwinds impacting the performance of businesses throughout the region. Growth comes from the newly opened rooms and the occupancy of the Groups seven mature hotels(2) at 72.7% underpins Action's resilient business model in the economy and midmarket hotel sector, with low break-even levels and the recently opened hotels delivering growth.
After a thorough review of the pipeline, and to efficiently manage the Company's cash and debt position, the board have decided to slightly delay the openings of two of its leasehold hotels in Saudi Arabia, Tulip Inn Modon Jeddah and Mercure Riyadh Olaya. These hotels, which are currently under development, were due to be substantially completed by the end of 2017 but will now be opened towards the end of H1 2018. This minimally impacts the 2017 forecast which is expected to improve the net loss position slightly with the concurrent delay of two hotel pre-opening costs in the region of $0.5-1.0m.
The Board has also taken the decision to remove the 112-key leasehold hotel, Staybridge Suites Abu Dhabi from the pipeline, choosing instead to focus Management's resources on projects offering a better return on capital employed, such as Novotel Melbourne South Wharf, due to open in H1 2018.
Alain Debare, Action Hotels CEO said:
"We are pleased to update the market on a solid first half, with a good performance across the Action Hotels portfolio. We are seeing good growth from the new rooms, with trading impacted by some headwinds in the Middle East whilst Australia continues to perform strongly. We remain focused on delivering the pipeline and working with our Hotel partners to drive performance at our operating hotels with a special focus on ensuring the early success of our recently opened hotels as they grow within their markets and consolidating the solid performance from our mature hotel portfolio. "
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 2016. 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 operating and in pipeline with rooms totaling 3,090.
We remain committed to growing our portfolio and are continuously exploring new hotel opportunities on both a freehold and leasehold basis. In May, we announced our partnership with AccorHotels on our second Novotel branded hotel in Melbourne South Wharf, Action's fourth hotel in Australia and being developed on the largest convention center in the Southern hemisphere. 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) 7799770588
Alain Debare, Chief Executive
Officer
Katie Shelton, Director of Corporate
Affairs
Zeus Capital Limited (Nomad
and Joint Broker)
Dan Bate / Andrew Jones Tel: +44 (0) 161
831 1512
Victoria Ayton Tel: +44 (0) 20
3829 5000
Beaufort Securities Limited Tel: +44 (0) 020
(Joint Broker) 7382 8300
Tim Chandler
Gavin Burnell
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 13 completed hotels with 2,276 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 mature trading hotels; ibis Glen Waverly, ibis Budget Melbourne Airport, ibis Sharq, ibis Salmiya, ibis Amman, Holiday Inn Muscat and ibis Muscat, 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 ended
30 June 30 June
2017 2016
Revenue $28.1m $25.6m +10%
Total Occupancy 64.0% 65.6% -1.6%
Occupancy(2) 72.7% 74.7% -2.0%
Total Portfolio
Consolidated revenues were 10% higher over the period, with contribution from new rooms and Middle East and Australian hotels continuing to contribute strong average occupancies. Total occupancy is lower than the mature (like for like) occupancy by 8.7% (30 June 2016: 9.1%) due to the weighting of lower occupancies in the newly opened hotels as they grow to maturity in their respective markets.
Total operating rooms reached 2,181 as at 30 June 2017, a 13% increase on the same period last year. The opening of ibis Styles Bahrain on the 2(nd) August 2017 added a further 95 rooms taking the current operating and completed hotel portfolio to 2,276 rooms.
Despite pressure across the Middle Eastern markets, the Group's seven mature hotels(2) continue to deliver strong occupancy levels at a combined 72.7%, (30 June 2016: 74.7%) broadly in line with previous years illustrating the resilient business model.
Middle East
In the Middle East, hotels showed a drop-in occupancy of 4.9% and in ADR of 8.1% (on a like for like basis, excludes hotels opened in the last 12 months) due to the headwinds across the Middle East particularly impacting markets in Jordan, Oman and Bahrain. Kuwait, however, remained strong with an average occupancy of 81.1% across the two hotels. Management is working closely with its hotel operators to ensure that hotels continue to grow their market share and maintain a low-cost base resulting in low breakeven levels.
Australia
The Australian hotels performed well, performing above last year and delivering an increase of 43% in revenue, driven predominantly from the opening of our largest hotel, Ibis Styles Brisbane, which completed one year of operations in March 2017 and continues to show encouraging trading with occupancy at 64.5%. Ibis Budget Melbourne Airport recorded the highest occupancy in the portfolio with year to date occupancy of 89.3%.
Hotel pipeline
Action Hotels now has 13 operating/completed hotels with 2,276 rooms. The Group's pipeline currently consists of a further four hotels, and a total of 3,090 rooms upon completion of the pipeline hotel developments.
Financial Performance
Six months Six months % change
ended ended
30 June 30 June
2017 2016
Total revenue $28.1m $25.6m +9.9%
Gross Profit $19.5m $18.4m +5.9%
Adjusted EBITDA $6.8m $7.2m -6.3%
(1)
Adjusted EBITDA
(1) margin 24% 28% -4.0%
Reported (loss)
/ profit before
tax $(5,307k) $(3,853k)
Adjusted EBITDA amounted to $6.8m, a 6.3% decrease over the same period last year with adjusted EBITDA margin reducing slightly to 24%, mainly due to the full year effect of non-operating expenses of the newly opened hotels as they progress through the maturity cycle.
The operating performance is stable with the growth coming predominantly from the new rooms in Australia and the UAE. The steady central overheads of the Head Office helped to support EBITDA margin at 24%.
Gross Finance costs have increased by $1.18m over the same period versus last year 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 three hotels in 2016 the Depreciation and Amortisation charge has also increased by $0.6m as expected over last year with the full year effect coming through as the hotels mature. However, the company has been able to reduce pre-opening costs compared to the same period last year (a reduction of $0.7m), with one hotel opening in August 2017.
Net Asset Value
Net asset value reduced by $3m to $192m at 30 June 2017 (2016: $195m), mainly due to the operating loss. 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 JLL and CBRE.
Six months Year ended % change
ended 31 December
30 June 2016
2017
Net asset value $192m $195m -1.5%
Adjusted NAV (3) $201m $206m -2.5%
Adjusted NAV (3) per
share $1.36 $1.40 -2.5%
Interim Dividend
The Group is pleased to announce an interim dividend for the six-month period ended 30 June 2017 of GBP 0.77p per share, which is expected to be paid on 1 December 2017. The Company's ordinary shares are expected to be marked entitlement to such dividend on 19 October 2017 and the dividend will be payable to all shareholders on the Company's share register at the close of business on 20 October 2017.
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 2017 and the Board remains optimistic about the future as growth in the Middle East is forecast to recover to a 3.1% pace this year (World Bank: Global Economic Prospects 2017: Middle East and North Africa).
The Group has demonstrated execution capabilities that will continue to be applied to the pipeline.
Review report on the condensed interim consolidated financial information to the shareholders of Action Hotels plc
Introduction
We have reviewed the accompanying condensed interim consolidated statement of financial position of Action Hotels plc and its subsidiaries (together "the Group") as at 30 June 2017 and the related condensed interim 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 interim consolidated 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 interim consolidated 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 interim consolidated 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
19 September 2017
Note:
The maintenance and integrity of Action Hotels plc's 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 condensed interim consolidated financial statements and half-yearly report since they were initially presented on the website.
Condensed interim consolidated income statement
Six month ended 30 June
--------------------------
2017 2016
USD'000 USD'000
(Unaudited) (Unaudited)
Revenue 28,079 25,563
Cost of sales (8,619) (7,123)
------------ ------------
Gross profit 19,460 18,440
General and administrative expenses (18,014) (16,711)
------------ ------------
Operating profit 1,446 1,729
Adjusted EBITDA 6,751 7,202
Depreciation and amortisation (5,230) (4,669)
Pre-opening expenses (95) (804)
Other expenses - net 20 -
Operating profit 1,446 1,729
--------------------------------------------------------------- ------------ ------------
Finance income 117 101
Finance costs (6,870) (5,683)
------------ ------------
Finance costs - net (6,753) (5,582)
------------ ------------
Loss before tax (5,307) (3,853)
Income tax (273) (87)
Deferred tax 2,296 -
------------ ------------
Loss for the period (3,284) (3,940)
============ ============
Profit is attributable to:
Owners of Action Hotels plc (3,118) (3,672)
Non-controlling interests (166) (268)
Loss per share attributable to equity holders of the Company:
Basic (2.1)c (2.7)c
============ ============
Diluted (2.1)c (2.7)c
============ ============
All operations were continuing throughout the periods. The accompanying notes on pages 7 to 24 are an integral part of this condensed interim consolidated financial information.
Condensed interim consolidated statement of comprehensive income
Six month ended 30
June
---------------------------
2017 2016
USD'000 USD'000
(Unaudited) (Unaudited)
Loss for the period (3,284) (3,940)
Other comprehensive income
Items that will not be reclassified
to profit or loss:
Loss on revaluation of land
and buildings - (1,228)
- (1,228)
Items that may be reclassified
to profit or loss:
Exchange differences on
translation of foreign operations 3,208 1,062
------------ -------------
Other comprehensive income/(loss)
for the period net of tax 3,208 (166)
------------ -------------
Total comprehensive loss
for the period (76) (4,106)
============ =============
Total comprehensive loss
for the period is attributable
to:
Owners of Action Hotels
plc 90 (3,224)
Non-controlling interests (166) (882)
------------ -------------
(76) (4,106)
============ =============
Total comprehensive income attributable to equity shareholders arises from continuing operations. The accompanying notes on pages 7 to 24 are an integral part of this condensed interim consolidated financial information.
Condensed interim consolidated statement of financial position
30 June 31 December
2017 2016
Note USD'000 USD'000
(Unaudited) (Audited)
Assets
Non-current assets
Property and equipment 8 459,936 427,561
Investment property 7 14,725 14,725
Intangible assets 15,502 15,382
Deferred tax assets 3,105 809
Cash and bank balances - 175
------------------------ ------------
493,268 458,652
------------------------ ------------
Current assets
Inventories 269 247
Trade and other receivables 11,949 8,182
Receivables due from related parties 9 8,808 8,720
Cash and bank balances 4,238 4,351
------------------------ ------------
25,264 21,500
------------------------ ------------
Total assets 518,532 480,152
======================== ============
Liabilities
Current liabilities
Trade and other payables 26,281 24,167
Due to related parties 6,443 4,344
Borrowings 10 116,727 75,939
Loan due to related parties 9 - 4,287
Derivative financial instruments 44 -
Finance lease liabilities 531 544
150,026 109,281
------------------------ ------------
Net current liabilities (124,762) (87,781)
------------------------ ------------
Non-current liabilities
Borrowings 10 136,488 152,491
Loan due to related parties 9 15,964 -
Deferred tax liabilities 12,277 12,278
Provision for employees end of service benefits 1,004 999
Other payables 2,380 1,703
Finance lease liabilities 8,541 8,612
------------------------ ------------
176,654 176,083
------------------------ ------------
Total liabilities 326,680 285,364
------------------------ ------------
Net assets 191,852 194,788
======================== ============
Equity
Share capital 11 24,102 24,102
Share premium 11 24,479 24,479
Revaluation reserve 84,123 84,123
Merger and other reserves 12 (6,205) (9,417)
Retained earnings 49,879 55,861
------------------------ ------------
Net equity attributable to owners of Action Hotels plc 176,378 179,148
Non-controlling Interests 15,474 15,640
------------------------ ------------
Total equity 191,852 194,788
======================== ============
The accompanying notes on pages 7 to 24 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 19 September 2017. 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
------------------------------------------------------------------
Accumulated
losses / Non-
Share Share Revaluation Other retained Controlling Total
capital premium reserve reserves earnings Total Interests equity
USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 USD'000
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:
Dividends - - - - (3,162) (3,162) - (3,162)
Share based
payments - - - 1 - 1 - 1
Transfer to
statutory
reserve - - - 1,574 (1,574) - - -
------- ------- ----------- -------- ----------- ------------ ------------ -------
At 30 June
2016
(Unaudited) 24,102 124,479 73,332 (7,656) (41,303) 172,954 15,668 188,622
======= ======= =========== ======== =========== ============ ============ =======
At 1 January
2017
(Audited) 24,102 24,479 84,123 (9,417) 55,861 179,148 15,640 194,788
Loss for the
period - - - - (3,118) (3,118) (166) (3,284)
Other
comprehensive
income for
the period - - - 3,208 - 3,208 - 3,208
------- ------- ----------- -------- ----------- ------------ ------------ -------
Total
comprehensive
income for
the period - - - 3,208 (3,118) 90 (166) (76)
Transactions
with owners:
Share based
payments - - - 4 - 4 - 4
Dividends
(note 13) - - - - (2,864) (2,864) - (2,864)
------- ------- ----------- -------- ----------- ------------ ------------ -------
At 30 June
2017
(Unaudited) 24,102 24,479 84,123 (6,205) 49,879 176,378 15,474 191,852
======= ======= =========== ======== =========== ============ ============ =======
The accompanying notes on pages 7 to 24 are an integral part of this condensed interim consolidated financial information.
Condensed interim consolidated statement of cash flows
Six months ended
30 June
------------------------------------
2017 2016
USD'000 USD'000
(Unaudited) (Unaudited)
Cash flows from operating activities:
Loss before tax (5,307) (3,853)
Adjustments for:
Finance costs 6,751 5,683
Finance income (117) (101)
Depreciation of property and
equipment 4,907 4,415
Amortisation of intangible assets 323 254
Provision for end of service
benefits 373 230
Share based payments 4 56
---------------------- ------------
Operating cash flows before
payment of employees' end of
service benefits and changes
in working capital: 6,934 6,684
Payment of employees end of
service benefits (375) (169)
(Increase)/decrease in trade
and other receivables (7,260) 6,475
Decrease/(increase) in receivables
due from related parties 3,656 (1,794)
Increase in inventories (20) (56)
Increase/(decrease) in trade
and other payables 1,883 (5,807)
Increase in due to related parties 1,496 107
---------------------- ------------
Cash generated from operation 6,314 5,440
Tax paid - (214)
---------------------- ------------
Net cash generated from operating
activities 6,314 5,226
---------------------- ------------
Cash flow from investing activities
Interest received 117 101
Capital expenditure from restricted
cash 842 1,139
Transfers to restricted cash (821) (758)
Purchase of investment property - (10,214)
Purchase of intangible assets (63) -
Purchase of property and equipment (27,986) (21,496)
---------------------- ------------
Net cash used in investing activities (27,911) (31,228)
---------------------- ------------
Cash flow from financing activities
Repayment of borrowings (41,182) (12,035)
Drawdown of borrowings 60,891 43,166
Drawdown of loan from related
parties 11,254 -
Finance costs paid (6,979) (5,677)
Dividend paid (2,864) (3,161)
Net cash generated from financing
activities 21,120 22,293
---------------------- ------------
Net decrease in cash and cash
equivalents (477) (3,709)
Cash and bank balances at the
beginning of the period 3,595 7,844
Effect of foreign exchange changes 188 57
---------------------- ------------
Unrestricted Cash and cash equivalents
at end of the period 3,306 4,192
Restricted cash and cash equivalents 751 1,370
---------------------- ------------
Total Cash and cash equivalents
at the end of the period 4,057 5,562
---------------------- ------------
Cash and cash equivalents 4,057 5,562
Deposits having original maturity
of more than three months 181 -
---------------------- ------------
Cash and bank balances 4,238 5,562
====================== ============
The notes on pages 7 to 24 are an integral part of this condensed interim consolidated financial information
1 General information
Action Hotels plc ("the Company") is incorporated in Jersey under the Companies (Jersey) Law 1991 with the registered number 112945. The address of the registered office is 5(th) Floor, 37 Esplanade, St Helier Jersey, JE 12TR.
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 and managing hotel assets 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 2017 (the "interim financial statements") comprise the results of 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' as adopted by the European Union. The interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 December 2016, which have been prepared in accordance with International Financial Reporting Standards ('IFRS') as adopted by the European Union and IFRS Interpretation Committee interpretations as adopted by the European Union and the Companies (Jersey) law 1991.
The interim financial statements have been prepared on the going concern basis. The Directors have made this assessment for a period of at least twelve months from the date of the approval of these interim financial statements 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.
2 Basis of preparation (continued)
The Group prepares detailed forward cash flow projections for future periods. There are number of assumptions and estimates involved in calculating these future projections, including Management's expectations of increase in gross sales from maturing hotels and hotels still due to open from the pipeline; growth in EBITDA; timing and quantum of future capital expenditure; the estimation of future funding and the cost of such funding. In arriving at their going concern assessment, the Directors have also taken account of agreed term-sheets for additional bank borrowings totalling USD 20,000,000.
Management is also in the process of refinancing existing and negotiating further new funding facilities, in addition to the term-sheets noted above. The principal shareholder and a shareholder have also confirmed their intention to provide continued financial support to the Group so as to enable the Group both to meet its liabilities as and when they fall due and to carry on its business without significant curtailment of operations for a period of at least twelve months from the date of the approval of these interim financial statements.
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 period beginning 1 January 2017, but do not have a material impact to the Group.
-- Recognition of deferred tax assets for unrealised losses - amendments to IAS 12 (effective 1 January 2017);
-- Disclosure initiative - amendments to IAS 7 (effective 1 January 2017); and
-- Annual Improvements to IFRSs 2014-2016 cycle: amendments to IFRS 12 (effective 1 January 2017).
(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 period beginning 1 January 2017 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).
Management is currently assessing the above standards and amendments which are likely to have an impact on the Group's interim financial statements.
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 financial statements as at 31 December 2016. There have been no changes in the risk management department or in any risk management policies since the year end.
4 Critical judgements 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 2016.
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 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 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.
5 Segments information (continued) (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 2017 (Unaudited) Middle East Australia Consolidated
USD'000 USD'000 USD'000
Revenue 19,881 8,198 28,079
------------
Adjusted EBITDA - hotel operations 7,896 3,313 11,209
Central management and other costs (9,763)
------------
Operating profit 1,446
Finance income 117
Finance costs (6,870)
------------
Loss before tax (5,307)
============
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 costs (5,683)
Loss before tax (3,853)
------------
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
2017 2016
USD'000 USD'000
(Unaudited) (Audited)
Middle East hotel operations 280,082 287,585
Australia hotel operations 116,778 110,636
Hotels under construction 94,546 57,585
Undeveloped land sites 14,725 14,725
Not allocated 12,401 9,621
----------- -----------
518,532 480,152
=========== ===========
5 Segment information (continued)
(b) Segmental assets (continued)
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 not allocated 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.
Other segmental information
30 June 31 December
2017 2016
USD'000 USD'000
(Unaudited) (Audited)
Additions and contributions to property and equipment
Middle East hotel operations 544 23,980
Australia hotel operations 75 1,443
Hotels under construction 27,367 58,699
27,986 84,122
=========== ===========
(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
2017 2016
USD'000 USD'000
(Unaudited) (Unaudited)
UAE 2,246 1,264
Kuwait 6,828 7,254
Oman 7,242 6,814
Bahrain 2,363 2,823
Jordan 1,202 1,683
Australia 8,198 5,725
----------- -----------
28,079 25,563
=========== ===========
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
2017 2016
USD'000 USD'000
(Unaudited) (Audited)
UAE 80,200 79,291
KSA 17,167 16,512
Kuwait 49,479 49,553
Oman 111,945 113,141
Bahrain 56,720 55,406
Jordan 19,600 19,635
Australia 158,157 125,114
493,268 458,652
=========== ===========
6 Loss per share
(a) Basic loss per share
Basic loss 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.
Loss per share attributable to equity holders of the Company: 30 June 30 June
2017 2016
(Unaudited) (Unaudited)
Loss for the period (USD'000) (3,118) (3,672)
------------ -----------
Weighted average number of shares 147,637,195 147,637,195
------------ -----------
Basic loss per share (USD) (0.021) (0.025)
------------ -----------
6 Loss per share (continued)
(b) Diluted loss per share
Diluted loss 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
2017 2016
(Unaudited) (Unaudited)
Loss for the period (USD'000) (3,118) (3,672)
------------ --------------------
Weighted average number of shares 147,637,195 147,637,195
------------ --------------------
Diluted loss per share (USD) (0.021) (0.025)
------------ --------------------
The 5,179,116 options (30 June 2016: 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 2017 and 2016. These options could potentially dilute basic earnings per share in future.
The 3,690,930 warrants (30 June 2016: 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 2017 and 2016. These options could potentially dilute basic earnings per share in future.
7 Investment property
30 June 31 December
2017 2016
USD'000 USD'000
(Unaudited) (Audited)
At 1 January 14,725 33,440
Addition during the period/year - 10,219
Disposal during the period/year - (13,623)
Transfer to property and equipment - (19,859)
Net gain from fair valuation - 4,506
Exchange differences - 42
----------- -----------
14,725 14,725
=========== ===========
At 30 June 2017 and 31 December 2016, investment property represent the Group's interest in land held for undetermined use situated in the UAE. 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
Fixture,
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
2017 (Audited) 117,299 238,688 44,266 53,200 4,533 391 458,377
Additions - 20 465 27,363 93 45 27,986
Exchange
differences 2,477 4,807 1,027 1,580 40 1 9,932
------- --------- ------------- -------------- ----------- --------- --------
At 30 June 2017
(Unaudited) 119,776 243,515 45,758 82,143 4,666 437 496,295
======= ========= ============= ============== =========== ========= ========
Accumulated
depreciation:
At 1 January
2017 (Audited) - 12,730 15,783 - 2,102 201 30,816
Charge for the
period - 2,552 2,065 - 228 62 4,907
Exchange
differences - 254 361 - 21 - 636
------- --------- ------------- -------------- ----------- --------- --------
At 30 June 2017
(Unaudited) - 15,536 18,209 - 2,351 263 36,359
======= ========= ============= ============== =========== ========= ========
Net book value:
At 30 June 2017
(Unaudited) 119,776 227,979 27,549 82,143 2,315 174 459,936
======= ========= ============= ============== =========== ========= ========
At 1 January
2017 (Audited) 117,299 225,958 28,483 53,200 2,431 190 427,561
======= ========= ============= ============== =========== ========= ========
8 Property and equipment (continued)
Leased assets
Buildings includes the following amounts where the Group is a lessee under a finance lease (note 16):
Leasehold building 31 December
30 June 2017 2016
USD'000 USD'000
(Unaudited) (Audited)
Cost 9,338 9,330
Accumulated depreciation (700) (466)
-------------------------
Net book amount 8,638 8,864
========================= ===========
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 2017, 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 317,573,000 (31 December 2016: USD 312,928,000). The revaluation surplus is disclosed in the condensed interim consolidated statement of changes in equity. The revaluation surplus cannot be distributed due to legal restrictions.
Total assets under construction as at 30 June 2017 include a hotel in Dubai Healthcare City, amounting to USD 25,177,000 (31 December 2016: USD 23,774,000), hotels in the Kingdom of Saudi Arabia amounting to USD 8,530,000 (31 December 2016: USD 7,649,000), a hotel in Bahrain amounting to USD 8,037,000 (31 December 2016: USD 6,278,000) and a hotel in Australia amounting to USD 41,187,000 (USD 16,313,000).
Land, buildings and fixtures and fittings of operational hotels and hotels under construction with a carrying amount of USD 413,520,000 (31 December 2016: USD 341,591,000) have been pledged to secure borrowings of the Group. The Group is not allowed to pledge these assets as security for other borrowings or to sell them to another entity.
9 Related party balances and transactions
The Group has 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:
9 Related party balances and transactions (continued)
30 June 2017 31 December 2016
USD'000 USD'000
(Unaudited) (Audited)
Due from related parties 8,808 8,720
Due to related parties (6,443) (4,344)
2,365 4,376
============== ================
Due from related parties
Name of related parties Relationship 30 June
2017 31 December 2016
USD'000 USD'000
(Unaudited) (Audited)
Action Real Estate Co. Dubai Shareholder 8,064 7,971
Action Realty Australia Pty Ltd Others 511 456
Action Business Center Ltd Others 213 274
Action Group Holding Company K.S.C.C Shareholder 16 14
Others Others 4 5
8,808 8,720
=========== ================
Interest is charged on amounts due from related parties in Australia at a rate of 6%. The total interest charge is of USD 24,000 (30 June 2016: USD 23,000).
Interest is charged on the advance paid to Action Real Estate Co. Dubai amounting to USD 3,714,000 (31 December 2016: USD 3,714,000) at a rate of 5% (30 June 2016: 5%). The total interest charged during the period amounted to USD 93,000 (30 June 2016: nil).
During the period, the Group received rent from related parties for leasing of premises amounting to USD 86,000 (30 June 2016: USD 46,000).
9 Related party balances and transactions (continued)
Due to related parties
Name of related parties Relationship 30 June 31 December 2016
2017
USD'000 USD'000
(Unaudited) (Audited)
Action Real Estate Co. K.S.C.C. Others 3,133 1,329
Action Real Estate Co. Dubai Shareholder 2,429 2,428
Action Group Holding Company
K.S.C.C Shareholder 400 284
Action Business Center Ltd Others 63 62
Action Group Holding Company (Oman) Others 60 63
Action Group Australia Others 8 -
Others Others 350 178
----------- --------------------
6,443 4,344
=========== ====================
Expenditure incurred on services provided by related parties:
Name of related parties Relationship 30 June 30 June
2017 2016
USD'000 USD'000
(Unaudited) (Unaudited)
Action Real Estate Co. K.S.C.C. Others 2,187 1,274
Dr. Suad M. S. Al Sabah Others 172 -
Action Group Holding Company
K.S.C.C Shareholder 156 104
Action Business Center Others - 38
2,515 1,416
==================== ====================
Expenditure incurred by related parties on behalf of the Group and subsequently recharged:
Name of related parties Relationship 30 June 2017 30 June 2016
USD'000 USD'000
(Unaudited) (Unaudited)
Action Real Estate Co. K.S.C.C. Others 991 57
Action Group Australia Others 8 -
Action Group Holding Company (Oman) Others - 48
Action Group Holding Company
K.S.C.C Shareholder - 18
999 123
================== ===================
9 Related party balances and transactions (continued)
Expenditure incurred by the Group on behalf of the related parties and subsequently recharged:
Name of related parties Relationship 30 June
30 June 2017 2016
USD'000 USD'000
(Unaudited) (Unaudited)
Action Real Estate Co. K.S.C.C. Others 66 48
Action Group Holding Company (Oman) Others 2 14
Action Group Holding Company K.S.C.C Shareholder 1 -
69 62
================== ====================
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.
During 2016, 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 3,700,000 was paid as refundable advance against this agreement. Further in December 2016, Sheikh Mubarak Al Sabah transferred his interest in Action Hotels FZ-LLC together with the advance to Action Real Estate Co. Dubai. The amount of advance paid has been included within due from related parties above.
Loans due to related parties
30 June 31 December
Relationship 2017 2016
USD'000 USD'000
(Unaudited) (Audited)
Action Real Estate Company
Kuwait Others 11,187 1,892
Water Front Place Development
Trust Others 2,412 2,161
Action Group Kuwait Others 2,097 -
Action Group Australia Others 268 234
15,964 4,287
=========== ===========
During the period, the Group obtained loans amounting to USD 11,326,000 (31 December 2016: USD 4,287,000) from various related parties for investment in the Group's development pipeline and general working capital purposes repayable at various dates within 6 months from the date of draw down. In June 2017, the loans were extended by mutual agreement and are now repayable within 13 months from the date of the interim financial statements. The loans carry an interest rate of 9.9% (31 December 2016: 9.9%) per annum. As at 30 June 2017, there is no material variance between the carrying value of the loans and their fair value.
9 Related party balances and transactions (continued)
During the period, the Group paid an interest on these loans amounting to USD 428,000 (30 June 2016: nil).
At 30 June 2017, the Group had total undrawn borrowing facilities from a related party amounting to USD 9,036,000 (31 December 2016: nil).
Remuneration of Key Management Personnel:
30 June
2017 30 June 2016
USD'000 USD'000
(Unaudited) (Unaudited)
Salaries and consultancy fees 513 313
Share based payments - 56
Other benefits 127 18
640 387
=========== ============
10 Borrowings
30 June 31 December
2017 2016
USD'000 USD'000
(Unaudited) (Audited)
Secured
Borrowings 253,215 228,430
Less: non-current borrowings (136,488) (152,491)
Current borrowings 116,727 75,939
=========== ===========
The table below analyses the borrowings into relevant maturity groupings based on the remaining period as at the condensed interim consolidated statement of financial position date to the contractual maturity date.
30 June 31 December 2016
2017
USD'000 USD'000
(Unaudited) (Audited)
Due:
6 months or less 114,210 71,906
6 - 12 months 2,517 4,033
1 - 2 years 5,906 9,204
2 - 5 years 103,280 94,111
More than 5 years 27,302 49,176
----------- ----------------
253,215 228,430
=========== ================
10 Borrowings (continued)
The annual interest rate on loans is as following:
30 June 31 December 2016
2017
USD'000 USD'000
(Unaudited) (Audited)
Kuwaiti Dinar with an annual interest rate 4.45% 3.91%
----------- ----------------
Bahraini Dinar with an annual interest rate 4.98% 4.95%
----------- ----------------
Omani Riyal with an annual interest rate 5.20% 5.04%
----------- ----------------
United States Dollar with an annual interest rate 7.80% 8.16%
----------- ----------------
Australian Dollar with an annual interest rate 3.97% 5.29%
----------- ----------------
Arab Emirates Dirham with an annual interest rate 5.19% -
----------- ----------------
Bank facilities are secured by Hotel Properties, Group's corporate guarantees and letter of undertakings. There is no material variance between the carrying value of loans and their fair value.
The current borrowings in local currency is as follows:
30 June 31 December 2016 30 June 2017 31 December 2016
Local 2017
Currency Currency '000 In USD '000
US Dollar (USD) 19,179 34,235 19,179 34,235
Bahraini Dinar (BHD) 12,400 12,550 33,104 33,327
Kuwait Dinar (KWD) 850 850 2,810 2,781
Omani Rial (OMR) 23,046 2,155 59,848 5,596
UAE Dirhams (AED) 6,563 - 1,786 -
------------ ----------------
116,727 75,939
============ ================
The non-current borrowings in local currency is as follows:
30 June 30 June 2017
Local 2017 31 December 2016 31 December 2016
Currency Currency '000 In USD '000
US Dollar (USD) 7,437 7,990 7,437 7,990
Kuwait Dinar (KWD) 7,750 8,150 25,617 26,666
Australian Dollar (AUD) 110,282 88,379 84,772 63,650
Omani Rial (OMR) - 20,866 - 54,185
UAE Dirhams (AED) 68,528 - 18,662 -
------------ ----------------
136,488 152,491
============ ================
10 Borrowings (continued)
At 30 June 2017, the Group has undrawn banking facilities of USD 82,952,000 (31 December 2016: USD 43,389,000) with commercial banks. The facilities include short-term and long-term loans. Unamortised arrangement fees and other transaction costs amount to USD 3,856,000 (31 December 2016: USD 1,446,000).
During the period, the Group did not comply with certain terms of a loan agreement. However, this non-compliance was remedied before the period end date and the lenders have not requested accelerated repayment of this loan amounting to USD 28,426,000 and accordingly, the Group continues to classify this loan based on its original term.
During the period, the Group did not comply with certain terms in certain loan agreements. This non-compliance was not renegotiated before the period end, however, in August 2017 the Group successfully entered into a refinancing agreement with a new lender for a total facility amounting to USD 75,000,000. The proceeds of this refinancing are expected to be realised during 2017. In accordance with IAS 1, Presentation of financial statements, the Group has therefore reclassified these loans, amounting to USD 59,848,000 as current.
During the period, the Group did not comply with certain terms in certain loan agreements. The Group has not remedied this non-compliance during the period and continues to classify these loans amounting to USD 33,100,000 as current in accordance with IAS 1. In addition, and up to the date of authorisation of these interim financial statements for issue the Group has not received any notice for accelerated repayment of banking facilities from any of its lenders.
11 Share capital and share premium account
Number of USD'000
Share capital shares
At 1 January 2016 (Audited) 147,637,195 24,102
----------- -------
At 31 December 2016 (Audited) 147,637,195 24,102
----------- -------
At 30 June 2017 (Unaudited) 147,637,195 24,102
----------- -------
USD'000
Share premium
At 1 January 2016 (Audited) 124,479
------------------
Transfer to retained earnings (100,000)
------------------
At 31 December 2016 (Audited) 24,479
------------------
At 30 June 2017 (Unaudited) 24,479
------------------
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.
During 2016, the Shareholders authorised the transfer of USD 100,000,000 from the share premium account to accumulated losses.
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
2016
(Audited) 2,966 2,802 (11,012) 600 (5,649) (10,293)
Transfers to
reserves 1,541 105 (722) - - 924
Share based
payments - - - 228 - 228
Total
comprehensive
income for
the year - - (276) - - (276)
---------- ----------- ----------- ----------- --------------------------------- --------
At 31 December
2016
(Audited) 4,507 2,907 (12,010) 828 (5,649) (9,417)
========== =========== =========== =========== ================================= ========
At 1 January
2017
(Audited) 4,507 2,907 (12,010) 828 (5,649) (9,417)
Transfer to
reserves - - - 4 - 4
Total
comprehensive
income for
the period - - 3,208 - - 3,208
---------- ----------- ----------- ----------- --------------------------------- --------
At 30 June
2017
(Unaudited) 4,507 2,907 (8,802) 832 (5,649) (6,205)
========== =========== =========== =========== ================================= ========
13 Dividends
The Company declared final dividend amounting to USD 2.9 million (GBP 1.50p per share) in respect of year ended 31 December 2016 and was approved by the shareholders at their meeting on 13 June 2017. This dividend was paid during the period ended 30 June 2017.
14 Fair value measurements of non-current assets
The change in fair value measurements of investment property and hotels in operation for the six months ended 30 June 2017 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 2016 and the Directors of the Group review the valuation process undertaken and consider whether it remains appropriate.
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.
14 Fair value measurements of non-current assets (continued)
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 2017 At 30 June 2016
(Unaudited) (Unaudited)
Discount rate: owned asset 9.1%-12.5% 10% - 12%
---------------- -----------------
Exit yield 6% - 10.0% 8% - 9%
---------------- -----------------
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 of the property.
15 Commitments
At 30 June 2017, the Group had entered into contractual commitments for hotels under construction amounting to USD 105,111,000 (31 December 2016: USD 125,234,000).
16 Lease arrangements (a) 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
2017 2016
USD'000 USD'000
(Unaudited) (Unaudited)
Lease payments under operating leases recognised as an expense during the period 1,366 1,376
----------- -----------
16 Lease arrangements (continued)
(a) Operating lease arrangements (continued)
At the condensed interim consolidated statement of financial position date, the future minimum lease payments payable under operating leases are as follows:
30 June 31 December
2017 2016
USD'000 USD'000
(Unaudited) (Audited)
Within one year 4,514 4,364
Between two and five years 17,771 17,831
After 5 years 76,285 77,764
----------- -----------
98,570 99,959
=========== ===========
(b) Finance lease arrangements
During 2016, the Group entered into a finance lease for a property in the Kingdom of Saudi Arabia for a period of twenty years. Management has determined that this lease should be accounted for as finance lease. Accordingly, the Group recognised a finance lease asset and a liability amounting to USD 9,330,000 in 2016. At the condensed interim consolidated statement of financial position date, the commitments in relation to finance leases are payable as follows:
30 June 31 December
2017 2016
USD'000 USD'000
Within one year 611 610
Between two and five years 2,711 2,642
After 5 years 12,093 12,456
------- -----------
Minimum lease payments 15,415 15,708
Future finance charges (6,343) (6,552)
------- -----------
9,072 9,156
The present value of finance lease liabilities is as follows:
30 June 31 December
2017 2016
USD'000 USD'000
Within one year 531 544
Between two and five years 2,085 2,081
After 5 years 6,456 6,531
-------
9,072 9,156
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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR VVLFFDKFEBBZ
(END) Dow Jones Newswires
September 19, 2017 02:00 ET (06:00 GMT)
1 Year Action Hotels Chart |
1 Month Action Hotels Chart |
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
