We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register to chat with like-minded investors on our interactive forums.
| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| China Travel International Investment Hong Kong Ltd | TG:CTI | Tradegate | Ordinary Share |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.005 | 4.13% | 0.126 | 0.12 | 0.131 | 0.00 | 22:50:08 |
Hot Features
Premium
RNS Number:0619K
Cathay International Holdings Ld
15 April 2003
15th April, 2003
CATHAY INTERNATIONAL HOLDINGS LIMITED
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2002
CHAIRMAN'S STATEMENT
During 2002, your Board and the management team concentrated on improving the
performance of the Group and its assets. We have also been engaged in
positioning the Company to pursue its core strategy: investing in businesses in
the People's Republic of China (the 'PRC') that will earn an attractive return
and provide capital growth for our shareholders.
2002 PERFORMANCE
In 2002, the PRC economy grew by 8% GDP. This made China one of the fastest
growing economies in the world. The Group's hotels were, however, operating in
highly competitive markets with particularly strong competition from newly
opened restaurants in Beijing and Shenzhen. Rental income from the Group's UK
asset, the Stonehill Business Park, remained firm but expenses were greater than
anticipated, due to the continued requirement to invest in the repair and
maintenance of the ageing buildings and infrastructure on the site.
Gross turnover for the year ended 31 December 2002 was USD32,586,000 (2001:
USD34,015,000). The operating loss for 2002 was USD61,810,000 (2001: operating
loss of USD7,464,000). This included an exceptional charge of USD163,566,000
(2001: USD30,480,000) arising from the write-down in the carrying value of the
Xiyuan Hotel and Xiyuan development site, which was partly offset by
amortisation of negative goodwill of USD98,140,000 (2001 USD18,288,000). The
pre-tax loss before minority interests was USD64,048,000 (2001: USD10,316,000).
The loss after tax and minority interests for the year was USD1,011,000 (2001:
USD539,000). Net assets per share were USD0.470 (2001: USD0.491). Gearing
increased slightly to 27.3% (2001: 26.5%).
Gross operating profits for the Xiyuan Hotel in 2002 were 23% higher than the
previous year. The average occupancy rate was 75% in 2002, the same as in 2001.
The average room rates were 2.9% higher than those achieved in 2001.
The Group conducted an annual valuation of its properties. The annual valuation
of the Group's Chinese properties was carried out by international real estate
advisors, Insignia Brooke (Hong Kong) Limited. In view of the decision to
discontinue the Xiyuan joint venture referred to below, the valuation of the
Xiyuan development site was carried out on an existing use basis rather than by
reference to its development potential, which was the basis used in previous
years. The significant decrease in asset values resulted in the exceptional
charge mentioned above, which was partly offset by amortisation of the negative
goodwill associated with those assets and partly offset by minority interests.
The write down in the valuation of the Landmark Hotel of USD9,600,000 has been
taken to the revaluation reserve.
The average occupancy level of the Landmark Hotel dropped to 65% in 2002 from
68% in 2001. The average room rate dropped by 8% in 2002 compared to 2001.
Many restaurants which were targeted toward the high end of the market were
opened in Shenzhen during the year. In this extremely competitive environment,
the food and beverage turnover decreased by 17% during 2002. Gross operating
profits of the Landmark Hotel in 2002 were 13% lower than the previous year at
USD1,542,000 (2001: USD1,744,000).
Rental income from the Stonehill Business Park, situated on the Lea Valley
Trading Estate in North London, was 2% greater in 2002 than in the previous
year. However, the gross operating profits of the Park decreased by 10%. The
net loss for 2002 was USD231,000 compared to a loss of USD309,000 in 2001.
POST BALANCE SHEET EVENTS
Although extensive negotiations were conducted in 2002, the sale of the
Stonehill Business Park and the distribution of assets by the joint venture
company owning the Xiyuan Hotel and development site were not completed until
the first quarter of 2003. Following these transactions and notwithstanding the
return of surplus cash to shareholders through a tender offer, the Company is in
a strong financial position and able to respond rapidly to attractive
opportunities for increasing shareholder value.
Sale of Stonehill Business Park
On 13 January 2003, shareholders approved the proposed disposal of the Stonehill
Business Park for a cash consideration of #19,550,000. As reported in the
circular to shareholders, the business park represented the only non-China asset
of the Group. The Group's management had improved the Stonehill results over
recent years, but the property and site required significant additional capital
investment to improve the ageing buildings and infrastructure. Your Board
believed that the Group's resources would be much better invested in projects in
China in line with the Company's core strategy. Your Board also believed that
the high values in the UK property market at that time represented an optimum
time to dispose of this non-core asset.
After adjusting for transaction expenses and taxation the disposal will result
in a small exceptional gain which will be reflected in the accounts for the year
ending 31 December 2003.
Distribution of assets in relation to Xiyuan Hotel and Development Site
As a result of the oversupply of commercial buildings in Beijing which has
continued to increase, your Board did not pursue the development of the site as
it had not, in its view, been in shareholders' best interests to do so.
The Beijing Municipal Government clearly expressed its desire to complete the
redevelopment of the site in connection with the 2008 Beijing Olympic Games
notwithstanding the current oversupply of commercial property. Your Board,
however, did not believe that the immediate or longer term prospects for the
Beijing property market justified the substantial investment that would be
necessary to finance such redevelopment. Furthermore, any such investment would
require a significant level of debt funding which your Board did not believe
would be prudent.
Following discussion of the differing objectives and commercial priorities of
the joint venture partners and the Beijing Municipal Government, negotiations
took place resulting in an agreement to bring the joint venture to an end.
On 24 February 2003, shareholders approved the termination of the joint venture
relating to the Xiyuan Hotel and development site in Beijing and a distribution
of assets by the joint venture company, Beijing Xiyuan Landmark Limited ("
Beijing Xiyuan"). The distribution resulted in a cash entitlement for the Group
of USD50,900,000, net of taxes, which included USD18,747,000 of undistributed
profits of Beijing Xiyuan.
After netting off the remaining negative goodwill of USD4,404,000, the disposal
of the 60% equity interest in Beijing Xiyuan will give rise to a small profit
which will be reflected in the accounts for the year ending 31 December 2003.
Tender Offer
Following the sale of the Stonehill Business Park and the distribution of assets
by Beijing Xiyuan, your Board concluded that approximately USD23,716,000 would
be surplus to the Group's short term requirements and that a tender offer was
the most appropriate means of returning such surplus to shareholders. On 24
February 2003, shareholders approved a proposed tender offer by the Company to
purchase up to 100,000,000 common shares at a fixed price of 15 pence per common
share, representing a 93.5% premium to the closing share price on the day prior
to the announcement of the tender offer.
The tender offer closed on 26 February 2003 and was fully subscribed.
CONCLUSION
The management of the Group is actively pursuing appropriate investment
opportunities in the PRC. The Group has a sound balance sheet and is well
positioned to pursue these opportunities and your Board hopes to be able to
announce details of new investments during the current year.
The Group is committed to strengthening the management team to support new
investments. Changing "best practice" requirements will also be considered and
addressed to ensure good corporate governance. The Group is also planning to
improve the flow of information to its shareholders . Finally, I would like to
thank the management team for its continuing hard work and commitment.
James Buchanan
Chairman
Enquiries:
Stephen Hunt (Deputy Chairman) (via Brunswick) 020 7404 5959
Patrick Sung (Director - Finance)
Jon Coles, Brunswick 020 7404 5959
OPERATIONAL REVIEW
LANDMARK HOTEL (SHENZHEN)
Opened in June 1994, the Landmark Hotel is a 5-star hotel located in Shenzhen,
the PRC. The property currently comprises 351 guest rooms (or 392 room
modules), a business centre, a coffee shop, restaurants, function rooms, disco
and karaoke facilities, a golf driving range, a health club and a swimming pool.
Since the opening of the Hotel, management has recognized customers' evolving
needs through continually upgrading and improving hotel facilities by, for
example, the establishment of a new shuttle service to the railway station, the
installation of a new business centre on the executive floors, the provision of
internet access, the addition of new parking facilities and the addition of a
golf driving range and a billiard room in the health club.
In 2002, the Landmark Hotel was adversely affected by the extremely competitive
conditions in Shenzhen. The Hotel experienced a 3% lower average occupancy rate
than in 2001 and the food and beverage turnover decreased by 17%. This decrease
was mainly due to the opening of many new Chinese restaurants in Shenzhen.
During the year the management focused on upgrading and improving hotel
facilities for corporate customers. For example, a new enlarged meeting room of
52 sq.m., ideal for seminars and training sessions, was added on the 4th floor
and broadband internet connections were installed in every room for laptop
users. The Hotel continues to take stringent steps to reduce costs. Staff
numbers were reduced from 561 at the beginning of the year to 506 at the end of
2002. With tight expense control and continued investment in this major asset,
improved results are expected from the Landmark Hotel.
XIYUAN HOTEL AND SITE (BEIJING)
In 1993, the Group acquired a 60% equity interest in Beijing Xiyuan to operate
the Xiyuan Hotel and to develop the site of some 68,000 sq.m. in the Haidian
District of Beijing.
During 2002, the Group continued to invest in the facilities of the Hotel. The
western bar and restaurant on the 25th floor were completely renovated.
Conference and meeting rooms were refurbished. Lifts were reconditioned and in
some cases replaced.
In a very competitive market, Beijing Xiyuan managed in 2002 to maintain its
average occupancy rate at 75%, the same level as in 2001. Average room rates
were 2.9% higher than those achieved in 2001. The food and beverage result
decreased by 3.4% from 2001 to 2002.
Because of the growing oversupply of commercial buildings in Beijing, which has
continued to increase in recent years, the Board chose not to pursue the
development of the site.
As reported in the Chairman's Statement, the joint venture relating to Beijing
Xiyuan was terminated and its assets distributed in February 2003.
UK PROPERTY (STONEHILL BUSINESS PARK)
Stonehill Business Park, a 27-acre industrial estate, is situated on the Lea
Valley Trading Estate in North London. During 2002, the Group continued to
engage GVA Grimley to provide professional management of the park.
Stonehill maintained a steady performance in 2002 against the background of
increasingly uncertain market conditions. The occupancy level remained high
throughout the year, rising from 88% of lettable space at the end of 2001 to 89%
at year end 2002. Rental income showed a modest 2% increase in 2002.
Although Stonehill Estates Limited's results have improved over recent years,
the property has required a growing amount of capital investment to maintain the
ageing buildings and infrastructure.
As reported in the Chairman's Statement, this property was sold in January 2003.
GROUP PROFIT AND LOSS ACCOUNT
For the year ended 31 December 2002
Year Ended Year ended
31 December 31 December
2002 2001
Notes USD'000 USD'000
TURNOVER 2
Continuing operations 9,793 11,795
Discontinued operations 22,793 22,220
_________ _________
32,586 34,015
COST OF SALES (25,491) (27,620)
_________ _________
GROSS PROFIT 7,095 6,395
ADMINISTRATIVE EXPENSES
Administrative expenses (3,479) (1,667)
Deficit on revaluation of fixed assets (163,566) (30,480)
Amortisation of negative goodwill 98,140 18,288
__________ _________
(68,905) (13,859)
__________ _________
OPERATING PROFIT
Continuing operations 783 656
Discontinued operations (62,593) (8,120)
__________ _________
(61,810) (7,464)
EXCEPTIONAL ITEMS
Reorganisation costs of continuing operations - (782)
Profit on sale of fixed assets 274 -
__________ _________
LOSS ON ORDINARY ACTIVITIES BEFORE
INTEREST AND TAXATION (61,536) (8,246)
INTEREST (2,512) (2,070)
__________ _________
LOSS ON ORDINARY ACTIVITIES BEFORE
TAXATION 2 (64,048) (10,316)
TAXATION 4 (993) (1,028)
__________ _________
LOSS ON ORDINARY ACTIVITIES AFTER
TAXATION (65,041) (11,344)
MINORITY INTERESTS 64,030 10,805
__________ _________
ACCUMULATED LOSS ATTRIBUTABLE
TO SHAREHOLDERS (1,011) (539)
__________ _________
LOSS PER SHARE 5
BASIC (0.36) cents (0.19 cents)
__________ _________
__________ _________
GROUP BALANCE SHEET
As at 31 December 2002
As at As at
31 December 31 December
2002 2001
USD'000 USD'000
FIXED ASSETS
Tangible assets 197,464 369,121
Negative goodwill (4,404) (102,544)
___________ ___________
193,060 266,577
___________ ___________
CURRENT ASSETS
Stocks 1,116 1,140
Debtors 1,882 1,788
Cash at bank and in hand 43,320 39,865
___________ ___________
46,318 42,793
CREDITORS: amounts falling due within one year (39,334) (28,682)
___________ ___________
NET CURRENT ASSETS 6,984 14,111
___________ ___________
TOTAL ASSETS LESS CURRENT LIABILITIES 200,044 280,688
CREDITORS: amounts falling due after one year (23,286) (33,870)
___________ ___________
176,758 246,818
MINORITY INTEREST (44,738) (108,882)
___________ ___________
NET ASSETS 132,020 137,936
========= =========
CAPITAL AND RESERVES
Called up share capital 14,042 14,042
Revaluation reserve 67,683 76,213
Capital and special reserve 3,206 3,206
Statutory reserve 2,550 2,463
Merger reserve 58,433 58,433
Exchange equalisation reserve 4,687 1,029
Profit and loss account (18,581) (17,450)
____________ ___________
SHAREHOLDER'S FUNDS 132,020 137,936
========== =========
GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
For the year ended 31 December 2002
Year ended Year ended
31 December 31 December
2002 2001
USD'000 USD'000
LOSS FOR THE YEAR (1,011) (539)
Unrealised (loss)/gain on revaluation of hotel properties (8,378) 2,546
___________ ___________
Total (loss)/gain for the year before currency adjustments (9,389) 2,007
Exchange adjustments 3,473 22
___________ ___________
TOTAL (LOSS)/GAIN RECOGNISED FOR THE YEAR (5,916) 2,029
___________ ___________
RECONCILIATION OF SHAREHOLDERS' FUNDS
Total recognised (loss)/gain (5,916) 2,029
Shareholders' funds at beginning of year 137,936 135,907
___________ ___________
Shareholders' funds at end of year 132,020 137,936
========= =========
GROUP CASH FLOW STATEMENT
For the year ended 31 December 2002
Year ended Year ended
31 December 31 December
2002 2001
Note USD'000 USD'000
OPERATING ACTIVITES
Net cash inflow from operating activities 6 4,598 5,892
SERVICING OF FINANCE
Interest paid (2,409) (2,656)
Interest received 525 1,301
___________ ___________
Net cash outflow from servicing of finance (1,884) (1,355)
___________ ___________
TAXATION - paid (940) (1,117)
___________ ___________
CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
Payments to acquire tangible fixed assets (2,154) (6,371)
___________ ___________
Cash outflow from capital expenditure and financial investment (2,154) (6,371)
___________ ___________
ACQUISITIONS AND DISPOSALS
Cash disposed of with subsidiary undertaking - (104)
Proceeds from disposal of tangible fixed assets 1,576 -
___________ ___________
1,576 (104)
___________ ___________
MANAGEMENT OF LIQUID RESOURSES
Decrease/(increase) in short tem deposits 7 4,982 (6,579)
___________ ___________
NET CASH INFLOW/(OUTFLOW) BEFORE FINANCING 6,178 (9,634)
___________ ___________
FINANCING
(Repayment of)/receipts from borrowing 7 (3,122) 2,517
New loans 7 2,359 4,230
Costs associated with group reorganisation - (782)
___________ ___________
Net cash (outflow)/inflow from financing (763) 5,965
___________ ___________
Increase/(decrease) in cash 5,415 (3,669)
========= =========
GROUP CASH FLOW STATEMENT
For the year ended 31 December 2002
Year ended Year ended
31 December 31 December
2002 2001
Note USD'000 USD'000
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN
NET DEBT
Increase/ (decrease) in cash 5,415 (3,669)
Cash inflow from increase in loans - (2,517)
Repayment of loans 3,122 -
Cash (inflow from)/outflow to short term deposits (4,982) 6,579
New loans (2,359) (4,230)
___________ ___________
Change in net debt resulting from cash flows 7 1,196 (3,837)
Exchange differences 7 907 449
Other non-cash items 7 (628) 937
___________ ___________
MOVEMENT IN NET DEBT 1,475 (2,451)
NET DEBT AT 1 JANUARY 7 (11,420) (8,969)
___________ ___________
NET DEBT AT 31 DECEMBER 7 (9,945) (11,420)
========= =========
Notes:
1. BASIS OF PREPARATION AND ACCOUNTING
The financial statements have been prepared under the historical cost
convention, modified where appropriate to incorporate the professional valuation
of certain fixed assets, and in accordance with applicable UK accounting
standards.
2. Segmental Information
2.1 Turnover
An analysis of turnover is as follows:
Hotel Property
Operations Investment Total
USD'000 USD'000 USD'000
For the year ended 31 December 2002
United Kingdom - 2,404 2,404
PRC 29,806 376 30,182
__________ _________ ________
Turnover 29,806 2,780 32,586
========= ======== =======
For the year ended 31 December 2001
United Kingdom - 2,364 2,364
PRC 31,596 55 31,651
_________ _________ ________
Turnover 31,596 2,419 34,015
========= ======== =======
2.2 Business and regional analysis
Property Corporate
Hotel Property Investment Property Property Office
Operations Investment United Development Development Hong
PRC PRC Kingdom PRC UK Kong Total
USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 USD'000
For the year ended
31 December 2002
Profit (loss) before (2,912) 589 311 (60,274) - (1,762) (64,048)
taxation
Net operating assets 144,254 1,297 22,334 17,220 3,459 - 188,564
_________ ________ _________ __________ __________ ________ ________
For the year ended
31 December 2001
Profit (loss) before 1,093 55 268 (8,955) - (2,777) (10,316)
taxation
Net operation assets 156,155 2,618 20,347 77,799 3,127 - 260,046
======== ======= ======== ======== ======== ====== ======
Included in losses for the period is a deficit on revaluation of properties of
USD163,566,000 (2001: USD30,480,000) which principally relates to hotel
properties and properties held for development situated in Beijing. Negative
goodwill of USD98,140,000 (2001: USD18,288,000) has been amortised in respect of
this, the balance of the write down was borne by the minority shareholder in
that subsidiary.
Reconciliation of net assets
At At
31 December 31 December
2002 2001
USD'000 USD'000
Net operating assets (note 2.2) 188,564 260,046
Cash at bank and in hand 43,320 39,865
Tax liabilities (1,861) (1,808)
Bank overdraft and loans (36,025) (36,604)
Loan from a related company (9,001) (9,053)
Loan from immediate parent undertaking (8,239) (5,628)
________________ _______________
176,758 246,818
Minority interests (44,738) (108,882)
________________ _______________
Net assets 132,020 137,936
============== =============
The minority interest relates to Beijing Xiyuan Landmark Limited the significant
underlying assets of which are the property held for development and the Xiyuan
Hotel in Beijing.
3. DIRECTORS' EMOLUMENTS
The Directors at 31 December 2002 were as follows:
J.R.H. Buchanan
Wu Zhen Tao
S. B. Hunt
J.H. Cosson
P. Sung
R. Chow
Their aggregate emoluments for the year ended 31 December 2002 were USD564, 000
(2001: USD554,000).
4. TAXATION
Year ended Year ended
31 December 31 December
2002 2001
USD'000 USD'000
Profits tax payable in the PRC at 33% 993 1,028
__________ __________
The Group has tax losses of approximately USD6.1m available to carry forward
against taxable profits make in the UK in future years. These losses are not
available to group relieve against profits earned in the PRC.
5. EARNINGS PER SHARE
Basic earnings per share is based upon the loss attributable to shareholders of
USD1,011,000 (2001: USD539,000) and the weighted average number of A shares and
Common shares in issue during the year of 13,522,036 and 267,320,069
respectively (2001: A shares: 14,042,105, Common shares: 266,800,000).
Since there were no shares options for both years, no adjustment to basic
earnings per share is necessary in calculating the diluted earnings per share.
6. RECONCILIATION OF OPERATING LOSS TO NET CASH INFLOW FROM OPERATING ACTIVITES
31 December 31 December
2002 2001
USD'000 USD'000
Operating loss (61,810) (7,464)
Loss on disposal of fixed assets 67 42
Impairment of fixed assets 163,566 30,480
Amortisation of negative goodwill (98,140) (18,288)
Depreciation of fixed assets 1,531 1,395
Provision for doubtful debts - 36
Decrease in stocks 24 157
Increase in debtors (94) (229)
Decrease in creditors (546) (237)
____________ ___________
Net cash inflow from operating activities 4,598 5,892
========== ==========
7. ANALYSIS OF NET DEBT
At Other At
1 January Cash Exchange Non-cash 31 December
2002 flow difference movements 2002
USD'000 USD'000 USD'000 USD'000 USD'000
Cash at bank and in hand 4,218 6,989 1,975 - 13,182
Bank overdrafts (651) (1,574) (69) - (2,294)
____________ ____________ ___________ ____________ ____________
Cash 3,567 5,415 1,906 - 10,888
Short term deposits 35,647 (4,982) (527) - 30,138
Bank loans (35,953) 2,722 (500) - (33,731)
Loan from a related (9,053) 400 21 (369) (9,001)
Company
Loan from an immediate
parent undertaking (5,628) (2,359) 7 (259) (8,239)
___________ ____________ ___________ ____________ ____________
(11,420) 1,196 907 (628) (9,945)
========= ========== ========= ========== ==========
8. FINANCIAL INFORMATION
The above figures have been extracted from the full financial statements of
Cathay International Holdings Limited and on which the auditors have made an
unqualified audit report.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR IAMTTMMBBBPJ
1 Year China Travel Internation... Chart |
1 Month China Travel Internation... Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
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
