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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Easyhotel Plc | LSE:EZH | London | Ordinary Share | GB00BN56KF84 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 76.00 | 70.00 | 82.00 | 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
TIDMEZH
RNS Number : 4882Y
easyHotel PLC
06 December 2017
6 December 2017
easyHotel plc
FINAL RESULTS FOR THE YEARED 30 SEPTEMBER 2017
Delivering revenue and earnings growth as development pipeline accelerates
Strong trading performance, slightly ahead of Board expectations
easyHotel plc ("easyHotel") ("the Group") (AIM: EZH) the owner, developer and operator of super budget branded hotels, today announces its final results for the financial year ended 30 September 2017.
Financial highlights
Hot Features
Premium
Year ended 30 September 2017 2016
Total system sales 29.67 21.32 +39.2%
Revenue 8.42 6.02 +39.7%
Adjusted EBITDA 2.30 1.55 +48.3%
Profit before tax 0.86 1.09 -21.1%
Basic earnings per share (pence) 0.7 1.4 -50.0%
Total dividend per share (pence) 0.33 0.33
-- Adjusted EBITDA is up by 48.3% with margin increased to 27.3% (2016:
25.7%)
-- Profit before tax of GBP0.86m (2016: GBP1.09m), reflecting increased
costs associated with the expanding development pipeline, the GBP0.24m
net book value negative impact of the closure of two floors at easyHotel
Old Street and the absence of any capital gain this year from disposals
(2016: GBP0.28m)
-- Cash generated from operations increased to GBP2.22m (2016: GBP0.85m)
-- Robust asset backed balance sheet with net assets of GBP70.2m (2016:
GBP33.2m)
Business highlights
-- Owned hotels significantly outperformed competitive set with like-for-like
revenues up 13.7%
-- Like-for-like franchise revenues up 8.6%, with particularly strong
performance in Continental Europe
-- Smooth implementation of booking engine and yield management systems
underpinning positive trading momentum
-- Five new hotels totalling 535 rooms opened over the course of the
year and trading exceptionally strongly, with combined occupancy
of over 85%
-- Total network of 598 owned rooms and 1,750 franchised rooms
Significantly accelerated development pipeline
-- Three new owned hotel sites in Leeds, Sheffield and Oxford secured
over the year
-- 404 owned rooms and 835 franchised rooms added to the development
pipeline
-- Total development pipeline of 921 owned rooms and 1,798 franchised
rooms
Post year end events
-- easyHotel Liverpool opened in November 2017 adding 78 rooms to the
network
-- 104-room Newcastle hotel secured in October 2017 opening as an easyHotel
this month
-- Acquisition of site in Cardiff for development of 120-room hotel,
subject to planning permission
-- Two new franchise hotels in the Netherlands will add a further 162
rooms to the development pipeline
Commenting, Guy Parsons, CEO of easyHotel plc, said:
"2017 has been a year of strong progress for the Group as we continue to develop the easyHotel brand as a market leader in "super-budget" sleep. Impressive like-for-like sales growth has been achieved across our existing network of hotels, underpinned by the smooth implementation of our new booking engine and yield management system across the entire easyHotel network.
We continue to accelerate our growth plans for the brand, targeting carefully selected locations to build our portfolio of owned and franchised hotels and applying strict investment criteria, ensuring we can continue to deliver a blended ROCE target of 15%. Five new hotels were opened over the course of the year, with easyHotel Liverpool opened since the year end. All have traded strongly since opening and we have been delighted with the positive customer reaction to our stylish new brand format.
The Group's asset backed balance sheet remains strong but with our current development pipeline we are only able to finance one further owned hotel. We continue to see a good number of attractive potential development opportunities to further accelerate the Group's growth. Consequently, the Board is considering its financing options, which may include new equity and debt, to fund these opportunities.
Whilst the wider macro-economic uncertainty continues to impact consumer confidence, we believe easyHotel is well positioned. The refinements that have been introduced to the business over the course of the last year are further strengthening our brand and ensuring that the easyHotel offering is one that can support delivery of the Board's ambitious long-term strategy for growth."
Enquiries:
easyHotel plc Guy Parsons, Chief Executive www.easyhotel.com Officer Marc Vieilledent, Chief Financial http://ir.easyhotel.com Officer Investec (Nominated Adviser and Broker) +44 (0) 20 7597 5970 David Anderson Houston PR (Financial PR) +44 (0) 20 3701 7660 Kate Hoare
Notes to Editors:
www.easyhotel.com http://ir.easyhotel.com
easyHotel is the owner, developer, operator and franchisor of branded hotels. Its strategy is to target the "super budget" segment of the hotel industry by marketing "clean, comfortable and safe" hotel rooms to its customers.
Operating hotels
easyHotel's six owned hotels currently comprise 598 rooms, and it has a further 20 franchised hotels with 1,750 rooms.
Owned hotels:
Old Street (London), Glasgow, Croydon, Birmingham, Manchester, Liverpool.
Franchise locations:
Belgium (Brussels), Bulgaria (Sofia), Germany (Berlin, Frankfurt), Hungary (Budapest), The Netherlands (Amsterdam: City, Arena & Zaandam, Rotterdam, The Hague), Switzerland (Basel, Zurich), UAE (Dubai), United Kingdom (Edinburgh, London Heathrow, Central London, Luton).
Hotel development pipeline
The Company's committed development pipeline of owned and franchised hotels currently consists of:
Owned hotels:
United Kingdom (Ipswich, Sheffield, Leeds, Newcastle* to be opened on 11 December 2017), Spain (Barcelona) Subject to planning consent: United Kingdom (Cardiff and Oxford*).
Franchise hotels:
UAE (Dubai), Germany (Bernkastel-Kues), Portugal (Lisbon), Turkey (Istanbul), UK (Belfast, Reading), Iran, Sri Lanka, Netherlands (The Hague Scheveningen Beach, Maastricht).
*Hotels being developed under an operating lease.
Chairman's statement
I am delighted to report that easyHotel has made great progress in implementing its strategy for growth. Strong trading across both the existing estate and the Group's newly opened hotels has delivered increases not only in total systems sales but like-for-like revenues as well.
Strategy
We continue to target carefully selected locations to build our portfolio of owned and franchised hotels, adopting a methodical approach to the assessment of individual pipeline opportunities and applying strict investment return criteria. In addition, a number of initiatives have been progressed during the year to optimise the value of existing assets including investments to improve our revenue management systems and processes and our customers' online booking experience.
The equity capital and bank debt we raised last year has enabled us to commit to a strong pipeline of new sites. Following recent acquisitions those funds are now substantially committed. Further refinements to our hotel development processes and design standards will deliver a lower risk, higher performing model for new projects. During the year, two new owned hotels have been opened in Birmingham and Manchester and both are trading strongly. Since the year end, our new owned hotel in Liverpool was opened on 1 November 2017 and further projects are in progress in Newcastle, Barcelona, Leeds, Sheffield, Ipswich, Oxford and Cardiff. This significant increase in our owned estate, together with new franchised hotels opened in Brussels, Amsterdam Arena and Amsterdam Zaandam (and with others on the way), are providing an ever-more solid foundation for our strengthening brand.
The benefit of our 'new look' room design is evidenced by the performance we are seeing from our newly launched hotels which continue to exceed our own expectations. A programme to refresh two of three legacy owned assets (Croydon and Glasgow) will be completed within the coming months and we expect to see a similar positive impact on the revenues of those hotels. In addition, we have plans to upgrade our London Old Street 92-bedroom hotel and, subject to planning consent, exploit the value of the remainder of the building through development of office accommodation.
Dividend
An interim dividend of 0.11p per ordinary share was paid on 30 June 2017. The Board is now pleased to recommend to shareholders the payment of a final dividend of 0.22p per share on the basis of our enlarged share capital. Subject to shareholder approval at our forthcoming AGM, this dividend will be paid on 15 February 2018 to shareholders on the register on 19 January 2018.
Board and management team
The Board would like to thank everyone in easyHotel's team for their part in delivering another successful year for the business. In particular, the Company has benefited from continuity within our skilled executive team. Chief Executive Officer, Guy Parsons, and Chief Financial Officer, Marc Vieilledent, bring a wealth of sector experience, hard work and commitment, that enables us to make considerable progress. We are very fortunate to have Scott Christie's wise and pragmatic contribution as Non-Executive Director and Chairman of our Audit and Remuneration Committees.
Outlook
Whilst the wider macro-economic uncertainty continues to impact consumer confidence, we believe easyHotel is well positioned. The refinements that have been introduced to the business over the course of the last year are further strengthening our brand and ensuring that the easyHotel offering is one that can support delivery of the Board's ambitious long-term strategy for growth.
Chief Executive Officer's Review
Strategy
I am delighted to be leading this ambitious business at such an exciting time in its history.
2016/17 was a significant year for easyHotel with excellent progress achieved across all areas of the business. Impressive like-for-like sales growth was delivered, underpinned by the smooth implementation of our new booking engine and yield management system across the entire easyHotel network. We opened five new hotels during the year in our new stylish brand format, all of which have traded strongly from opening. The increase in sales and new openings, together with our focus on reducing costs, improving efficiencies and maximising the returns from our investments, have produced a significant growth in our underlying profits.
Our pipeline of new hotels is accelerating. The successful equity fundraise in October 2016 is enabling us to develop and open more owned hotels and such investment in the brand and estate should in turn encourage more franchisees to join the brand.
With the experienced team we now have in place, continued high levels of staff engagement and improving customer satisfaction, we are in an excellent position to expand the easyHotel brand and deliver improving returns for our shareholders.
Trading review
Total system sales grew by 39.2% to GBP29.7m with Company revenues increasing by 39.7% to GBP8.4m. This was achieved through like-for-like owned and franchise hotel sales growth of 9.8% as well as the opening of new owned hotels in Birmingham and Manchester, and franchised hotels in Brussels, Amsterdam Arena and Amsterdam Zaandam. Occupancy for all owned and franchised hotels was 79.7% (2016: 76.2%). The five hotels opened in the new brand style have all traded very strongly since opening, with a combined occupancy in excess of 85%. We will continue to monitor their progress closely and the impact on the time taken for new hotels to reach maturity in future. Our strong sales performance led to a 48.3% increase in adjusted EBITDA to GBP2.30m (2016: GBP1.55m).
Owned hotels
Our owned hotels continued to win market share with revenue growing by 13.7% on a like-for-like basis. The new booking engine and revenue management system rollout, together with selling an allocation of rooms via selected online travel agencies (OTAs), resulted in our owned hotels significantly outperforming their competitive set (as measured by STR) throughout the year. As previously announced, the Board plans to retain a 92-room hotel at Old Street and applying for planning permission to add additional floors to the building for use as office accommodation which should maximise value from this freehold property. We have started a GBP1.5m refurbishment of our other two legacy owned assets in Croydon and Glasgow, to improve the quality of the hotels and to bring them into line with our new brand look. We expect their refurbishment to be revenue enhancing during the current financial year.
Franchise partners
Like-for-like revenue at our franchised hotels increased by 8.6% during the financial year, with total currency adjusted sales increasing by 32.2%. The hotels in Continental Europe performed particularly strongly. Dubai, Luton and Heathrow were refurbished during the year and we are discussing refurbishment plans with a number of other franchisees to introduce the new brand look and feel. There were 20 franchise hotels operating in our network at 30 September 2017.
Market outlook
The UK hotel market performed strongly in 2017 with Sterling's weakness (vs. the US Dollar and Euro) resulting in an increase in staycations and inbound tourism. London's RevPAR growth was particularly strong during the first half of the year and encouragingly, regional RevPAR has also improved. The European hotel market continued to perform strongly during the financial year. Growth in Europe is still being predominantly driven by occupancy, which suggests a healthy supply and demand balance and scope for further rate increases.
The Board remains confident that despite any uncertainties surrounding the current Brexit negotiations, the easyHotel brand will continue to outperform its hotel sector as consumers seek out the best value for money.
Development review
Development of owned hotels
We have a growing pipeline of hotels under development. Barcelona and Ipswich, both acquired last year, will open in mid-2018. During the year and post year end, we secured a further five new hotel sites in aggregate which are listed below:
-- Lands Lane, Leeds, acquired under a 250-year ground lease. The 93-room
hotel will open in mid-2018.
-- High Street, Sheffield, acquired on a freehold basis. The 131-room
hotel will open in mid-2018.
-- Oxford, a 25-year lease, subject to planning permission. The 180-room
hotel should open during the next financial year.
-- Central Cardiff, acquired on a freehold basis, subject to planning
permission. The 120-room hotel will open in 2019.
-- Tune hotel in Newcastle, we agreed to take over a 25-year lease
of a 104-room, opening as an easyHotel this month.
Recently opened hotels, with our new and improved design, are performing better than their original business case, whilst industry wide construction cost inflation has generally added to our owned hotel project costs. On aggregate these projects are still expected to deliver an unlevered Return on Capital Employed (ROCE) of 12-13%.
Together with leased hotel projects, considered on a limited and specific basis where the acquisition of a suitable freehold site is not currently available or does not meet our investment return targets, and our new franchised hotels, which are delivering more fees than initially anticipated, we expect to deliver a 15% unlevered blended ROCE at a Group level.
We have 921 owned rooms under development and following the successful GBP38m (gross) equity placing in October 2016, and the GBP12m refinancing of an existing bank facility, the Group's asset backed balance sheet remains strong but with our current development pipeline we are only able to finance one further owned hotel. We continue to see a good number of attractive potential development opportunities to further accelerate the Group's growth. Consequently, the Board is considering its financing options, which may include new equity and debt, to fund these opportunities.
Development of franchised hotels
There are 1,798 franchised rooms currently under development. The 101-room hotel in Lisbon, 100-room hotel in Bernkastel-Kues, 81-room hotel in Belfast, 87-room hotel in The Hague-Scheveningen, 75-room hotel in Maastricht and the 54-room hotel in Reading, will all open in 2018. We also announced the development of hotels in Bur Dubai (300 rooms), Istanbul (300 rooms), Iran (500 rooms) and Sri Lanka (200 rooms), beyond 2018. These hotel openings will enhance our position as the super budget hotel brand of scale, in the UK, Europe and the Middle East.
Pipeline
In addition to the 2,719 owned and franchised rooms we currently have under development, we have extended our pipeline during the year, with over 2,300 owned and leased rooms under negotiation, including c.1,000 owned and leased rooms approved by the Board, as well as a further c.1,300 franchised rooms under negotiation. This confirms our strategic analysis that there is the potential in the UK and Europe for a total of 12,000 owned and leased rooms and for a total 15,000 franchised rooms. The potential for franchised development outside the UK and Europe is yet to be fully assessed, however recent franchised activity and enquiries in the Middle East, Africa and Asia have indicated that there is strong demand for the easyHotel brand outside Europe.
Capability review
It is essential that we continue to build the capability of the business, ensuring we have the right platform in place to support our ambitious growth plans.
Organisation and Culture
To grow as a business and succeed on all fronts we continue to enhance our organisation and culture. We fully recognise and endorse the need for dynamic leadership with clear executive accountability and a relentless customer focus. Having appointed a new senior team last year, to ensure that we have the right breadth of talent in place to deliver our growth plans going forward, our focus this year has been on ensuring that all our team members feel valued, recognised and have the opportunity and support to reach their full potential.
With such an exciting future, it is perhaps not surprising that our staff engagement score was 82% during the year. At the year end the Group employed 50 staff (2016: 45).
Brand strength
easyHotel's core strength is our ability to leverage the recognised and trusted "easy" brand. We know that improving customer recommendation is a priority for our future success and finding out what our customers think is central to our business. Our operations teams focus on customer feedback via social media sites in general, and TripAdvisor in particular, and our hotels are ranked against a competitive set on a monthly basis. The Group TripAdvisor score to year end was 3.5 (2016: 3.3). This relentless focus on customer feedback is already paying off and will remain an integral part of the way we do things in the future.
Technology
Although we are now selling a controlled number of rooms via OTAs, we remain focused on driving sales via our own website. Our new booking engine will allow us to launch a new website, mobile App and introduce automated check-in kiosks, to improve every stage of the customer journey online and at our hotels. Our marketing campaigns will be further refined to maximise the traffic to our website and improve the return on our marketing investment. With a new revenue management system in place, we will be in an excellent position to make further improvements to our customers' web journey, as well as introduce a more dynamic pricing strategy to further drive RevPAR growth. By offering our customers a good night's sleep at a super price and a quick and easy way to make a booking, we believe that we will attract new customers and encourage significant repeat visits.
Our values
At easyHotel we believe that it's not just what we do, but how we do it. We believe in providing our teams an opportunity to build a great career, in providing our customers with a truly super budget stay and giving our shareholders a great return on their investment.
I want to take this opportunity to thank every employee across the Group and our business partners for making easyHotel as good as it is. I'm confident that, together, we can continue to deliver on our strategic objectives in the months and years ahead.
Chief Financial Officer's review
Revenue
Total revenue increased by 39.7% to GBP8.42m (2016: GBP6.02m) driven the strong performance of our owned hotels which significantly outperformed the market and the opening of new owned and franchised hotels during the period.
Total revenue from our owned hotels was up by 39.7% to GBP6.60m (2016: GBP4.73m). Like-for-like revenue growth was 13.7%. In our owned estate average occupancy was 86.7% (2016: 82.1%) and average daily rate (ADR) per room was GBP41.9 (2016: GBP40.0). Revenue from our franchised hotels was up by 39.8% to GBP1.81m (2016: GBP1.30m), including a one-off exit fee of GBP0.15m relating to the Earls Court franchisee. Like-for-like growth in franchised hotels revenue was 8.6%. Average occupancy was 77.7% (2016: 74.5%) and ADR per room was GBP49.4 (2016: GBP42.6) in our franchised estate.
Adjusted EBITDA
Adjusted EBITDA (before one-off items) increased by 48.3% to GBP2.30m (2016: GBP1.55m). Our owned and franchised businesses contributed an improvement of GBP1.07m to GBP4.28m (2016: GBP3.21m), partly offset by our corporate office expenses increasing by GBP0.32m to GBP1.98m (2016: GBP1.66m) on the back of continued investment in our team to deliver our ambitious growth plans.
Profit before tax
Profit before tax (PBT) decreased by 21.1% to GBP0.86m (2016: GBP1.09m). Despite the increase in adjusted EBITDA, the decrease in profit before tax was mainly driven by a GBP0.24m loss related to writing down the net book value of the of the 3(rd) and 4(th) floors of our Old Street hotel following their previously announced closure (2016: GBPNil) and no capital gain this year, contrary to the capital gain on the Liverpool ground floor disposal in 2016 for GBP0.28m.
Other factors driving PBT include:
Pre-opening costs increased to GBP0.22m (2016: GBP0.09m) in the year, following an increase in new hotel openings. Depreciation and amortisation also increased to GBP0.83m (2016: GBP0.45m), following the opening of our owned hotels and IT investments made.
Share based payments expense of GBP0.17m (2016: GBP0.16m) was recorded during the year.
Other non-recurring net costs incurred in the year (as set out in note 4 to the financial statements below) amounted to GBP0.16m (2016: GBP0.10m).
Finance income was GBP0.27m (2016: GBP0.25m) including interest on cash deposits and foreign exchange gains and a finance expense of GBP0.09m (2016: GBP0.20m) related to interest on borrowings incurred during the year, net of borrowing costs attributable to the construction of new owned hotels capitalised as required by IAS 23.
Taxation
The effective tax charge for the period was 25% (2016: 20%).
Earnings per share and dividend
The profit for the year was GBP0.64m (2016: GBP0.88m), with the impact of our enlarged share base giving rise to basic earnings per share of 0.7p (2016: 1.4p).
The Board is proposing a final dividend of 0.22p per ordinary share, or a total dividend for the financial year of 0.33p (2016: 0.33p) including the interim dividend of 0.11p (2016: 0.11p) paid on 30 June 2017.
Cash flow and balance sheet
Net cash generated from operations was GBP2.22m (2016: GBP0.85m).
Net cash used in investing activities was GBP23.13m (2016: GBP9.65m), reflecting the costs incurred during the year of our owned hotel and IT development projects.
Net cash generated from financing activities was GBP40.57m (2016: GBP0.27m use), primarily relating to the completion in October 2016 of a GBP38.0m placing (GBP36.6m after expenses) plus the refinancing of our existing GBP7.2m bank facility with a new GBP12.0m facility in November 2016 and the arrangement of a EUR8.25m mortgage facility to finance the construction of our first owned hotel in Spain in January 2017.
As at 30 September 2017, total bank borrowings were GBP12.03m (2016: GBP7.20m).
The Group ended the financial year with net assets of GBP70.18m (2016: GBP33.21m), of which GBP33.26m comprised cash and cash equivalents (2016: GBP13.66m).
The Group accounts for its assets using the historical cost method, however, if our hotel portfolio was valued on the open market, the Board expects the corresponding value of this portfolio to be materially above its current net book value, underpinning the strength of the Group's balance sheet.
1,125,000 ordinary shares in the Company were held by the Employee Benefit Trust (2016: 1,125,000).
Post-balance sheet events
On 30 October 2017, the Group announced the acquisition of a site in Cardiff to develop a new 120-room freehold easyHotel, subject to planning permission. On 15 November 2017, the Group announced the takeover of a 25-year lease of the 104-room Tune hotel in Newcastle, opening as an easyHotel in December 2017. On 16 November 2017, the Group announced a further 162 franchised rooms (two hotels) under development in The Hague and Maastricht, to open in the second half of 2018.
Consolidated statement of comprehensive income
for the year ended 30 September 2017
2017 2016
Note GBP GBP
-------------
System sales* 29,672,176 21,315,210
----- ------------ -------------
Revenue 3 8,416,257 6,024,255
Cost of sales (3,257,780) (2,150,528)
---------------------------------------------------------------------------------- ----- ------------ -------------
Gross profit 5,518,477 3,873,727
Administrative expenses (4,477,957) (2,832,382)
---------------------------------------------------------------------------------- ----- ------------ -------------
Operating profit 4 680,520 1,041,345
------------ -------------
Analysed as:
Adjusted EBITDA** 2,300,283 1,551,092
Non-recurring items 4 (398,464) 187,105
Hotel pre-opening and development costs 4 (217,934) (89,157)
Depreciation and amortisation (831,414) (446,518)
Share based payments (171,951) (161,177)
---------------------------------------------------------------------------------- ----- -------------
680,520 1,041,345
---------------------------------------------------------------------------------- ----- ------------ -------------
Finance income 6 270,992 248,934
Finance expense 7 (91,193) (200,078)
-------------
Profit before taxation 860,319 1,090,201
Taxation (217,458) (213,429)
---------------------------------------------------------------------------------- ----- ------------ -------------
Profit for the year attributable to equity holders of the Company 642,861 876,772
---------------------------------------------------------------------------------- ----- ------------ -------------
Other comprehensive income
Items that will or may be reclassified to profit or loss
Exchange loss arising on retranslation of foreign operations (78,958) -
Total comprehensive income attributable to equity holders of the Company 563,903 876,772 Earnings per share for profit attributable to the ordinary equity holders of the Company Basic (pence) 8 0.7 1.4 ---------------------------------------------------------------------------------- ----- ------------ ------------- Diluted (pence) 8 0.7 1.4 ---------------------------------------------------------------------------------- ----- ------------ -------------
*System sales is a non-statutory measure and represents the full amount that the customer pays for our owned and operated hotels, as well as fees in respect of franchisee-owned and operated hotels (excluding VAT and similar taxes).
It also includes initial sign-on fees paid by franchisees to the Company.
**Adjusted EBITDA is a non-statutory measure that represents earnings before interest, taxation, depreciation and amortisation adjusted for pre-opening costs related to the development of hotels, organisational restructuring costs, share based payments and other non-recurring items (see note 4 for details).
Consolidated statement of financial position
for the year ended 30 September 2017
2017 2017 2016 2016
GBP GBP GBP GBP
---------------------------------------------- ------------- ------------ ------------- ------------
Assets
Non-current assets
Property, plant and equipment 51,141,920 30,463,074
Intangible assets 1,014,325 149,433
Long-term deposits 636,434 -
Total non-current assets 52,792,679 30,612,507
---------------------------------------------- ------------- ------------ ------------- ------------
Current assets
Trade and other receivables 2,723,821 1,243,243
Cash and cash equivalents 33,255,253 13,659,018
Total current assets 35,979,074 14,902,261
------------- ------------ ------------- ------------
Total assets 88,771,753 45,514,768
---------------------------------------------- ------------- ------------ ------------- ------------
Liabilities
Non-current liabilities
Trade and other payables 376,928 85,679
Bank borrowings 11,666,089 -
Deferred tax liability 351,488 193,792
Total non-current liabilities 12,394,505 279,471
---------------------------------------------- ------------- ------------ ------------- ------------
Current liabilities
Trade and other payables 5,804,807 4,706,215
Bank borrowings 360,000 7,200,000
Corporate taxation 31,003 119,314
Total current liabilities 6,195,810 12,025,529
---------------------------------------------- ------------- ------------ ------------- ------------
Total liabilities 18,590,315 12,305,000
---------------------------------------------- ------------- ------------ ------------- ------------
Total net assets 70,181,438 33,209,768
---------------------------------------------- ------------- ------------ ------------- ------------
Equity
Equity attributable to owners of the Company
Share capital 1,005,000 625,000
Share premium 64,775,791 28,592,036
Merger reserve 2,750,001 2,750,001
Employee Benefits Trust (EBT) reserve (1,067,405) (1,067,405)
Currency translation reserve (78,958) -
Retained earnings 2,797,009 2,310,136
---------------------------------------------- ------------ ------------- ------------
Total equity 70,181,438 33,209,768
---------------------------------------------- ------------- ------------ ------------- ------------
Consolidated statement of cash flows
for the year ended 30 September 2017
2017 2016
GBP GBP
--------------------------------------------- ------------- -------------
Cash flows from operating activities
Profit before taxation for the year 860,319 1,090,201
Adjustments for:
Profit on disposal on property, plant
and equipment 239,615 (282,675)
Depreciation and amortisation 831,414 446,518
Share based payment charge 171,951 161,177
Finance income (206,999) (248,934)
Finance expense 91,193 200,078
--------------------------------------------- ------------- -------------
Operating cash flows before movements
in working capital 1,987,493 1,366,365
(Increase)/decrease in trade and other
receivables (928,125) 48,692
Increase/(decrease) in trade and other
payables 1,449,051 (503,052)
Cash generated from operations 2,508,419 912,005
Corporation tax paid (148,667) (21,887)
Net cash flows from operating activities 2,359,752 890,118
Finance income 194,743 156,351
Finance expense (337,599) (200,078)
Net cash generated from operations 2,216,896 846,391
Investing activities
Purchase of property, plant and equipment (22,709,420) (9,227,574)
Proceeds from property, plant and equipment - 590,009
VAT on investing activities (415,660) (1,007,908)
Net cash used in investing activities (23,125,080) (9,645,473)
Financing activities
Proceeds from issue of ordinary share 38,000,000 -
capital
Capitalised costs related to issue of (1,436,245) -
ordinary share capital
Dividends paid (327,939) (270,049)
Repayment of loans (7,560,000) -
Net proceeds from new loans 11,890,176 -
Net cash generated from/(utilised by)
financing activities 40,565,992 (270,049)
Net increase/(decrease) in cash and
cash equivalents 19,657,808 (9,069,131)
Cash and cash equivalents at the beginning
of the year 13,659,018 22,635,566
Exchange (losses)/gains on cash and
cash equivalents (61,573) 92,583
Cash and cash equivalents at the end
of the year 33,255,253 13,659,018
--------------------------------------------- ------------- -------------
Consolidated statement of changes in equity
for the year ended 30 September 2016
Currency
Share Share Merger EBT translation Retained
capital premium reserve reserve Reserve earnings Total
GBP GBP GBP GBP GBP GBP GBP
At September
2015 625,000 28,592,036 2,750,001 (1,067,405) - 1,542,236 32,441,868
Total
comprehensive
income for
the year - - - - - 876,772 876,772
Share based
payment
charge - - - - - 161,177 161,177
Dividends paid - - - - - (270,049) (270,049)
--------------- ------------- ------------- ------------- ------------- ------------ ------------- ------------
At 30
September
2016 625,000 28,592,036 2,750,001 (1,067,405) - 2,310,136 33,209,768
Profit for the
year - - - - - 642,861 642,861
Other
comprehensive
income - - - - (78,958) - (78,958)
Total
comprehensive
income for
the year - - - - (78,958) 642,861 563,903 Share based payment charge - - - - - 171,951 171,951 Dividends paid - - - - - (327,939) (327,939) Issue of shares 380,000 36,183,755 - - - - 36,563,755 --------------- ------------- ------------- ------------- ------------- ------------ ------------- ------------ At 30 September 2017 1,005,000 64,775,791 2,750,001 (1,067,405) (78,958) 2,797,009 70,181,438 --------------- ------------- ------------- ------------- ------------- ------------ ------------- ------------
Additional notes
1. General Information
easyHotel Plc is incorporated in England and Wales under the Companies Act. The address of the registered office is 80 Old Street, London, EC1V 9AZ.
The nature of the Group's operations and its principal activities are the owner, developer, operator and franchisor of "super budget" "easyHotel" branded hotels.
2. Basis of preparation
The financial information presented in this preliminary announcement has been prepared in accordance with the recognition and measurement requirements of International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and as adopted by the EU and those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The principal accounting policies adopted in the preparation of the financial information in this preliminary announcement are unchanged from those used in the company's financial statements for the year ended 30 September 2016 and are consistent with those that the company has applied in its financial statements for the year ended 30 September 2017.
The financial information does not constitute the company's statutory accounts, within the meaning of Section 435 of the Companies Act 2006, for the years ended 30 September 2017 or 30 September 2016 but is derived from those accounts. The auditors have reported on those accounts; their reports were unqualified, did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their reports and did not contain statements under the Companies Act 2006, s498(2) or (3).
Statutory accounts for 2016 have been delivered to the Registrar of Companies and those for 2017, prepared under IFRS, will be delivered in due course.
3. Revenue
2017 2016
GBP GBP
Revenue arises from:
Owned hotel revenue 6,489,245 4,715,845
Franchisees hotel revenue* 1,812,159 1,296,104
Other owned income 114,853 12,306
8,416,257 6,024,255
---------------------------- ----------- ----------
* Includes a franchise agreement termination fee of GBP150,000 (2016: GBPNil) and an accelerated fee release of GBPNil (2016: GBP49,130).
4. Operating profit and adjusted EBITDA
2017 2016
GBP GBP
------------------------------------------- ---------- ----------
The following have been included in
arriving at operating profit before
tax:
Auditors' remuneration includes:
Company audit fees (15,000) (15,000)
Subsidiary audit fees (34,500) (29,500)
Fees for audit related assurance services (20,000) (20,000)
Total auditors' remuneration (69,500) (64,500)
------------------------------------------- ---------- ----------
2017 2016
GBP GBP
Non-recurring items from reportable
segments include:
Net accelerated initial fee release - 29,630
---------------------------------------- -------------------- ----------
Other non-recurring items include:
Net franchise termination proceeds 133,060 -
Recruitment fees (51,000) -
Legal and other costs (167,414) (44,041)
Abortive fees (63,627) (6,109)
Systems restructuring (9,868) (75,050)
(Loss)/profit on disposal of property,
plant and equipment (239,615) 282,675
---------------------------------------- -------------------- ----------
(398,464) 157,475
Total non-recurring income/(costs) (398,464) 187,105
---------------------------------------- -------------------- ----------
* (Loss)/profit on disposal of property, plant and equipment relates to the part-closure of operations at the Old Street hotel following an adverse planning result (2016: sale of the ground floor unit in the Liverpool property).
2017 2016
GBP GBP
Hotel pre-opening and development:
Rental income - 12,306
Pre-opening operational costs (217,934) (101,463)
Total hotel pre-opening and development
costs (217,934) (89,157)
----------------------------------------- ----------- -----------
Hotel pre-opening and development costs relate to expenses incurred or income received in running a property prior to commencement of trading as a hotel or otherwise.
Adjusted EBITDA, which is a non-statutory measure, is shown on the face of the consolidated statement of comprehensive income as it reflects the profits from underlying operations only and is the best indicator of easyHotel's financial performance.
5.Segment information
The Group has two main reportable segments:
-- Owned properties - This division is involved in hotel operations
carried out in the Group's owned hotels and properties.
-- Franchising - This division involves the Group's franchised hotel
operations, in connection with the licence of the Group's brand
name.
Factors that management used to identify the Group's reportable segments
These segments are considered on the basis of different products and services. They are managed separately because each business requires different management strategies and pose different business risks.
Measurement of operating segment profit or loss, assets and liabilities
The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies.
The Group evaluates performance on the basis of adjusted EBITDA, which is a non-statutory measure.
Segment assets exclude tax assets. Segment liabilities exclude tax liabilities. Even though loans and borrowings arise from finance activities rather than operating activities, they are allocated to the segments based on relevant factors (e.g. funding requirements). Details are provided in the reconciliation from segment assets and liabilities to the Group position.
Owned properties Franchising Total
GBP GBP GBP
-------------------------- ----------------- ------------- --------------
30 September 2017
Revenue
Total revenue from
external customers 6,604,098 1,812,159 8,416,257
Adjusted EBITDA 3,239,960 1,042,417 4,282,377
Profit before taxation 2,632,860 1,042,417 3,675,277
Segment assets 85,213,653 2,608,410 87,822,063
Segment liabilities (15,048,156) (2,335,555) (17,383,711)
-------------------------- ----------------- ------------- --------------
Other
Additions to non-current
assets 22,582,910 - 22,582,910
Disposals of non-current
assets (239,615) - (239,615)
Finance income 206,999 - 206,999
Finance cost (91,193) - (91,193)
Depreciation and
amortisation (831,414) - (831,414)
30 September 2016
Revenue
Total revenue from
external customers 4,728,151 1,296,104 6,024,255
Adjusted EBITDA 2,570,677 636,385 3,207,062
Profit before taxation 2,014,925 666,015 2,680,940
Segment assets 43,013,707 2,174,506 45,188,213
Segment liabilities (9,303,902) (2,174,506) (11,478,408)
-------------------------- ----------------- ------------- --------------
Other
Additions to non-current
assets 10,237,533 - 10,237,533
Disposal of non-current
assets (307,334) - (307,334)
Finance income 59,341 - 59,341
Finance cost (200,078) - (200,078)
Depreciation and
amortisation (415,015) - (415,015)
-------------------------- ----------------- ------------- --------------
Reconciliation of reportable segment revenues, profit before tax, assets and liabilities to the Group's corresponding amounts is shown below:
2017 2016
GBP GBP
----------------------------------------- -------------- --------------
Adjusted EBITDA of reportable segments 4,282,377 3,207,062
Adjusted EBITDA of corporate office (1,982,094) (1,655,970)
----------------------------------------- -------------- --------------
Total adjusted EBITDA 2,300,283 1,551,092
----------------------------------------- -------------- --------------
Profit before income tax
Total profit of reportable segments 3,675,277 2,680,940
Corporate office expenses and interest (2,026,609) (1,497,880)
Other non-recurring net costs (see
note 4) (158,849) (125,200)
Hotel pre-opening and development
costs (217,934) (89,157)
Share based payments (171,951) (161,177)
Disposal of non-current assets (239,615) 282,675
Profit before tax per statement
of comprehensive income 860,319 1,090,201
----------------------------------------- -------------- --------------
Assets
Total assets for reportable segments 87,822,063 45,188,213
Cash in Employee Benefit Trust 1,643 1,693
Corporate office assets 948,047 324,862
----------------------------------------- -------------- --------------
Total assets per Statement of Financial
Position 88,771,753 45,514,768
----------------------------------------- -------------- --------------
Liabilities
Total liabilities for reportable
segments (17,383,711) (11,478,408)
Corporation tax (31,003) (119,314)
Corporate office liabilities (824,113) (513,486)
Deferred tax liabilities (351,488) (193,792)
----------------------------------------- -------------- --------------
Total liabilities per Statement
of Financial Position (18,590,315) (12,305,000)
----------------------------------------- -------------- --------------
Geographical information
2017 2016
GBP GBP
---------------------------------------- ------------ -----------
Revenue by location
United Kingdom 7,209,316 5,144,034
Europe 1,073,830 774,413
Rest of the world 133,111 105,808
---------------------------------------- ------------ -----------
8,416,257 6,024,255
---------------------------------------- ------------ -----------
Total non-current assets by location
United Kingdom 44,828,465 29,112,878
Spain 7,964,214 1,499,629
---------------------------------------- ------------ -----------
52,792,679 30,612,507
---------------------------------------- ------------ -----------
6. Finance income
Recognised in profit or loss:
2017 2016
GBP GBP
Finance income
Interest income on financial assets
measured at amortised cost 206,999 59,341
Foreign exchange gain 63,993 189,593
Total interest payable and similar
charges 270,992 248,934
------------------------------------- --------- --------
7. Finance expense
Recognised in profit or loss:
2017 2016
GBP GBP
Finance expense
Interest expense on financial liabilities
measured at amortised cost 356,165 200,078
Amount capitalised* (264,972) -
Total interest payable and similar
charges 91,193 200,078
------------------------------------------- ----------- ---------
*Interest expense attributable to construction works has been capitalised to property, plant and equipment.
8. Earnings per share
2017 2016
number number
Weighted average number of ordinary shares
in issue, excluding this held by the Employee
Benefit Trust, used as the denominator
in calculating basic earnings per share 97,709,247 61,375,000
Options granted under the Employee Share
Save Plan 120,747 -
------------------------------------------------ ------------ -----------
Weighted average number of ordinary share
and potential ordinary shares used as the
denominator in calculating diluted earnings
per share 97,829,994 61,375,000
------------------------------------------------ ------------ -----------
Options granted to executives under the company's Performance Share Plan are not included in the calculation of diluted earnings per share as the performance conditions attached to the have not yet been met.
Earnings consist of profit for the period attributable to the shareholders amounting to GBP642,861 (2016: GBP876,772).
9. Dividends
Interim cash dividend of 0.11p per ordinary share (GBP109,313) was paid by the Group during the period under review (2016: GBP67,512).
Final cash dividend of 0.22p per ordinary share (GBP218,625) is proposed by the Group during the period under review (2016: GBP218,625).
10. Contingencies and commitments
There are no contingencies or commitments of a material nature at the date of approval of these financial statements that the Directors believe are necessary to draw attention to.
11. Events after the reporting date
On 30 October 2017, the Group announced the acquisition of a site in Cardiff to develop a new 120-room freehold easyHotel, subject to planning permission. On 15 November 2017, the Group announced the takeover of a 25-year lease of the 104-room Tune hotel in Newcastle, opening as an
easyHotel in December 2017. On 16 November 2017, the Group announced a further 162 franchised rooms (two hotels) under development in The Hague and Maastricht, to open in the second half of 2018.
There are no other matters that occurred between the reporting date and the date of approval of these financial statements that the Directors believe are necessary to draw attention to.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR BCBDDUGGBGRU
(END) Dow Jones Newswires
December 06, 2017 02:00 ET (07:00 GMT)
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