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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 May 2019 to May 2024
TIDMEZH
RNS Number : 8055A
easyHotel PLC
24 January 2020
24 January 2020
easyHotel plc
("easyHotel", "the Group" or "the Company")
FINAL RESULTS FOR THE YEARED 30 SEPTEMBER 2019
easyHotel, the owner, developer and operator of super budget branded hotels, today announces its final results for the financial year ended 30 September 2019.
Financial highlights
Hot Features
Premium
Year ended 30 September (GBPm) 2019 2018
Total system sales 47.6 37.3
------- -----
Revenue 17.6 11.3
------- -----
Adjusted EBITDA 4.20 2.96
------- -----
Profit/(loss) before tax (3.57) 0.87
------- -----
Basic earnings / (loss) per
share (pence) (2.7) 0.5
------- -----
Total dividend per share (pence) 0.08 0.22
------- -----
* Adjusted EBITDA growth of 42.1% reflects the strength
of our super budget proposition and continuing market
outperformance in a challenging market environment.
* Adjusted EBITDAR margin decreased by 1.9%pts to 27.7%
(2018: 29.6%) mainly reflecting increased use of OTA
to drive revenue and brand growth and also investment
in central resources to support our future growth
ambitions.
* Loss before tax of GBP3.57m (2018: profit of
GBP0.87m) includes a GBP3.0m non-cash impairment to
our Ipswich hotel, and GBP1.4m costs associated with
the change in ownership structure in the latter part
of the year.
* Cash generated from operations increased to GBP3.25m
(2018: GBP2.86m).
* Gross bank debt of GBP17.6m (2018: GBP16.5m) and cash
and cash equivalents of GBP11.7m (2018: GBP41.4m).
* Asset backed balance sheet with net assets of
GBP115.3m (2018: GBP119.6m).
* The board has not recommended payment of a final
dividend in order to focus investment on growing the
Group's estate.
Business highlights
* Like-for-like owned hotels RevPAR(1) was up 4.6%
delivering market outperformance for the fourth
consecutive year.
* Like-for-like franchised hotels RevPAR was down 1.7%,
but with an improved performance during the second
half of the year (H1 decline of 3.5%).
* Six new owned and franchised hotels opened during the
year(2) , totalling 607 rooms, which are trading
broadly in line with management's expectations.
* Our first owned hotel development site secured in
Paris with a second site, easyHotel Nice, acquired
and opened post financial year-end.
* 2,006 rooms are currently in the development pipeline,
including an owned hotel investment pipeline of some
GBP40m.
* Significant investment in the digital and operating
platforms to support brand and business growth.
* Recommended cash offer by Citrus UK Bidco Limited who
now hold 69% of the Company's issued share capital.
* It is intended to market the office space at Old
Street for sale (inviting offers in excess of GBP15m)
to realise best value for shareholders from this
non-strategic asset.
* With the support of its major new and existing
shareholders, the board believes the Company will be
able to achieve its strategic vision for the business
more quickly and effectively.
* Longer term funding of debt and equity to be used to
meet accelerated European development plans.
(1) RevPAR refers to Revenue Per Available Room
(2) Six new hotel openings were: Lisbon (Oct'18), Bernkastel-Kues (Jan'19), Ipswich (Jan'19),
Milton Keynes (Jun'19), Amsterdam Schiphol (Jul'19) and Zurich (Sept'19)
Commenting, Scott Christie, Interim Chief Executive Officer at easyHotel, said:
"easyHotel has demonstrated the strength and resilience of its super-budget model, continuing to outperform a challenging market on a like-for-like basis over the course of the year. The Group has made good progress against its strategy for growth, with six new owned and franchised hotel openings and the successful reopening of our flagship hotel in Old Street, London, following refurbishment.
"Looking to the year ahead, whilst the uncertain political and economic landscape will continue to impact consumer sentiment, we remain confident that the easyHotel brand will continue to outperform the sector as consumers seek out the best value for money.
"We are excited by the development pipeline and the potential for the brand in Europe. With strong supportive shareholders behind us, the significant investments we have made in the business will ensure we have the resources to continue to expand and enhance the business and deliver the board's ambitious strategy for targeted growth."
Enquiries:
easyHotel plc Scott Christie, Interim Chief www.easyhotel.com Executive Officer Harm Meijer, Non-executive Chairman http://ir.easyhotel.com Investec (Nominated Adviser and Broker) +44 (0) 20 7597 5970 David Anderson Houston (Financial PR) +44 (0) 20 3701 7660 Kate Hoare / Laura Stewart
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 has an estate of 40 hotels with 3,759 rooms, comprising 27 franchised hotels (2,332 rooms) and 13 owned hotels (1,427 rooms).
Owned hotels:
United Kingdom: Old Street (London), Glasgow, Croydon, Birmingham, Manchester, Liverpool, Newcastle*, Leeds, Sheffield, Ipswich, Milton Keynes.
Spain: Barcelona
France: Nice
Franchise locations:
United Kingdom: Edinburgh, London Heathrow, Central London, Luton, Reading and Belfast.
Europe: Belgium (Brussels), Bulgaria (Sofia), Germany (Berlin, Frankfurt, Bernkastel-Kues), Hungary (Budapest), The Netherlands (Amsterdam: City, Arena & Zaandam, Amsterdam Schiphol Airport, Rotterdam, The Hague, The Hague Scheveningen Beach, Maastricht), Portugal (Lisbon), Switzerland (Basel, Zurich).
International: UAE (Dubai).
Hotel development pipeline
The Company's committed development pipeline of owned and franchised hotels currently consists of:
Owned hotels:
United Kingdom: Cardiff, Oxford*, Blackpool, Cambridge* and Bristol(#) .
Europe: Ireland (Dublin), France (Paris-Charles de Gaulle Airport*).
Franchise hotels:
Europe: Spain (Malaga), Switzerland (Zurich, Basel).
*Hotels under an operating lease.
(#) Subject to planning permission.
Chief Executive Officer's review
Given the political and economic uncertainty faced by the UK during the year under review and its impact on consumer confidence, I am pleased that the Group's owned hotels have continued to outperform the market on a like-for-like basis, reflecting the strength and positioning of our super budget model. In particular, since its re-opening in June 2019, the refurbished 89-room easyHotel Old Street has performed strongly, demonstrating that a stylish, new-format easyHotel in an attractive key city location can provide a compelling offering for our customers.
easyHotel has continued to make good progress in its strategy for growth. Six new owned and franchised hotels were opened during the year. These included owned hotels in Ipswich and Milton Keynes and franchised hotels in Lisbon, Bernkastel-Kues, Zurich and Amsterdam Schiphol Airport.
We continue to be encouraged by the success of our owned hotel in Barcelona, which opened in September 2018 and which reinforces our focus on expansion of the owned hotel estate in mainland Europe.
STRATEGY AND BUSINESS MODEL
The growing strength of the brand's simple super budget offering is well aligned to the needs of today's discerning and value conscious traveller and the year has seen the Group make further progress as we continue to build momentum against our growth plans.
Our owned hotels outperformed the market for the fourth successive year, delivering like-for-like RevPAR up 4.6%. The Group's franchised hotels have performed less strongly, reflecting the weaker UK regional hotel market and a mixed European performance on a country-by-country basis. However, we did see some performance improvement during the second half of the financial year resulting in franchised RevPAR down 1.7% overall.
In support of the expansion of our owned and franchised portfolio of hotels, we have continued to drive improvements in our revenue management strategy to maximise sales. The year saw the start of the roll out of a new PMS system (Opera by ORACLE) with planned enhancements to build our direct revenue share. This is enabling us to improve our customer booking experience and will be supported by the investments we are making in our CRM platform and digital marketing initiatives to drive improved returns from more targeted promotional activity.
The long-term structural growth drivers in the international branded budget hotel sector remain strong and during the year we have made further expansion plans. In the UK, where the Group already has a significant established owned hotel presence and a strong pipeline to deliver further hotels, the Group intends to selectively focus future owned hotel development on primary cities only. Wider regional UK expansion plans remain important to the business but will be focussed on franchised development.
We will significantly increase our focus on Europe, where we believe the opportunity to develop our portfolio in key cities is significant. The Group's new European development team has been working hard to pursue a number of owned and franchised development opportunities in key primary tourist destinations with an initial focus on France and Spain. The success of our flagship hotel in Barcelona provides us with confidence in a strategy of expanding the easyHotel owned hotel network through investment in centrally located, high quality hotels in major European cities. The Group's balance sheet strength and cash generation underpins the funding for future owned hotel growth in these markets. Expansion across mainland Europe beyond these key locations will be achieved through an increased focus on franchised development, enabling the Group to broaden its presence without the need for direct capital investment, and our ongoing investment in the brand and our network is continuing to support the development of new franchisee partnerships.
During the year, the Company's shares were subject to a recommended cash offer by Citrus UK Bidco Limited, a company owned by a consortium comprising Cadim Fonds Inc (part of Ivanhoé Cambridge) and long-term major shareholder, ICAMAP Investments S.à.r.l. As a result of this offer, Citrus UK Bidco Limited and its concert parties now hold 68.77% of the Company's issued share capital. The board believes that, with the support of its major new and existing shareholders, the Company will be able to achieve its strategic vision for the business more quickly and effectively and deliver an exciting future for easyHotel, its employees, franchisees and guests.
TRADING REVIEW
The Group has continued to outperform its hotel markets in the UK during the period, despite a weakening trading environment, with owned like-for-like RevPAR up 4.6%.
The UK mid-scale and economy segment of the hotel market continued to be impacted by political and economic uncertainty, with RevPAR down 0.7% for the period according to STR Global. Although the London market has continued to perform strongly, with RevPAR growing by 4.5%, the regional UK market's RevPAR has remained weak, down some 2.8%, with a number of regions experiencing double digit RevPAR declines during the calendar year.
Whilst European markets continued to outperform the UK on the whole, our like-for-like franchise performance was mixed on a country-by-country basis with RevPAR down 1.7% in the period. An improving trend in like-for-like franchised RevPAR was, however, achieved during the second half of the financial year.
Against this backdrop, the Group delivered a 27.5% growth in total system sales to GBP47.6m (2018: GBP37.3m) with company revenues up 56.0% to GBP17.6m (2018: GBP11.3m).
This performance drove a 42.1% increase in adjusted EBITDA to GBP4.20m (2018: GBP2.96m). Losses before tax of GBP3.57m included a GBP3.0m non-cash impairment to the value of our Ipswich hotel which opened in January 2019 and costs of GBP1.4m incurred in relation to the offer made during the period for the Company's shares.
Hotel Openings
During the period the Group expanded its portfolio of super budget hotels across the UK and Europe.
In the UK, openings included new owned hotels in Ipswich (89 rooms) and Milton Keynes (124 rooms) and the reopening of the newly refurbished easyHotel Old Street (89 rooms). The self-contained 15,500 sq.ft. offices refurbished at Old Street were successfully leased to flexible office provider, Knotel. The Group intends to market the office space at Old Street for sale (inviting offers in excess of GBP15m) at this time whilst market conditions are favourable, to realise best value for shareholders from this asset which is not part of our core business.
Four further franchised hotels were also opened in Lisbon (101 rooms), Bernkastel-Kues (100 rooms), Zurich (39 rooms) and Amsterdam Schiphol Airport (154 rooms).
These new hotel openings added a further 607 rooms to the network, bringing the Group's total portfolio at the period end to 1,340 owned hotel rooms and 2,332 franchised hotel rooms.
Since the year-end the Group has also completed the acquisition of the 87-room Palais des Congrés in Nice, with the hotel opening for trading immediately on completion, bringing the total number of owned hotel rooms to 1,427.
DEVELOPMENT REVIEW
We believe that the opportunity to successfully develop our owned hotel portfolio in key gateway European cities is significant and by increasing both our resource and exposure to mainland Europe, we plan to focus our UK owned hotel pipeline on selected cities, whilst accelerating our presence in key continental European locations. Franchised hotels will be used to build the estate elsewhere in the UK and Europe.
The board believes there is potential for approximately 12,000 easyHotel additional owned hotel rooms and 15,000 franchised easyHotel rooms across the UK and continental Europe.
Owned Hotel Pipeline
The Group continued to expand its pipeline of owned hotels during the period. In the UK, this included a 145-bedroom easyHotel Bristol development (subject to planning permission). In Europe, the Group has secured its first two hotels in France. These are the proposed 209-room easyHotel at Paris-Charles de Gaulle Airport (for which planning permission has now been granted) and, post year-end, the 87-room Palais des Congrés in Nice which was acquired as a trading asset.
A 116 room hotel in Cardiff is also expected to open during the current financial year ending 30 September 2020 and a further 749 rooms are expected to open in the following financial year.
The Group currently has an owned hotel investment pipeline of some GBP40m comprising a total of 1,010 owned hotel rooms.
Franchised Hotel Development Pipeline
In addition to the four recently opened franchised hotels mentioned above, during the period the Group also signed new franchise agreements to develop further hotels in Derby (110 rooms) and Tel Aviv, Israel (667 rooms).
New franchised hotels are due to open in spring 2020 in Malaga (145 rooms) and in summer 2020 in Zurich (34 rooms), with further franchised hotels in Zurich, Derby and Tel Aviv scheduled for opening during the 2021 and 2022 financial years. The total number of franchised hotel rooms in the Group's development pipeline is 996.
CAPABILITY, ORGANISATION AND CULTURE
It is essential that we continue to build the capability of the business to enable it to grow at speed and to optimise the financial and operational performance of our trading assets.
Our colleagues, franchise partners, hotel guests and investors are all instrumental in achieving success in our business. easyHotel has a strong culture, with everything we do underpinned by our four simple values: We Care For You; We Make Things Simple; We're Always The Best Value For Money; and We Do What We Say. We believe in supporting our franchisees for the benefit of their business and ours, providing our teams with opportunities to build a great career, delighting our customers with a truly super budget stay and giving our shareholders a great return on their investment.
During the year, the senior management team was significantly reorganised and strengthened.
At the year end the Group employed 141 colleagues (2018: 90).
Previous Chief Financial Officer, Marc Vieilledent, who remains a key member of the easyHotel executive team, is now leading our strategically important developments in mainland Europe. He was succeeded as Chief Financial Officer in October 2018 by Gary Burton.
In addition, we have recruited experienced new senior managers to lead our revenue management and marketing teams. They bring with them significant experience and the business is already benefitting from their contributions.
TECHNOLOGY AND DIGITAL MARKETING
Our hotels benefit from our day-to-day hotel management expertise, whilst having access to some of the world's most powerful marketing, distribution and revenue management systems. During the period we invested significantly in enhancing these systems and recruited people to work in the business who can optimise the significant benefits which such systems can bring.
The roll out of our new management and booking engine, Opera (an ORACLE system), was started during the year and will be completed during the first half of the current financial year. This will enable us, in due course, to introduce features within our hotels such as automated check-in kiosks and to make further enhancements to our website and app beyond the upgrades already made during the year, including our new membership programme clubBedzzz. We are working hard to drive revenues and brand awareness through targeted marketing initiatives and improvements in every stage of our customers' experience - online and at our hotels. 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.
BOARD CHANGES
As well as the change of Chief Financial Officer early in the period as mentioned above, there have been a number of other more-recent changes to the board.
On 1 October 2019, our past independent Non-Executive Chairman, Jonathan Lane OBE, stepped down from the board. Jonathan had served on the board since the Company's IPO in 2014 and we thank him for his valuable contribution to the business. Harm Meijer was subsequently appointed Non-Executive Chairman of the board.
On 21 November 2019, it was confirmed that Chief Executive, Guy Parsons, had taken the decision to step down from the company. Guy's successor, François Bacchetta, will join the business in Spring 2020. In the meantime, and to ensure a smooth transition, I will continue in the role of Interim Chief Executive Officer. François, as easyJet's Country Director for France and Italy, has signi cant experience of operating in the European travel market and, importantly, has an excellent understanding of the 'easy' brand. He also brings experience of managing online trading including digital marketing and delivering growth strategies within the European market.
On the 21 November 2019, the board also announced the appointments to the board with immediate effect of Michael Neuman, as representative of corporate Director, Cadim Fonds Inc (part of the Ivanhoé Cambridge group), and Non-executive Director, Charles Persello.
Michael, a qualified Member of the Royal Institute of Charted Surveyors, joined Ivanhoé Cambridge in 2014 as a Director of investments, Europe and currently serves as vice president, investments, Europe. Prior to his current role, Michael had worked as a senior investment and asset manager for Unibail Rodamco. Charles, a Director at ICAMAP Advisory, has over eight years' commercial real estate experience previously working at Unibail-Rodamco, both in retail development in France and subsequently in asset management in Germany. Their wealth of European property and financial experience will be invaluable to the Company as easyHotel continues its journey to fulfil its potential as a leading European budget hotel company.
OUTLOOK
The UK hotel market has been challenging over the course of the year under review, with business confidence weak and consumer confidence impacted by political and economic uncertainties. Despite this backdrop, easyHotel's business has continued to grow and to outperform the overall market. The refurbished Old Street hotel and the new hotels we have opened are trading positively and provide confidence that our new format rooms are attractive to our guests and that, as a team, we have the skills and resources in place to select hotel developments that will produce good long-term returns for our shareholders.
Looking to the year ahead, the political and economic landscape will continue to impact consumer confidence. However, the board remains confident that the easyHotel brand will continue to outperform the sector as consumers seek out best value for money and we extend our reach beyond the UK into mainland Europe more proactively.
We are excited about the development pipeline and the potential for the brand in Europe. The Group made significant investments during the last financial year in order to ensure the organisation has the resources it needs to continue to expand and enhance the business and deliver the board's ambitious strategy for targeted growth. We are confident about the size of the opportunity available to the brand and the readiness of the business to leverage recent investments in infrastructure and in-house expertise to deliver against the board's vision. Moreover, we have strong shareholders able to support our growth strategy as we look to accelerate our European development to be funded in the longer term through debt and equity.
I want to take this opportunity to thank all of my colleagues and our many franchisees and other partners for making this business the success it is. I am confident that, together, we can continue to deliver on the clear and focussed strategic objectives we have set for ourselves.
Scott Christie
Interim Chief Executive Officer
Chief Financial Officer's review
easyHotel continues to deliver good financial performance with like-for-like owned hotel RevPAR of +4.6%, outperforming the overall UK market(3) that was down 0.7%.
Total system sales were up 27.5% to GBP47.6m, total revenue up 56.0% to GBP17.6m and total like-for-like owned hotel revenue up 1.7% to GBP7.0m.
Adjusted EBITDA was up 42.1% to GBP4.20m (2018: GBP2.96m). Cash generated from operations was up 13.7% to GBP3.3m (2018: GBP2.9m) and basic loss per share was 2.7p (2018: profit per share of 0.5p), impacted by a GBP3.0m non-cash impairment of our Ipswich hotel and GBP1.4m of exceptional costs in respect of the offer made in the latter part of the year by Citrus UK Bidco Limited for the Company's shares. If these costs are excluded, basic earnings per share would have been 0.4p (unaudited).
Trading
Total system sales were up 27.5% to GBP47.6m (2018: GBP37.3m) following the opening of six hotels (607 rooms: 394 franchised hotel rooms and 213 owned hotel rooms).
Total revenue was up 56.0% to GBP17.6m (2018: GBP11.3m). Total owned revenue was up 64.2% to GBP15.5m (2018: GBP9.4m) and total franchise revenue up 8.6% to GBP1.96m (2018: GBP1.8m).
Owned hotel like-for-like RevPAR was up 4.6% driven by higher Average Daily Rates (ADRs) from hotels maturing and an increased focus on optimising RevPAR.
Total owned hotel revenue growth was supported by 12 months of trading in Barcelona, Sheffield and Leeds, continued market outperformance of like-for-like owned hotels and new hotel openings in Ipswich and Milton Keynes. Offsetting this, revenue was negatively impacted by the temporary closure of Old Street, which underwent a major refurbishment from December 2018 until June 2019(4) .
Franchise like-for-like RevPAR was down 1.7% with an improved performance during the second half of the period and reducing a first half performance that was down 3.5%.
Total average occupancy across all hotels was 77.7% (2018: 82.4%) with an ADR of GBP50.20 (2018: GBP50.49). ADR improved generally in owned hotels but was lower overall as a result of a dilution impact caused by the temporary closure of Old Street and addition of new hotels in regional towns (Ipswich and Milton Keynes), although benefitting from a full 12 months trading of Barcelona that performed very strongly throughout the period.
Adjusted EBITDA
Adjusted EBITDA (before exceptional items and share based payments) increased by 42.1% to GBP4.20m (2018: GBP2.96m) with adjusted EBITDAR(5) margin of 27.7% that decreased by 1.9%pts (2018: 29.6%).
An increase in the use of online-travel-agents (OTAs) in the period supported the continued delivery of like-for-like revenue outperformance in challenging market conditions but impacted EBITDAR margin percentages.
Central costs reduced as a proportion of revenue but increased by GBP1.0m in absolute terms. This was driven by an investment in management (that included establishing a European development team), rent from the relocated head office (previously within the Old Street hotel property) and higher professional fees supporting the growing estate and expansion into Europe.
(3) Market source: Midscale & Economy (MSE) segment from the UK Performance Monitor report, produced by STR Global
(4) Old Street reopened with a 15,500 sq ft self-contained office and an 89 room hotel
(5) Adjusted EBITDAR margin is adjusted EBITDA as previously disclosed excluding rent expense
Profit before tax
A loss before tax of GBP3.57m (2018: profit of GBP0.87m) was driven by a GBP3.0m non-cash impairment of our Ipswich hotel, as a result of significant cost overruns. Other adjusting items of GBP1.75m included GBP1.43m of expenses resulting from the change in capital arising from the offer made for the Company's shares.
Depreciation and amortisation (excluding the GBP3.0m impairment) increased 88.5% to GBP2.8m (2018: GBP1.5m), in line with the increase in the number of owned hotels (also including a full year of depreciation charge for Old Street, that was temporarily closed for 6 months).
Total pre-opening costs were slightly lower, as compared with the prior year, with more hotel openings in the year benefiting from a lower average cost of opening.
Share based payments reported a net credit in the year of GBP0.11m (2018: charge of GBP0.28m). The change of control as a result of the offer triggered vesting and exercise of share options and employees share plans.
Taxation
The effective tax rate for the period, excluding the GBP1.4m of exceptional expenses associated with the offer and the GBP3.0m impairment of our Ipswich hotel, was 19% (2018: 26%), benefitting from the finalisation of capital allowance claims in respect of earlier periods.
Earnings per share and dividend
The loss for the year was GBP3.78m (2018: profit of GBP0.65m), with basic loss per share of 2.7p (2018: profit 0.5p). The board has not recommended payment of a final dividend in order to focus investment of the Group's available resources on growing the hotel estate. An interim dividend of 0.08p (2018: 0.07p) was paid on 28 June 2019.
Cash flow and Balance Sheet
Net cash flows from operating activities was GBP3.1m (2018: GBP2.8m). Total cash and cash equivalents on 30 September 2019 were GBP11.7m (2018: GBP41.4m).
Net cash used in investment activities was GBP33.2m (2018: GBP47.4m). Net cash generated from financing activities was GBP0.5m (2018: GBP52.7m including cash generated by the placing of new ordinary shares in March 2018).
The Group ended the financial year with net assets of GBP115.3m (2018: GBP119.6m), of which GBP11.7m comprised cash and cash equivalents (2018: GBP41.4m). At year end, total bank borrowings were GBP17.6m (2018: GBP16.5m) and 369,724 ordinary shares in the Company were held by the Employee Benefit Trust (2018: 1,125,000).
Gary Burton
Chief Financial Officer
Consolidated statement of comprehensive income
for the year ended 30 September 2019
2019 2018
--- -------------------------------------------- -----
Note GBP GBP
--- -------------------------------------------- ----- ---------------------------- --------------------------
System sales(1) 47,649,199 37,313,925
------------------------------------------------ ----- ---------------------------- --------------------------
Revenue 3 17,555,596 11,253,872
Cost of sales (9,117,015) (5,231,963)
------------------------------------------------ ----- ---------------------------- --------------------------
Gross profit 8,438,581 6,021,909
Administrative expenses (11,885,171) (5,337,832)
------------------------------------------------ ----- ---------------------------- --------------------------
Operating profit (3,416,590) 684,077
------------------------------------------------ ----- ---------------------------- --------------------------
Analysed as:
Adjusted EBITDA(2) 4,204,157 2,958,733
Depreciation, impairment and amortisation (5,794,421) (1,502,313)
Hotel pre-opening and development
costs 4 (182,355) (246,971)
Share based payments 108,599 (276,565)
Other adjusting items 4 (1,752,570) (248,807)
(3,416,590) 684,077
------------------------------------------------ ----- ----------------------------
Finance income 6 261,712 304,893
Finance expense 7 (419,227) (116,808)
------------------------------------------------ ----- ---------------------------- --------------------------
(Loss) / profit before taxation (3,574,105) 872,162
Taxation (206,075) (225,658)
------------------------------------------------ ----- ---------------------------- --------------------------
(Loss) / profit for the year (3,780,180) 646,504
------------------------------------------------ ----- ---------------------------- --------------------------
Exchange (loss) / gain arising
on retranslation of foreign operations (130,037) 63,323
Total comprehensive income attributable
to equity holders of the Company (3,910,217) 709,827
------------------------------------------------ ----- ---------------------------- --------------------------
Earnings per share for profit attributable
to the ordinary equity holders
of the Company
Basic (pence) 8 (2.7) 0.5
------------------------------------------------ ----- ---------------------------- --------------------------
Diluted (pence) 8 (2.7) 0.5
------------------------------------------------ ----- ---------------------------- --------------------------
1 System sales is the full amount that the customer pays for the
use of all the hotels under the easyHotel brand (owned of GBP15,499,319
(2018: GBP9,075,454) and franchised of GBP32,077,090 (2018:
GBP28,100,955) of which GBP1,983,487 was within statutory revenue
(2018: GBP2,040,902)), together with initial sign on fees of
GBP72,790 (2018: GBP137,516) paid by new franchisees.
2 Adjusted EBITDA 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 adjusting items. Adjusted
EBITDA 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.
Consolidated statement of financial position
as at 30 September 2019
Company number 09035738
2019 2019 2018 2018
-------------------------------
GBP GBP GBP GBP
------------------------------- ------------- ------------ ------------ -----------------
Assets
Non-current assets
Property, plant and
equipment 102,446,177 96,259,366
Investment properties 12,553,442 -
Intangible assets 1,109,928 1,151,131
Long-term deposits 637,610 643,080
-------------------------------- ------------- ------------ ------------ -----------------
Total non-current assets 116,747,157 98,053,577
-------------------------------- ------------- ------------ ------------ -----------------
Current assets
Trade and other receivables 12,231,341 4,022,560
Cash and cash equivalents 11,714,706 41,390,018
-------------------------------- ------------- ------------ ------------ -----------------
Total current assets 23,946,047 45,412,578
-------------------------------- ------------- ------------ ------------ -----------------
Total assets 140,693,204 143,466,155
-------------------------------- ------------- ------------ ------------ -----------------
Liabilities
Non-current liabilities
Trade and other payables 743,913 756,826
Bank borrowings 16,733,958 15,749,566
Deferred tax liability 442,696 418,349
-------------------------------- ------------- ------------ ------------ -----------------
Total non-current liabilities 17,920,567 16,924,741
-------------------------------- ------------- ------------ ------------ -----------------
Current liabilities
Trade and other payables 6,484,761 6,057,925
Bank borrowings 838,808 710,413
Corporate taxation 130,186 131,560
-------------------------------- ------------- ------------ ------------ -----------------
Total current liabilities 7,453,755 6,899,898
-------------------------------- ------------- ------------ ------------ -----------------
Total liabilities 25,374,322 23,824,639
-------------------------------- ------------- ------------ ------------ -----------------
Total net assets 115,318,882 119,641,516
-------------------------------- ------------- ------------ ------------ -----------------
Equity
Equity attributable
to owners of the Company
Share capital 1,459,545 1,459,545
Share premium 113,114,938 113,114,938
Merger reserve 2,750,001 2,750,001
Employee Benefit Trust
(EBT) reserve (1,038,115) (1,067,405)
Currency translation
reserve (145,672) (15,635)
Retained earnings (821,815) 3,400,072
-------------------------------- ------------- ------------ ------------ -------------------
Total equity 115,318,882 119,641,516
-------------------------------- ------------- ------------ ------------ -------------------
Consolidated statement of cash flows
for the year ended 30 September 2019
2019 2018
--------------------------------------------
GBP GBP
-------------------------------------------- ------------- -------------
Cash flows from operating activities
Profit before taxation for the year (3,574,105) 872,162
Adjustments for:
Depreciation, impairment and amortisation 5,794,421 1,502,313
Share based payment (credit) / charge (108,599) 276,565
Finance income (261,712) (304,893)
Finance expense 419,227 116,808
-------------------------------------------- ------------- -------------
Operating cash flows before movements
in working capital 2,269,232 2,462,955
(Increase) / decrease in trade and
other receivables (745,798) 183,560
Increase in trade and other payables 1,730,068 214,702
-------------------------------------------- ------------- -------------
Cash generated from operations 3,253,502 2,861,217
Corporation tax paid (173,662) (71,123)
-------------------------------------------- ------------- -------------
Net cash flows from operating activities 3,079,840 2,790,094
Investing activities
Purchase of property, plant and equipment (25,018,172) (46,379,646)
Purchase of intangible assets (395,438) -
Increase in trade and other receivables (8,201,809) -
VAT on investing activities 381,660 (1,017,152)
-------------------------------------------- ------------- -------------
Net cash used in investing activities (33,233,759) (47,396,798)
-------------------------------------------- ------------- -------------
Financing activities
Proceeds from issue of ordinary share
capital - 50,000,000
Exercise of share options 29,290 -
Capitalised costs related to issue
of ordinary share capital - (1,206,308)
Interest received 279,466 346,627
Interest paid (639,567) (488,050)
Dividends paid (333,108) (320,006)
Proceeds in bank loan 1,846,040 4,769,921
Repayment of bank loan (710,413) (360,000)
------------- -------------
Net cash generated from / (utilised
by) financing activities 471,708 52,742,184
-------------------------------------------- ------------- -------------
Net (decrease) / increase in cash and
cash equivalents (29,682,211) 8,135,480
Cash and cash equivalents at the beginning
of the year 41,390,018 33,255,253
Exchange gains / (losses) on cash and
cash equivalents 6,899 (715)
-------------------------------------------- ------------- -------------
Cash and cash equivalents at the end
of the year 11,714,706 41,390,018
-------------------------------------------- ------------- -------------
Consolidated statement of changes in equity
for the year ended 30
September 2019
Share Share Merger EBT Currency Retained Total
translation
--------------- -----
capital premium reserve reserve reserve earnings GBP
---------------
Note GBP GBP GBP GBP GBP
--------------- ----- ---------- -------------- ------------ -------------- ------------- -------------- --------------
At 30
September
2017 1,005,000 64,775,791 2,750,001 (1,067,405) (78,958) 2,797,009 70,181,438
Profit for
the year - - - - - 646,504 646,504
FX translation
movement - - - - 63,323 - 63,323
---------- -------------- ------------ -------------- ------------- -------------- --------------
Total
comprehensive
income for
the year - - - - 63,323 646,504 709,827
Share based
payment
charge - - - - - 276,565 276,565
Dividends
paid 9 - - - - - (320,006) (320,006)
Issue of
shares 454,545 48,339,147 - - - - 48,793,692
---------- -------------- ------------ -------------- ------------- -------------- --------------
At 30
September
2018 1,459,545 113,114,938 2,750,001 (1,067,405) (15,635) 3,400,072 119,641,516
Profit for
the year - - - - - (3,780,180) (3,780,180)
FX translation
movement - - - - (130,037) - (130,037)
---------- -------------- ------------ -------------- ------------- -------------- --------------
Total
comprehensive
income for
the year - - - - (130,037) (3,780,180) (3,910,217)
Share based
payment
charge - - - - - (108,599) (108,599)
Exercise
of share
options - - - 29,290 - - 29,290
Dividends
paid 9 - - - - - (333,108) (333,108)
--------------- ----- ---------- -------------- ------------ -------------- ------------- -------------- --------------
At 30
September
2019 1,459,545 113,114,938 2,750,001 (1,038,115) (145,672) (821,815) 115,318,882
--------------- ----- ---------- -------------- ------------ -------------- ------------- -------------- --------------
Additional Notes
1. General Information
easyHotel plc is incorporated in England and Wales under the Companies Act. The address of the registered office is 52 Grosvenor Gardens, London SW1W 0AU.
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 consistent with those that the company has applied in its
financial statements for the year ended 30 September 2019,
and are unchanged from those used in the company's financial
statements for the year ended 30 September 2018 with the exception
of the adoption of IFRS15 Revenue and IFRS9 Financial Instruments,
which have had no material impact on the figures presented.
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 2019 or
30 September 2018 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 2018 have been delivered to the Registrar
of Companies and those for 2019, prepared under IFRS, will
be delivered in due course.
.
3. Revenue
2019 2018
--------------------------
GBP GBP
-------------------------- ----------- -----------
Revenue arises from:
Owned hotel revenue 15,399,656 9,075,454
Franchised hotel revenue 1,965,213 1,810,918
Rental income 99,663 -
Other income 91,064 367,500
-------------------------- ----------- -----------
17,555,596 11,253,872
-------------------------- ----------- -----------
4. Operating profit and adjusted EBITDA(1)
2019 2018
----------------------------------------------
GBP GBP
---------------------------------------------- ---------- ----------
The following have been included in arriving
at operating profit before tax:
Depreciation and impairment of PPE 5,300,738 1,233,611
Amortisation and impairment of intangible
assets 493,684 268,702
Payments under operating leases 665,003 359,766
---------------------------------------------- ---------- ----------
2019 2018
---------------------------------------
GBP GBP
--------------------------------------- ------------ --------------------------
Other Adjusting items from reportable
segments include:
Other adjusting items include:
Recruitment fees (199,908) (124,540)
Legal and other costs (62,375) (124,213)
Abortive fees (56,698) (54)
Citrus UK Bidco bidding offer costs (1,433,589) -
Total Adjusting items (1,752,570) (248,807)
--------------------------------------- ------------ --------------------------
Hotel pre-opening and development: (2)
Pre-opening operational costs (182,355) (246,971)
------------------------------------------- ---------- ----------
Total hotel pre-opening and development
costs (182,355) (246,971)
------------------------------------------- ---------- ----------
1 Adjusted EBITDA 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.
2 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.
5. Segment information
Central Owned properties Franchising Investment Total
office
------------------------
GBP GBP GBP GBP GBP
------------------------ ------------ --------------------- ------------ ----------- ------------
30 September 2019
Profit & Loss
Total revenue from
external customers - 15,490,720 1,965,213 99,663 17,555,596
Adjusted EBITDA (4,073,008) 6,699,237 1,478,664 99,264 4,204,157
(Loss) / profit before
taxation (6,142,393) 1,071,382 1,397,685 99,221 (3,574,105)
Finance income 261,712 - - - 261,712
Finance cost (419,227) - - - (419,227)
Depreciation and
amortisation (489,024) (5,254,646) (50,708) (43) (5,794,421)
------------------------ ------------ --------------------- ------------ ----------- ------------
Balance Sheet
Segment assets 5,446,379 117,539,515 4,471,814 13,235,497 140,693,204
Segment liabilities 11,175,610 14,052,980 145,731 - 25,374,322
------------------------ ------------ --------------------- ------------ ----------- ------------
30 September 2018
Profit & Loss
Total revenue from
external customers 9,442,954 1,810,918 - 11,253,872
Adjusted EBITDA (3,063,176) 4,622,604 1,399,305 - 2,958,733
(Loss) / profit before
taxation (3,400,461) 2,873,319 1,399,305 - 872,162
Finance income 304,893 - - - 304,893
Finance cost (116,808) - - - (116,808)
Depreciation and
amortisation - (1,502,313) - - (1,502,313)
------------------------ ------------ --------------------- ------------ ----------- ------------
Balance Sheet
Segment assets 2,217,633 138,975,913 2,272,609 - 143,466,155
Segment liabilities 660,838 21,455,702 1,708,099 - 23,824,639
------------------------ ------------ --------------------- ------------ ----------- ------------
Geographical information
2019 2018
----------------------------
GBP GBP
---------------------------- ------------- -----------
Revenue by location
United Kingdom 12,657,931 9,575,363
Europe 4,856,381 1,619,136
Rest of the world 41,284 59,372
----------------------------- ------------- -----------
17,555,596 11,253,871
---------------------------- ------------- -----------
Total non-current assets
by location
United Kingdom 91,002,733 82,618,030
Europe 25,744,424 15,435,546
Total 116,747,157 98,053,576
----------------------------- ------------- -----------
6. Finance income
2019 2018
----------------------------------------------
GBP GBP
---------------------------------------------- ---------- -----------------
Finance income
Interest income on financial assets measured
at amortised cost 215,442 358,074
Foreign exchange gain/ (loss) 46,270 (53,181)
---------------------------------------------- ---------- -----------------
Total finance income recognised in profit
or loss 261,712 304,893
---------------------------------------------- ---------- -----------------
7. Finance expense
2019 2018
----------------------------------------------
GBP GBP
---------------------------------------------- ---------- -----------------
Finance expense
Interest expense on financial liabilities
measured at amortised cost 773,940 509,891
Amount capitalised (1) (354,713) (393,083)
-----------------
Total finance expense recognised in profit
or loss 419,227 116,808
---------------------------------------------- ---------- -----------------
(1 Interest expense attributable to construction works has
been capitalised to property, plant and equipment. The interest
rate that applies to this capitalised interest is 3.25%)
8. Earnings per share
2019 2018
Number Number
------------ ------------
Weighted average number of ordinary shares
in issue, excluding those held by the Employee
Benefit Trust, used as the denominator in
calculating basic earnings per share 144,829,546 126,896,794
Options granted under the Employee Share
Save Plan 335,766 142,913
------------ ------------
Weighted average number of ordinary share
and potential ordinary shares used as the
denominator in calculating diluted earnings
per share 145,165,312 127,039,707
------------ ------------
9. Dividends
Interim cash dividend of 0.08p per ordinary share (GBP114,482)
was paid by the Group during the period under review (2018:
GBP101,380).
No final cash dividend has been proposed by the Group during
the period under review (2018: GBP218,626).
10. Capital commitments
At the year end, the group had capital commitments of GBP11.4m
in respect of the construction of two hotels, and was also
obliged to complete the acquisition of the new hotel in Nice
using funds already placed in escrow for this purpose as at
the balance sheet date
11. Events after the reporting date
On the 1st of October 2019 easyHotel France SAS, a 100% owned
subsidiary of the group, acquired an operating hotel in Nice,
France. The purchase, for total consideration of EUR7.5m (plus
associated fees) was made after year end, and the funds required
were held as a deposit by a French notary at the balance sheet
date and have been included in the 2019 year end figures under
other receivables.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
FR GGGDBXSDDGGS
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January 24, 2020 02:32 ET (07:32 GMT)
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