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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 : 9462O
easyHotel PLC
23 May 2018
23 May 2018
easyHotel plc
INTERIM RESULTS FOR THE SIX MONTHSED 31 MARCH 2018
Strong market outperformance driving sustained growth
Continued acceleration of development pipeline
easyHotel plc ("easyHotel") ("the Group") (AIM: EZH) the owner, developer and operator of super budget branded hotels, today announces its interim results for the six months ended 31 March 2018 ("the period").
Financial highlights
Six Months Ended 31 March 2018 2017 Total system sales[1] GBP16.10m GBP12.05m +33.6% Revenue GBP4.76m GBP3.14m +51.7% Adjusted EBITDA[2] GBP0.98m GBP0.65m +51.0% Profit before tax GBP0.09m GBP0.06m +52.5% Interim dividend per share (pence) 0.07p 0.11p (Cash distribution maintained on an enlarged share base)
Business highlights
Hot Features
Premium
Continued market outperformance
-- Owned hotels Revpar[3] up 11.2%, significantly outperforming the market by 11.7%
-- Franchise hotels performing well with like-for-like revenue increasing by 13.5%
-- Adjusted EBITDAR(2) margin increasing to 23.6% (H1 2017: 20.7%)
Network expansion - new openings expected to increase Group's room portfolio by 38% by the
end of the calendar year
-- Three new hotels totalling 269 rooms opened during the period, all trading in-line with expectations
-- Four new owned hotels (517 rooms) and five new franchised hotels (411 rooms) scheduled to
open this calendar year
-- 453 owned rooms and 221 franchised rooms added to the development pipeline since 1 October
2017
-- Strong balance sheet with significant headroom to fund investment pipeline with net cash as
at 31 March 2018 of GBP58.1m (30 September 2017: GBP21.2m) following the recent fund raise.
Commenting, Guy Parsons, CEO of easyHotel plc, said:
"easyHotel delivered another strong performance in the first half of our financial year, growing market share in every market in which it operates. The Group's successful GBP50 million fundraising is already fuelling further expansion and since the placing completed in March 2018 we have been delighted to announce further additions to our development pipeline with new sites acquired in Cambridge and Chester.
"As has been widely reported, industry data points to more challenging trading conditions in the overall UK hotel market whilst the European market continues to perform well. Our growing portfolio of European hotels are trading strongly. Whilst we remain mindful of UK consumer sentiment we believe our super budget offer is appropriately aligned to the needs of discerning and value conscious customers. Group trading remains in line with our expectations and we expect the brand to continue to outperform the market.
"easyHotel now has a growing network of stylish hotels, a strengthening brand, a talented team and strong, asset-backed balance sheet with significant headroom to fund further investment. We will continue to seize opportunities in our UK, European and international markets, balancing our owned hotel development between UK and European assets to create value for our shareholders and underpin the long-term growth of the easyHotel brand."
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 seven owned hotels currently comprise 702 rooms, and it has a further 20 franchised hotels with 1,728 rooms.
Owned hotels:
United Kingdom: Old Street (London), Glasgow, Croydon, Birmingham, Manchester, Liverpool, Newcastle*.
Franchise locations:
United Kingdom: Edinburgh, London Heathrow, Central London, Luton.
Europe: Belgium (Brussels), Bulgaria (Sofia), Germany (Berlin, Frankfurt), Hungary (Budapest), The Netherlands (Amsterdam: City, Arena & Zaandam, Rotterdam, The Hague, The Hague Scheveningen Beach), 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: Ipswich, Sheffield, Leeds. Subject to planning consent: Milton Keynes, Cardiff, Oxford*, Cambridge* and Chester.
Europe: Spain (Barcelona).
Franchise hotels:
United Kingdom: UK (Belfast, Reading)
Europe: Germany (Bernkastel-Kues), Netherlands (Maastricht), Portugal (Lisbon), Spain (Malaga)
International: Iran, Sri Lanka, Turkey (Istanbul), UAE (Dubai).
*Hotels under an operating lease.
OVERVIEW
easyHotel continued to make excellent progress in the first six months of the financial year. The brand has significantly outperformed its competitors, with a strong trading performance across the Group's portfolio of 27 international hotels delivering sustained year-on-year growth.
Total revenue grew by 51.7% to GBP4.76m (H1 2017: GBP3.14m) with Adjusted EBITDA increasing by 51.0% to GBP0.98m (H1 2017: GBP0.65m).
The Group is focused on taking advantage of the opportunities within its markets, by leveraging the brand's reputation as a leader in super budget hotels to increase market share within its existing network and expanding the Group's footprint in popular European and international destinations.
During the period the Group's owned hotel portfolio delivered Revpar(3) growth of 11.2% increasing to GBP36.60 (H1 2017: GBP32.90), outperforming its competitive set by 11.7% (source: STR Global). Like-for-like revenue from franchised hotels increased by 13.5%, with a particularly strong performance in Continental Europe.
Three new hotels were opened during the period in Liverpool, Newcastle and The Hague (Scheveningen Beach) adding a further 269 rooms to the Group's network.
A further 674 rooms were also added to the Group's development pipeline since 1 October 2017, with a successful GBP50 million (before expenses) equity fundraising completed during the period. The proceeds are already being deployed to fund the acceleration of the Group's owned hotel development pipeline.
STRATEGIC PROGRESS
In 2016 the Group outlined a clear long-term growth strategy, which is at the heart of our business model and is focused on four key areas:
1. Customer understanding 2. Maximising revenues 3. Market opportunity 4. Driving shareholder returns 1. Customer understanding
When booking a budget hotel, our customers will prioritise two key elements: location and price. As a brand, our focus is on ensuring that easyHotel is simple to do business with. Our new hotels are being developed in-line with rigorous brand guidelines. Rooms are carefully designed, prioritising the essentials, including a great bed and well-appointed bathrooms. Our staff are friendly and well trained. Customer recommendation is an important reflection of the progress we continue to make here and we are pleased to have seen continued improvements in the Group's TripAdvisor scores.
2. Maximising revenues
The introduction of our new revenue management system in 2017 has underpinned the strong trading performance for the period. Owned hotel Revpar(3) was up 11.2% with occupancy rates across our owned hotels rising to 85.5% (H1 2017: 85.1%) and Average Daily Rate ("ADR") increasing to GBP41.59 (H1 2017: GBP38.40). Like-for-like franchise revenue increased by 13.5% with total franchise occupancy rates rising to 85.0% (2017: 80.8%) and ADR increasing to GBP48.17 (2017: GBP44.64).
As part of our focus on improving our customers' journey we launched our new website in January 2018. Since then we have seen a 15% increase in the conversion rate from customer visits to completed bookings.
3. Market opportunity
The long-term structural growth drivers in the branded budget hotel sector remain strong. In the UK the budget hotel sector has grown faster than any other sector in the hotel industry for the last thirty years and is forecast to continue to do so (source: Melvin Gold Consulting Ltd). In overseas markets we see a strong opportunity for the brand, particularly in Continental Europe.
The Group continues to target carefully selected locations to expand its portfolio of owned and franchised hotels. For owned hotels, the Group believes there is potential for approximately 12,000 easyHotel rooms primarily in the UK, Spain, France and Germany with an additional opportunity for approximately 15,000 franchised easyHotel rooms across the UK, Europe and the Middle East.
The Group believes that the opportunity to develop owned hotels in key gateway European cities is significant and has decided to increase both its resource and its exposure to mainland Europe, to balance the number of UK and European hotel openings.
New openings
During the period three new hotels were opened, including a new owned 78-room hotel in Liverpool and the acquisition and opening of a 104-room leased hotel in Newcastle. The Group also opened the 87-bedroom franchised easyHotel at The Hague, Scheveningen Beach in March 2018. All three hotels have traded in-line with expectations.
Development pipeline
The Group continues to make excellent progress in expanding its development pipeline.
Owned development pipeline
Since 1 October 2017 the Group has added a further 453 rooms to its owned hotel development pipeline with plans for new hotels in Cardiff, Milton Keynes, Cambridge and Chester. All four hotels are anticipated to open in 2019.
New hotel projects currently under construction and which are all expected to open in this calendar year include Leeds (93 rooms), Sheffield (131 rooms), Ipswich (89 rooms) and Barcelona (204 rooms).
The Group continues to have under review a large number of investment opportunities in both the UK and Europe, including the pipeline of owned hotels identified at the time of the fundraising announced in February 2018.
Franchised development pipeline
In November 2017 the Group announced a further two franchised hotels (162 rooms) under development in The Hague, Scheveningen Beach, which opened in March 2018, and Maastricht, scheduled to open in the second half of 2018. In March 2018 the Group also announced that it had signed an agreement for the development of a 146-room hotel in Malaga, Spain.
Other new franchise hotels currently under construction include Lisbon (101 rooms), Bernkastel-Kues (100 rooms), Belfast (81 rooms) and Reading (54 rooms) which are all planned to open this calendar year.
In addition to the UK and mainland Europe, the Group also has hotels under development in Bur Dubai (300 rooms), Istanbul (300 rooms), Iran (500 rooms) and Sri Lanka (200 rooms). These are anticipated to open over the course of the next two years and beyond and will, on completion, enhance the Group's international position as the super budget hotel brand of scale.
Funding to accelerate owned hotel development pipeline
On 22 February 2018 the Group announced a successful placing of new ordinary shares to raise GBP50m (before expenses). The proceeds of the placing will primarily be used to fund the acceleration of the Group's owned hotel development pipeline across the UK and Europe.
4. Delivering Shareholder Returns
Operational efficiency is an important area of focus for the Group. Costs are carefully managed, and our operating margins are high. Adjusted EBITDAR(2) margin increased to 23.6% for the period (31 March 2017: 20.7%).
The Board adopts strict investment criteria for its hotel developments, targeting a Group blended ROCE of 15%, based upon mature EBITDA. The Group's newly opened hotels have traded particularly strongly during the period, ahead of management's original expectations. Following the success of the new brand style, the Group also completed a GBP1.5m refurbishment of its Croydon and Glasgow hotels in March 2018, bringing both hotels into line with the new easyHotel brand look. We have been pleased with the initial customer response and are confident the improvements will be earnings enhancing.
The Board continues to focus on the development of its franchised estate. Franchised hotels contribute high incremental margin, contribute to the brand marketing budget and broaden the easyHotel brand presence without the need for direct capital investment. Franchisees also see significant returns and we believe that the outperformance of our new format owned hotels will have a positive impact on future franchise enquiries.
FINANCIAL REVIEW
Revenue
Total Group revenue was up 51.7% to GBP4.76m (31 March 2017: GBP3.14m).
Owned hotel revenues, including other income, increased by 62.3% during the period to GBP3.96m (31 March 2017: GBP2.44m), reflecting the impact of hotel openings in 2017: Birmingham (February), Manchester (April), Liverpool (November) and Newcastle (December) and despite the planning related loss of 70 rooms from October 2017 at Old Street, London, and the temporary refurbishment impact on trading for both the Croydon and Glasgow hotels between November 2017 and March 2018.
Owned hotel Revpar(3) was up 11.2% to GBP36.60 (31 March 2017: GBP32.90) with the hotels outperforming their competitive set by 11.7% (source: STR Global).
Total franchise revenue increased by 14.8%, to GBP0.80m (31 March 2017: GBP0.70m), primarily as a result of the strong performance of existing hotels and the impact of successful openings of Brussels (October 2016), Amsterdam-Arena (November 2016), Amsterdam-Zaandam (May 2017) and The Hague-Scheveningen (March 2018) hotels.
Like-for-like franchise revenue increased by 13.5%.
Adjusted EBITDA and Profit Before Tax
Adjusted EBITDA(2) was up 51.0% at GBP0.98m (31 March 2017: GBP0.65m), reflecting the new hotel openings and strong trading (both owned and franchised hotels), partially offset by the impact of the planning loss of 70 rooms at Old Street, the refurbishment of both Croydon and Glasgow hotels and the continuing investment necessary to support the Company's growth plans. Adjusted EBITDAR(2) margin was up to 23.6% (31 March 2017: 20.7%).
After taking into account the increase in depreciation and amortisation costs to GBP0.71m (31 March 2017: GBP0.27m) relating to the progress made in the Company's hotel development strategy and a net finance income of GBP0.03m (31 March 2017: net finance expense of GBP0.05m), adjusted profit before tax stated before pre-opening costs, share based payments and other non-recurring items was unchanged at GBP0.30m (31 March 2017: GBP0.33m).
Owned hotel profit before tax was up to GBP0.94m (31 March 2017: GBP0.78m). Franchise hotel profit before tax was flat at GBP0.40m (31 March 2017: GBP0.42m), reflecting investment during the period to support our long-term growth plans for our franchised business.
Corporate office expenses and interest were GBP1.04m (31 March 2017: GBP0.86m).
Reported profit before tax was GBP0.09m (31 March 2017: GBP0.06m), after taking into account pre-opening costs of GBP0.05m (31 March 2017: GBP0.11m) as well as share based payments and other non- recurring items of GBP0.16m (31 March 2017: GBP0.16m).
Cash Flows and Balance Sheet
During the first half of the year, cash and cash equivalents increased to GBP71.26m (30 September 2017: GBP33.26m), primarily due to the receipt in March 2018 of proceeds from the equity placing of GBP48.80m (net of expenses), net bank debt drawdown of GBP1.07m, less net cash utilised by operations of GBP0.41m, net cash used in investing activities of GBP11.13m, and dividend payments of GBP0.22m.
Net of bank borrowings, net cash was GBP58.13m (30 September 2017: GBP21.23m).
Total non-current assets increased to GBP64.06m (30 September 2017: GBP52.79m).
Earnings Per Share and Interim Dividend
Basic earnings per share was 0.1p (31 March 2017: 0.0p). Following the successful placing in March 2018, the company has 145,954,546 ordinary shares in issue.
The Board has announced an interim dividend of 0.07p per ordinary share (31 March 2017: 0.11p) maintaining cash distribution on the recently enlarged share base. The interim dividend will be paid on 29 June 2018 to those shareholders on the register at the close of business on 1 June 2018. The shares will go ex-dividend on 31 May 2018.
OUTLOOK
easyHotel delivered another strong performance in the first half of our financial year, growing market share in every market in which it operates. The Group's successful GBP50 million fundraising is already fuelling further expansion and since the placing completed in March 2018 we have been delighted to announce further additions to our development pipeline with new sites acquired in Cambridge and Chester.
As has been widely reported, industry data points to more challenging trading conditions in the overall UK hotel market whilst the European market continues to perform well. Our growing portfolio of European hotels are trading strongly. Whilst we remain mindful of UK consumer sentiment we believe our super budget offer is appropriately aligned to the needs of discerning and value conscious customers. Group trading remains in line with our expectations and we expect the brand to continue to outperform the market.
easyHotel now has a growing network of stylish hotels, a strengthening brand, a talented team and strong, asset-backed balance sheet with significant headroom to fund further investment. We will continue to seize opportunities in our UK, European and international markets, balancing our owned hotel development between UK and European assets to create value for our shareholders and underpin the long-term growth of the easyHotel brand.
GROUP STATEMENT OF COMPREHENSIVE INCOME
for the period ended 31 March 2018
Unaudited Unaudited Audited
6 months 6 months ended year ended
ended 31/03/2017 30/09/2017
31/03/2018 GBP GBP
Note GBP
========================================================== ====== ================= ==================== =================
System Sales* 16,103,636 12,050,275 29,672,176
---------------------------------------------------------- ------ ----------------- -------------------- -----------------
Revenue 2 4,758,081 3,136,817 8,416,257
Cost of sales (2,219,160) (1,353,264) (3,257,780)
========================================================== ====== ================= ==================== =================
Gross profit 2,538,921 1,783,553 5,158,477
Administrative expenses (2,473,848) (1,674,342) (4,477,957)
Operating profit 3 65,073 109,211 680,520
---------------------------------------------------------- ------ ----------------- -------------------- -----------------
Analysed as:
Adjusted EBITDA** 982,690 650,778 2,300,283
Non-recurring items (33,725) (79,790) (398,464)
Hotel pre-opening and development
costs (47,920) (110,941) (217,934)
Depreciation and amortisation (706,028) (266,249) (831,414)
Share based payments 3 (129,944) (84,587) (171,951)
---------------------------------------------------------- ------ ----------------- -------------------- -----------------
65,073 109,211 680,520
---------------------------------------------------------- ------ ----------------- -------------------- -----------------
Finance income 4 93,283 130,947 270,992
Finance expense 4 (68,237) (181,077) (91,193)
Profit before taxation 90,119 59,081 860,319
Taxation (22,529) (53,703) (217,458)
========================================================== ====== ================= ==================== =================
Profit for the period attributable
to equity holders of the company 67,590 5,378 642,861
========================================================== ====== ================= ==================== =================
Other comprehensive income
Items that will or may be reclassified
to profit or loss
* Exchange gains/(losses) arising on retranslation of
foreign operations (22,368) (286,444) (78,958)
========================================================== ====== ================= ==================== =================
Total comprehensive income/(loss)
attributable to equity holders
of the company 45,222 (281,066) 563,903
========================================================== ====== ================= ==================== =================
Earnings per share
Basic (pence) 9 0.1 0.0 0.7
Diluted (pence) 9 0.0 0.0 0.7
========================================================== ====== ================= ==================== =================
*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 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.
GROUP STATEMENT OF FINANCIAL POSITION
at 31 March 2018
Unaudited Unaudited Audited
6 months 6 months year ended
Note ended ended 31/03/2017 30/09/2017
31/03/2018 GBP GBP
GBP
====================== ================== ===================== ===================== ================
Assets
Non-current assets
Intangibles 1,065,856 410,235 1,014,325
Property, plant and
equipment 62,355,070 46,363,433 51,141,920
Long term deposits 634,770 429,037 636,434
Total non-current
assets 64,055,696 47,202,705 52,792,679
Current assets
Trade and other
receivables 5 2,423,797 4,102,718 2,723,821
Cash and cash
equivalents 6 71,262,688 36,313,581 33,255,253
---------------------- ------------------ --------------------- --------------------- ----------------
Total current assets 73,686,485 40,416,299 35,979,074
---------------------- ------------------ --------------------- --------------------- ----------------
Total assets 137,742,181 87,619,004 88,771,753
---------------------- ------------------ --------------------- --------------------- ----------------
Liabilities
Non-current
liabilities
Trade and other
payables 7 - 98,167 376,928
Bank borrowings 12,768,304 11,541,049 11,666,089
Deferred tax liability 334,197 238,239 351,488
====================== ================== ===================== ===================== ================
Total non-current
liabilities 13,102,501 11,877,455 12,394,505
Current liabilities
Trade and other
payables 7 5,343,148 6,304,783 5,804,807
Bank borrowings 360,000 - 360,000
Corporate taxation - 78,346 31,003
====================== ================== ===================== ===================== ================
Total current
liabilities 5,703,148 6,383,129 6,195,810
====================== ================== ===================== ===================== ================
Total liabilities 18,805,649 18,260,584 18,590,315
====================== ================== ===================== ===================== ================
Total net assets 118,936,532 69,358,420 70,181,438
====================== ================== ===================== ===================== ================
Equity
Equity attributable to
owners of the Company
Share capital 1,459,545 1,005,000 1,005,000
Share premium 113,119,801 64,775,792 64,775,791
Merger reserve 2,750,001 2,750,001 2,750,001
Employee benefits
trust
(EBT) reserve (1,067,405) (1,067,405) (1,067,405)
Currency translation
reserve (101,326) (286,444) (78,958)
Retained earnings 2,775,916 2,181,476 2,797,009
Total equity 118,936,532 69,358,420 70,181,438
====================== ========================================= ===================== ================
GROUP STATEMENT OF CASH FLOWS
for the period ended 31 March 2018
Unaudited Unaudited Audited
6 months ended 6 months ended year ended
31/03/2018 31/03/2017 30/09/2017
GBP GBP GBP
Cash flows from operating activities
Profit before taxation for the period 90,119 59,081 860,319
Adjustments for:
Profit on disposal of Property,
plant and equipment - - 239,615
Depreciation of property, plant
and equipment 706,028 266,249 831,414
Share based payment charge 129,944 84,587 171,951
Finance Income (93,283) (130,947) (206,999)
Finance Expense 59,762 181,077 91,193
Operating cash flows before movements
in working capital 892,570 460,047 1,987,493
(Increase)/decrease in trade and
other receivables (436,950) (1,569,821) (928,125)
Increase/(decrease) in trade and
other payables (794,895) 1,837,280 1,449,051
Cash generated from/(utilized by)
operations (339,275) 727,506 2,508,419
Corporation tax paid (69,323) (50,224) (148,667)
------------------------------------------ ------------------- ----------------- --------------
Net cash generated from/(utilized
by) operations (408,598) 677,282 2,359,752
Investing activities
Purchase of property, plant and
equipment (10,738,954) (16,808,356) (22,709,420)
VAT on investing activities (389,533) (1,426,631) (415,660)
(11,128,487) (18,234,987) (23,125,080)
Financing activities
Proceeds from issue of ordinary
share capital 50,000,000 38,000,000 38,000,000
Capitalised costs related to issue
of ordinary share capital (1,201,447) (1,281,522) (1,436,245)
Dividend Paid (218,625) (218,625) (327,939)
Net proceeds in bank loan 1,252,240 3,935,050 11,890,176
Repayment of bank loan (180,000) (180,000) (7,560,000)
Finance income* 93,283 130,947 194,743
Finance expense* (176,596) (181,077) (337,599)
Net cash utilised by financing activities 49,568,855 40,204,773 40,423,136
========================================== =================== ================= ==============
Net increase/(decrease) in cash
and cash equivalents 38,031,770 22,647,068 19,657,808
Cash and cash equivalents at the
beginning of the period 33,255,253 13,659,018 13,659,018
Exchange differences on transactions
of foreign operations (24,335) 7,495 (61,573)
========================================== =================== ================= ==============
Cash and cash equivalents at the
end of the period 71,262,688 36,313,581 33,255,253
========================================== =================== ================= ==============
* The comparative figure for interest expense has been reclassified to better reflect the nature of the cashflows.
GROUP STATEMENT OF CHANGES IN EQUITY
for the period ended 31 March 2018
6 months ended 31 March
2017
Unaudited
Currency
Share Share Merger EBT Translation Retained
Capital Premium Reserve Reserve Reserve Earnings Total
GBP GBP GBP GBP GBP GBP GBP
--------------------- ---------- ----------- ---------- ------------ ------------ ---------- -----------
At 30 September
2016 625,000 28,592,036 2,750,001 (1,067,405) - 2,310,136 33,209,768
Profit - - - - - 5,378 5,378
Other comprehensive
income - - - - (286,444) - (286,444)
--------------------- ---------- ----------- ---------- ------------ ------------ ---------- -----------
Total comprehensive
income
for the period - - - - (286,444) 5,378 (281,066)
Share based payment
charge - - - - - 84,587 84,587
Dividends - - - - - (218,625) (218,625)
Issue of Shares 380,000 36,183,755 - - - - 36,563,755
--------------------- ---------- ----------- ---------- ------------ ------------ ---------- -----------
Balance at 31
March 2017 1,005,000 64,775,791 2,750,001 (1,067,405) (286,444) 2,181,476 69,358,420
--------------------- ---------- ----------- ---------- ------------ ------------ ---------- -----------
Year ended 30 September
2017
Audited
Currency
Share Share Merger EBT Translation Retained
Capital Premium Reserve Reserve Reserve Earnings Total
GBP GBP GBP GBP GBP GBP GBP
------------------ ----------- ------------ ----------- ------------- ------------ ----------- ------------
At 30 September
2016 625,000 28,592,036 2,750,001 (1,067,405) - 2,310,136 33,209,768
Profit - - - - - 642,861 642,861
Other
comprehensive
income - - - - (78,958) - (78,958)
------------------ ----------- ------------ ----------- ------------- ------------ ----------- ------------
Total
comprehensive
income
for the period - - - - (78,958) 642,861 563,903
Share based
payment
charge - - - - - 171,951 171,951
Dividends - - - - - (327,939) (327,939)
Issue of Shares 380,000 36,183,755 - - - - 36,563,755
------------------ ----------- ------------ ----------- ------------- ------------ ----------- ------------
Balance at 30
September 2017 1,005,000 64,775,791 2,750,001 (1,067,405) (78,958) 2,797,009 70,181,438
------------------ ----------- ------------ ----------- ------------- ------------ ----------- ------------
6 months ended 31 March
2018
Unaudited
Currency
Share Share Merger EBT Translation Retained
Capital Premium Reserve Reserve Reserve Earnings Total
GBP GBP 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 - - - - - 67,588 67,588
Other
comprehensive
income - - - - (22,368) - (22,368)
------------------ ----------- ------------ ----------- ------------- ------------ ----------- ------------
Total
comprehensive
income
for the period - - - - (22,368) 67,588 45,220
Share based
payment
charge - - - - - 129,944 129,944
Dividends - - - - - (218,625) (218,625)
Issue of shares 454,545 48,344,010 - - - - 48,798,555
Balance at 31
March 2018 1,459,545 113,119,801 2,750,001 (1,067,405) (101,326) 2,775,916 118,936,532
------------------ ----------- ------------ ----------- ------------- ------------ ----------- ------------
NOTES TO THE INTERIM FINANCIAL INFORMATION
for the period ended 31 March 2018
1. Basis of accounting
The interim financial information set out in this interim report has been prepared under the recognition and measurement requirements of IFRS as adopted by the European Union but does not contain all of the disclosures that are required under these standards, taking into account International Financial Reporting Interpretations Committee (IFRIC) interpretations and those parts of the Companies Act 2006 applicable to companies reporting under IFRS. Based on these adopted IFRSs, the Directors have applied the accounting policies which they expect to apply when the annual IFRS financial statements are prepared for the year ended 30 September 2018.
The group's accounting policies remain as stated in the group's full annual accounts for the year ended 30 September 2017.
This report is not prepared in accordance with IAS 34, which is not mandatory. These interim results have not been audited but they have been reviewed in accordance with ISRE 2410 by the Company's auditors BDO LLP. The financial information for the year ended 30 September 2017 does not constitute the company's statutory accounts for that year, these have been delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006. Copies of this report have been posted or provided electronically to shareholders. Further copies are available free of charge on request from the Company Secretary at the Company's registered office, easyHotel House, 80 Old Street, London EC1V 9AZ.
Basis of preparation - going concern
After making appropriate enquiries and having reviewed the Group's expenditure commitments, current financial projections and future cash flows, together with available cash resources and undrawn committed borrowing facilities, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For these reasons, the Directors continue to adopt the going concern basis in preparing these interim results.
2. Revenue
Unaudited Unaudited Audited
6 months ended 6 months year ended
31/03/2018 ended 31/03/2017 30/09/2017
GBP GBP GBP
Revenue arises from
Owned hotel revenue 3,868,148 2,437,289 6,489,245
Franchisee hotel revenue 802,933 699,528 1,812,159
Other income 87,000 - 114,853
4,758,081 3,136,817 8,416,257
Revenue by location
United Kingdom 4,118,484 2,632,477 7,209,316
Europe 592,425 446,599 1,073,830
Rest of the world 47,172 57,741 133,111
------------------------- ------------------- -------------------------- --------------------
4,758,081 3,136,817 8,416,257
3. Operating Profit
The following have been included in arriving at operating profit:
Unaudited Unaudited Audited
6 months ended 6 months year ended
31/03/2018 ended 30/09/2017
GBP 31/03/2017 GBP
GBP
============================================ =================== ============= ====================
Staff costs:
* Wages and salaries 1,114,328 1,037,675 2,274,488
* Social security costs 130,877 124,029 271,754
* Staff recruitment and training 52,065 14,842 23,256
============================================= =================== ============= ====================
1,297,270 1,176,545 2,569,498
Rent Expense 141,465 - 10,917
Depreciation and amortisation 706,028 266,249 831,414
Share based payments 129,944 84,587 171,951
--------------------------------------------- ------------------- ------------- --------------------
4. Finance Income and Expense
Unaudited Unaudited Audited
6 months 6 months year ended
ended 31/03/2018 ended 31/03/2017 30/09/2017
GBP GBP GBP
Finance income includes
Interest income on financial
assets measured at amortised
cost 93,283 94,381 206,999
Interest income on amounts due - - -
from Benelux franchisee
Foreign exchange gain - 36,566 63,993
93,283 130,947 270,992
Finance expense includes
Interest expense on financial
liabilities measured at amortised
cost (208,703) (181,077) (356,165)
Amount capitalised* 148,941 - 264,972
Foreign exchange loss (8,475) - -
(68,237) (181,077) (91,193)
*Interest expense attributable to construction works has been capitalised to property, plant and equipment.
5. Trade and other receivables
Unaudited Unaudited Audited
6 months ended 6 months year ended
31/03/2018 ended 31/03/2017 30/09/2017
GBP GBP GBP
----------------------------- ------------------- ----------------- ---------------
Trade receivables 221,438 19,696 93,591
Accrued Income 28,098 3,744 16,001
------------------------------ ------------------- ----------------- ---------------
Total financial assets
other than cash and
cash equivalents classified
as loans and receivables 249,536 23,440 109,592
Prepayments 406,742 478,440 274,203
VAT receivables 1,758,376 2,199,898 1,305,201
Other receivables 9,143 - 29,886
Amounts due from franchisees
in the future 0 1,400,940 1,004,939
------------------------------ ------------------- ----------------- ---------------
Total trade and other
receivables 2,423,797 4,102,718 2,723,821
------------------------------ ------------------- ----------------- ---------------
Classified as follows:
Current portion 2,423,797 4,102,718 2,723,821
------------------------------ ------------------- ----------------- ---------------
There is no material difference between the net book value and the fair values of trade and other receivables due to their short-term nature.
6. Cash and cash equivalents
For the purpose of the cash flow statement, cash and cash equivalents comprise the following balances:
Unaudited Unaudited Audited
6 months 6 months ended year ended
ended 31/03/2018 31/03/2017 30/09/2017
GBP GBP GBP
-------- --------------------------------------------------- -------------------------------------------------- ----------------------------------------
Cash at
bank and
in
transit 71,262,688 36,313,581 33,255,253
--------- -------------------------------------------------- -------------------------------------------------- ----------------------------------------
7. Trade and other payables
Unaudited Unaudited Audited
6 months 6 months ended year ended
ended 31/03/2018 31/03/2017 30/09/2017
GBP GBP GBP
------------------------------------- --------------------- ------------------- -------------
Trade payables 476,092 1,302,498 697,963
Other payables 85,953 - 30,489
Amounts payable to franchisees
in future 1,308,267 441,756 998,962
Accruals 2,380,223 477,702 1,463,615
Total financial liabilities
classified as financial liabilities
measured as amortised cost 4,250,535 2,221,956 3,191,029
Other taxation and social
security 110,331 100,011 56,636
VAT payable - - 174,872
Bookings in advance 743,057 3,951,819 2,554,677
Deferred Income 239,225 129,164 204,521
-------------------------------------- --------------------- ------------------- -------------
Total trade and other payables 5,343,148 6,402,950 6,181,735
-------------------------------------- --------------------- ------------------- -------------
Classified as follows:
Non-current portion - 98,167 376,928
Current portion 5,343,148 6,304,783 5,804,807
-------------------------------------- --------------------- ------------------- -------------
5,343,148 6,402,950 6,181,735
------------------------------------- --------------------- ------------------- -------------
There is no material difference between the net book value and the fair values of current trade and other payables due to their short-term nature.
8. 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 franchise hotel operations, in connection with the license of the Group's brand name
Owned properties
GBP Franchising Total
GBP GBP
31 March 2018
Total revenue from external customers
and other revenue 3,955,148 802,933 4,758,081
Adjusted EBITDA 1,488,073 422,278 1,910,351
Profit before taxation 940,657 402,827 1,343,484
Segment assets 135,535,976 1,144,429 136,645,248
Segment liabilities (16,525,473) (1,522,978) (18,113,366)
---------------------------------------- ------------------------- ----------------- -----------------------
Additions to non-current assets 11,751,691 209,197 11,925,732
Disposals to non-current assets - - -
Finance income 93,283 - 93,283
Finance cost (excluding realised
foreign exchange losses) (59,762) - (59,762)
Depreciation and amortisation (580,937) (19,451) (600,387)
---------------------------------------- ------------------------- ----------------- -----------------------
31 March 2017
Total revenue from external customers
and other revenue 2,437,289 699,528 3,136,817
Adjusted EBITDA 1,111,287 416,838 1,528,125
Profit before taxation 782,349 416,838 1,199,187
Segment assets 82,844,997 3,934,109 86,779,106
Segment liabilities (13,517,794) (3,934,109) (17,451,903)
---------------------------------------- ------------------------- ----------------- -----------------------
Additions to non-current assets 16,471,773 - 16,471,773
Disposals to non-current assets - - -
Finance income 94,381 - 94,381
Finance cost (181,077) - (181,077)
Depreciation and amortisation (242,242) - (242,242)
---------------------------------------- ------------------------- ----------------- -----------------------
30 September 2017
Total revenue from external
customers and other revenue 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)
-------------------------------------------- ------------------------- ----------------- -----------------------
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)
-------------------------------------------- ------------------------- ----------------- -----------------------
8. Segment Information (continued)
Reconciliation of reportable segment revenues, profit or loss, assets and liabilities to the Group's corresponding amounts is shown below:
Unaudited Unaudited Audited
6 months ended 6 months ended year ended
31/03/2018 31/03/2017 30/09/2017
GBP GBP GBP
------------------------------------------- ---------------------- -------------------- ------------------------
Adjusted EBITDA of reportable segments 1,910,351 1,528,125 4,282,377
Adjusted EBITDA of corporate office (927,661) (877,347) (1,982,094)
Total adjusted EBITDA 982,690 650,778 2,300,283
Profit before income tax
Total profit of reportable
segments 1,343,484 1,199,187 3,675,277
Corporate office expenses and
interest (1,041,778) (864,788) (2,026,609)
Other non-recurring
income/(costs) (33,725) (79,790) (158,849)
Hotel pre-opening and
development
costs (47,920) (110,941) (217,934)
Share based payments (129,944) (84,587) (171,951)
Disposal of non-current assets - - (239,615)
-------------------------------------------- ---------------------- -------------------- ------------------------
Profit before tax per statement
of comprehensive income 90,119 59,081 860,319
-------------------------------------------- ---------------------- -------------------- ------------------------
Assets
Total assets for reportable
segments 136,680,405 86,779,106 87,822,063
Cash in Employee Benefits Trust 1,593 1,693 1,643
Corporation tax - - -
Corporate office assets 1,060,183 838,205 948,047
-------------------------------------------- ---------------------- -------------------- ------------------------
Total assets per statement of financial
position 137,742,181 87,619,004 88,771,753
-------------------------------------------- ---------------------- -------------------- ------------------------
Liabilities
Total liabilities for reportable
segments (18,048,453) (17,451,903) (17,383,711) Corporation tax 47,334 (78,346) (31,003) Corporate office liabilities (423,000) (492,096) (824,113) Deferred tax liability (381,531) (238,239) (351,488) -------------------------------------------- ---------------------- -------------------- ------------------------ Total liabilities per statement of financial position (18,805,649) (18,260,584) (18,590,315) -------------------------------------------- ---------------------- -------------------- ------------------------ 9. Earnings per share
Basic earnings per ordinary share are calculated using the weighted average number of ordinary shares in issue during the financial period of 104,120,255 (31 March 2017: 95,825,549; 30 September 2017: 97,709,247). Diluted earnings per ordinary share is calculated using the weighted average number of ordinary shares in issue during the financial period of 104,200,717 (31 March 2017: 95,825,549; 30 September 2017: 97,829,994). The company has 1,836,207 potentially dilutive options, issued or outstanding. Earnings consist of profit for the period attributable to the shareholders amounting to GBP67,588 (31 March 2017: GBP5,378; 30 September 2017: GBP642,861).
10. Events after the reporting date
On 11 April 2018, the Group announced the acquisition of the freehold for a site in Chester to develop a new-build 109-bedroom hotel. The acquisition is subject to planning permission.
INDEPENDENT REVIEW REPORT TO EASYHOTEL PLC
Introduction
We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 March 2018 which comprises the Group Statement of Comprehensive Income, the Group Statement of Changes in Equity, the Group Statement of Financial Position, the Group Statement of Cash Flows, and the related notes.
We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
Directors' responsibilities
The interim report, including the financial information contained therein, is the responsibility of and has been approved by the directors. The directors are responsible for preparing the interim report in accordance with the rules of the London Stock Exchange for companies trading securities on AIM which require that the half-yearly report be presented and prepared in a form consistent with that which will be adopted in the Company's annual accounts having regard to the accounting standards applicable to such annual accounts.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.
Our report has been prepared in accordance with the terms of our engagement to assist the Company in meeting the requirements of the rules of the London Stock Exchange for companies trading securities on AIM and for no other purpose. No person is entitled to rely on this report unless such a person is a person entitled to rely upon this report by virtue of and for the purpose of our terms of engagement or has been expressly authorised to do so by our prior written consent. Save as above, we do not accept responsibility for this report to any other person or for any other purpose and we hereby expressly disclaim any and all such liability
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity", issued by the Financial Reporting Council for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 March 2018 is not prepared, in all material respects, in accordance with the rules of the London Stock Exchange for companies trading securities on AIM.
BDO LLP
Chartered Accountants
55 Baker Street
London W1U 7EU
United Kingdom
22 May 2018
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
[1] Total system sales is the full amount that the customer pays for owned and franchised hotels, including initial sign-on fees paid by franchisees to the Company
[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 non-recurring items (see Group Statement of Comprehensive Income statement). Adjusted EBITDAR reflects Adjusted EBITDA before rent.
[3] The Croydon and Glasgow hotels were refurbished during the period and the Old Street hotel operated with 92 rooms vs 162 rooms for the same period last year. On this basis, the Group is unable to report on a like for like Revpar basis.
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
IR UUVBRWKAVUAR
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May 23, 2018 02:01 ET (06:01 GMT)
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