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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Jap. Leisure H. | LSE:JPLH | London | Ordinary Share | GG00B28QMS50 | 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% | 23.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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TIDMJPLH
RNS Number : 3950T
Japan Leisure Hotels Ltd
28 September 2010
JAPAN LEISURE HOTELS LIMITED
("Japan Leisure Hotels", "JPLH" or "the Company")
Interim Results for the period ended 30 June 2010
Japan Leisure Hotels (AIM: JPLH) announces its interim results for the period
ended 30 June 2010. JPLH's current portfolio comprises 6 hotels with 242 rooms.
SUMMARY
· Occupancy rates marginally lower at 230%, reflecting more competitive
pricing and some hotels nearing scheduled refurbishment
· Cash position of JPJPY139.6 million (GBP1.1 million) with no debt (30
June 2009: JPJPY327.0 million (GBP2.1 million)), following expenditure on
Yokkaichi refurbishment.
· Cash from operations of JPJPY88.5 million (GBP0.6 million) (H1 2009:
JPJPY118.6 million (GBP0.8 million)): Yokkaichi closed for most of the period
· EBITDA margin before asset management fees of 33.3% (H1 2009: 37.0%)
· Adjusted NAV of 0.77p (JPJPY101.52) per share as at 30 June 2010
· Refurbishment and rebranding of Yokkaichi hotel fully complete, on time
and within budget.
· Attractive acquisition opportunities continue to be available
Alan Clifton, JPLH's Chairman, commented:
"In 2010, trading conditions became tougher than had been experienced the
previous year, as Japan continued to suffer economic difficulties. Against this
backdrop, consumer spending [in our sector] appears to be quite resilient,
supporting the Board's long held view that the leisure industry in Japan
operates independently of broader economic drivers. As a result, we remain
cautiously optimistic about the Company's long term growth prospects, whilst
being fully mindful of the near term challenges."
Stephen Mansfield, Asset Manager, commented:
"We have consistently argued that, regardless of the macro economic picture,
there will remain a significant underlying demand to visit leisure hotels in
Japan. Pressures on privacy have spawned an industry that boasts annual
revenues in the order of JPY4 trillion (GBP30 billion) per year.
"We have proved our ability to maintain revenues in a deflationary environment,
grow guest numbers and improve the free cash flow from our portfolio of leisure
hotels. We have also demonstrated that we can successfully renovate and re-brand
a hotel on time and within budget. This should convince both existing and
potential new investors of our capacity to execute the strategy we have sought
to pursue and deliver long term cash flows and dividends."
A full copy of the 2010 Interim Report is available in PDF format on the
Company's website, www.japanleisurehotels.com. The Interim Report will be
emailed to all investors who have registered on the website by the end of today.
Further information on the Bonita Hotels can be found at www.hotel-bonita.jp.
Enquiries:
+------------------------------+-------------------------------------+
| Asset Manager | |
+------------------------------+-------------------------------------+
| Steve Mansfield | +81 3 4550 1808 |
+------------------------------+-------------------------------------+
| | |
+------------------------------+-------------------------------------+
| Shore Capital (NOMAD to JLH) | 020 7408 4090 |
+------------------------------+-------------------------------------+
| Dru Danford | |
+------------------------------+-------------------------------------+
| Stephane Auton | |
+------------------------------+-------------------------------------+
| | |
+------------------------------+-------------------------------------+
| Pelham Public Relations | |
+------------------------------+-------------------------------------+
| Archie Berens | 020 7861 3112 or 07802 442486 |
+------------------------------+-------------------------------------+
Chairman's Statement
Introduction
In 2010, trading conditions became tougher than had been experienced the
previous year. Japan continues to suffer economic difficulties and both the
government and the central bank look to be in a permanent state of crisis.
Against this backdrop, consumer spending in our sector appears to be quite
resilient, supporting the Board's long held view that the leisure industry in
Japan operates independently of broader economic drivers. Nevertheless, there is
increasing evidence that our customers have become more price conscious than in
previous years. This has led to a pricing environment which, combined with the
fact that some of our hotels are nearing their scheduled refurbishment, has
impacted on Japan Leisure Hotels' sales in the first half of 2010.
Financial Performance
In the 6 months ended 30 June 2010, occupancy rates at our leisure hotels
averaged 230%. Although this figure is slightly lower than in previous years,
rooms are still turning more than twice a day, providing a healthy flow of
income. Revenues for the first half of the year were JPJPY516.6 million (GBP3.7
million) (H1 2009: JPJPY590.7 million (GBP4.1 million)) and REVPAR declined to
JPJPY14,239 (GBP102.0) (H1 2009: 15,401 (GBP107.9)). EBITDA was JPJPY122.0
million (GBP0.9 million) (H1 2009: JPJPY166.8 million (GBP1.2 million.)).
The main cause of these declines, apart from the more competitive pricing
environment, was the planned closure of the hotel at Yokkaichi for refurbishment
for almost the entire period, resulting in a negative earnings contribution of
JPJPY22.3 million, compared with EBITDA of JPJPY0.7 million in H1 2009. The
refurbishment was completed on time and within budget.
Cash from operations was JPJPY88.5 million (GBP0.6 million) (H1 2009: JPJPY118.6
million (GBP0.8 million). This was a creditable performance, given the closure
of Yokkaichi. As at 30 June 2010, the Company's cash position was JPJPY139.6
million (GBP1.1 million) (30 June 2009: JPJPY327.0 million (GBP2.1 million)) a
lower outcome due to the expenditure incurred on Yokkaichi. The Company's
financial position remains strong, however, with no debt and healthy cash flow.
As described in the 2009 annual report, JLH's portfolio of 6 leisure hotels was
valued by Colliers International (Hong Kong) Ltd at 31 December 2009 at
approximately JPJPY4,632 million. When this is combined with other net assets,
including cash, the Adjusted Net Asset Value as at 30 June 2010 was JPJPY4,477
million (GBP33.9 million) or JPJPY101.52 (77p) per share.
Dividend
The Company paid a dividend of 1p per share in respect of 2009 to shareholders
on 20 August 2010. The Board does not propose to pay a dividend for the first
half of the year but currently anticipates recommending a dividend in respect of
2010, payable during 2011.
Board
On 30 June 2010, William Hunter resigned as a non-executive director of the
Company. We are grateful for his sage advice and contribution and wish him
every success for the future.
On 2 July 2010, Janine Lewis was appointed as a non-executive director. We are
pleased to welcome Janine to the Board.
Current Trading and Outlook
Trading continues to be tough, and is at lower levels than those experienced
when economic conditions were more benign. Recent economic news from Japan has
done little to inspire confidence that the country is enjoying the same return
to growth as other countries in the region. However, our hotels continue to
generate cash even as consumers appear to be more cost conscious. This underpins
our belief that spending on leisure hotels is, for most visitors, not a luxury
but a necessity resulting from their inability to find privacy anywhere else.
1 Closing exchange rates of 132.15 yen per Sterling at 30 June 2010, 146.92 yen
per Sterling 31 December 2010 and 158.60 yen per Sterling at 30 June 2009
2 Average exchange rates of 139.62 yen per Sterling at 30 June 2010 and 142.68
yen per Sterling at 30 June 2009
The leisure hotel industry remains substantial and, in our view, relatively
stable, notwithstanding the potential impact of new regulation, which we closely
monitor. We are committed to our strategy of building and developing a portfolio
of high quality leisure hotels, ensuring that we maintain high standards of
service and value for money. The value and perception of our brand is crucial in
this regard and it is important for us to preserve the quality of the Bonita
brand, which now extends across all six hotels, and thereby safeguard our market
position. This will require a continued programme of refurbishment to ensure we
attract and retain as many customers as possible.
We continue to explore consolidation opportunities. We have stated for some
time our desire to build our portfolio through the acquisition of hotels. Many
opportunities continue to be available at low prices. Arranging suitable
finance for such opportunities remains challenging, but we believe that the
Company's unique business model and the Asset Manager's track record should
provide potential investors with suitable confidence that attractive returns are
possible. As a result, we remain cautiously optimistic about the Company's long
term growth prospects, whilst being fully mindful of the near term challenges.
Chairman
Alan Clifton
Asset Manager's Report
The Japanese Economy
The first half of 2010 has not provided any respite for the leisure hotel
industry with the macro situation continuing to provide very mixed signals on
the economy. The Japanese Consumer Confidence Index recovered from its nadir in
December 2007 of 27.7 to 43.5 in June 2010, but slipped back recently in both
July and August. Corporate investment continues to fall, machinery orders have
been weak and unemployment has recently increased. Other consumer businesses
are experiencing softer market conditions, such as the restaurant industry,
which has shown a drop in sales of 2.3% over the last 12 months, with even the
fast food sector showing weakness. Uniqlo, the bellwether for Japanese
consumers in this downturn, saw sales fall 12.4% in April. Miki Shoji, a large
Japanese real estate broker, reports that in June, Tokyo office vacancies hit an
all-time high for the fifth consecutive month, at 9.14% - the highest reading
seen since the firm starting tracking vacancy rates in 1989. These challenges
were neatly summarised by Japan's second quarter GDP numbers, which showed
anaemic growth of 0.4% for the quarter with weak private consumption offsetting
significant export growth.
The perennial problems of Japan thus continue; deflation remains a constant drag
on consumption (the Consumer Price Index for Japan in July 2010 was down 0.5%
from the previous month, and down 0.9% over the 12 months to July 2010), the
prime minister has changed once again and the new incumbent has been very vocal
in discussing new revenue generating requirements to address the fiscal deficit.
None of this is ideal to encourage spending by Japanese consumers.
If this were not enough there were a number of specific developments that
continued to provide the consumer with reason to pull in the purse strings. The
first was the bankruptcy of Japan Airlines; this caused significant uncertainty
as this was the first time that the government had allowed such a large company
go into bankruptcy. The second big business story was Toyota's massive recalls,
which had a significant impact in the Tokai region where it is based.
Against such a backdrop of low consumer spending, the leisure hotel sector
continues to show great resilience, although for Japan Leisure Hotels, the first
six months of 2010 have seen the impact of these issues which we flagged in the
2009 annual report and in our most recent statement in July. Yet, despite the
continuing economic gloom, the dynamics of the leisure hotel industry remain
compelling. Japan is a country where 80% of the population live in densely
populated cities and where multi-generational households are the norm.
The Leisure Hotel Industry
"In the land of a thousand neighbours, where mom, dad and their mom and dad and
their two children have historically resided under one roof - there has always
been the problem of finding a little personal space.."
Japanzine - July 2010
We have consistently argued that regardless of the macro economic picture there
will remain a significant underlying demand to visit leisure hotels in Japan.
Lack of privacy has spawned an industry that boasts annual revenues in the order
of JPY4 trillion (UKGBP30 billion) per year split between approximately 25,000
hotels with an average of 24 rooms per hotel.
With approximately 500 million visits made each year, this translates to over
two million Japanese visiting one of Japan's leisure hotels each and every day.
In an industry with such a fundamentally robust demand and significant size, it
would be natural to expect it to be well consolidated - but this is not the case
with the leisure hotel industry in Japan. The fragmentation of the industry
persists and, in the current environment, may even be increasing. No single
operator controls more than 100 hotels and 90% of owners own five or fewer
hotels.
It is no surprise that an industry of this size is subject to supervision by
various authorities. Each of our hotels is under the direct supervision of the
local government in which the hotel is located and is granted a licence to
operate as a hotel. In June 2010, the government published a consultation paper
on the operation of the hotel business in Japan, which was subsequently approved
by the Cabinet of the Government of Japan in early July. This new policy could
result in an increased level of supervision over our business to include a more
specific role for the police in supervising the operation of hotels.
These new regulations have been brought in with a minimum of consultation and we
are continuing to work with advisers to understand the full implications. At
this stage we do not expect this to have any material impact on our business but
we will not be able to fully evaluate this until enforcement starts in January
2011.
Financial Results
Presented below are statements of the Group's EBITDA3, based on unaudited
figures, for the six months ended 30 June 2010.
+--------------------+-----------+-----------+-----------+-----------+-----------+-----------+
| | Portfolio | Yokkaichi | Total portfolio |
| | excluding | | |
| | Yokkaichi | | |
+--------------------+-----------------------+-----------------------+-----------------------+
| | 6 months ended | 6 months | 6 months ended |
| | | ended | |
+--------------------+-----------------------+-----------------------+-----------------------+
| | 30 June | 30 June | 30 June |
+--------------------+-----------------------+-----------------------+-----------------------+
| | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 |
+--------------------+-----------+-----------+-----------+-----------+-----------+-----------+
| | JPJPY'000 | JPJPY'000 | JPJPY'000 | JPJPY'000 | JPJPY'000 | JPJPY'000 |
+--------------------+-----------+-----------+-----------+-----------+-----------+-----------+
| Revenue | 499,800 | 540,615 | 16,827 | 50,047 | 516,627 | 590,662 |
+--------------------+-----------+-----------+-----------+-----------+-----------+-----------+
| Variable operating | (261,148) | (272,842) | (23,717) | (32,281) | (284,865) | (305,123) |
| expenses | | | | | | |
+--------------------+-----------+-----------+-----------+-----------+-----------+-----------+
| Fixed operating | (94,393) | (101,707) | (15,414) | (17,071) | (109,807) | (118,778) |
| expenses | | | | | | |
+--------------------+-----------+-----------+-----------+-----------+-----------+-----------+
| EBITDA | 144,259 | 166,066 | (22,304) | 695 | 121,955 | 166,761 |
+--------------------+-----------+-----------+-----------+-----------+-----------+-----------+
The difference between the total EBITDA above and the operating loss per the
Consolidated Statement of Comprehensive Income on page 10 is depreciation and
amortisation of JPJPY116 million, operating expenses of the Guernsey companies
of JPJPY21 million and other expenses of JPJPY4 million. The cash flow from
operations of the hotels in the six months ended 30 June 2009 was JPJPY88
million, which is less than EBITDA due to taxes paid of JPJPY22 million and an
increase in working capital.
The notable features of the EBITDA figures are the decreased revenues but the
level of decline was not the same at every hotel. The closure of Yokkaichi for
renovation was a major factor and is discussed in more detail below. A
significant portion of operating costs at Yokkaichi also continued throughout
the renovation. The EBITDA margin on the other five hotels barely moved, but the
decline in occupancy (noted below) did have an impact on the amount of EBITDA
for those hotels and their operating cash flow.
3 EBITDA comprises earnings before interest, tax, depreciation and amortization
and excludes the operating expenses of the Guernsey companies
The following key performance indicators further illustrate the performance of
the portfolio excluding Yokkaichi:
+------------+-------------+-------------+-------------+---------+---------+-------------+
| | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 |
| | | | | | | (1st |
| | | | | | | half) |
+------------+-------------+-------------+-------------+---------+---------+-------------+
| REVPAR | JPJPY10,506 | JPJPY15,350 | JPJPY16,572 | JPJPY | JPJPY | JPJPY14,239 |
| | | | | 16,206 | 15,443 | |
+------------+-------------+-------------+-------------+---------+---------+-------------+
| Occupancy | 160% | 239% | 254% | 257% | 242% | 230% |
| rate | | | | | | |
+------------+-------------+-------------+-------------+---------+---------+-------------+
| EBITDA | (43.5)% | 25.5% | 28.7% | 27.5% | 29.42% | 28.86% |
| Margin 4 | | | | | | |
| and 5 | | | | | | |
+------------+-------------+-------------+-------------+---------+---------+-------------+
4 EBITDA margin is EBITDA expressed as a percentage of revenue
5 The EDITDA margin of the portfolio excluding Yokkaichi fell from 30.6% in the
first half of 2009 to 28.9% in the first half of 2010. Excluding asset manager
fees, EBITDA margin of the portfolio excluding Yokkaichi declined from 39.5% to
38.0%
Operating Commentary
It is clear from the numbers above that this was a very challenging period for
the business. The previous trend of guests choosing smaller cheaper rooms
continued, which is amply illustrated by the significant fall in REVPAR versus
the smaller drop in occupancy.
The re-branding and opening of Yokkaichi is a significant milestone for the
portfolio as it was the culmination of almost two years planning and a very
intensive four months of work while the hotel was closed. The physical
renovation was completed on time and under budget and utilised a significant
amount of directly imported goods to reduce the cost and improve overall
performance. The other feature of the renovation was that it is the
first location where we installed our own property management system, which has
been developed specifically for our business. JPLH has maintained all
proprietary rights to the software and it has been developed to improve the
overall operating performance of all our hotels, focussing not only on guest
experience but also employee productivity and energy conservation. With so many
new systems being implemented, there have been inevitable troubles ironing out
teething issues but these have now mostly been eradicated.
Although the scale of the decline in occupancy differed between hotels, all
hotels did experience a fall: in addition customers are selecting lower price
rooms from available categories to an even greater degree than seen in 2009.
Competitor hotels, many of which are already cheaper, are cutting their prices,
putting all hotels under pressure to follow suit. Nevertheless, our surveys of
competitor hotels do not indicate any big changes in market share, indicating
that the decline in occupancy reflects a broader decline in demand.
We have sought to be proactive in managing our position in the market and have
completed a revision of our pricing which has resulted in a flatter price
structure.
As a whole, the portfolio's variable costs fell by 6.9% from last year. This was
not sufficient to keep pace with the fall in revenue, but it does track closely
the reduction in occupancy. The new food and beverage Grand Menu was introduced
in all hotels at the end of March, and centralised purchasing has now been
implemented at all hotels, leading to a reduction in food and beverage costs.
The Current Opportunity
The financial crisis continues to impact the leisure hotel industry, although we
believe there will continue to be a strong underlying level of demand given the
demographic and cultural background to the industry. More hotels are up for sale
and being seen in the auction system, but added to this is the additional
uncertainty of new regulation. We are already being approached by a number of
owners of primarily single properties who are seeking to exit due to the
anticipated increased scrutiny.
These businesses are generally sound but are facing refinancing issues in the
current environment or are in need of significant capital investment.
Consolidation and the resulting economies of scale both from an operational and
a compliance perspective would allow a larger group to provide significantly
better value to its guests and thus increase competitive pressures on the
smaller operators. This would ultimately allow the larger operators
significantly greater pricing power.
Opportunities therefore still exist to build up critical mass and scale through
consolidation of an industry, which, in spite of the economic difficulties
facing Japan, nevertheless remains significant and offers the prospect of
healthy returns for an operator with the requisite skills and experience. This
would, in turn, enhance the profile of the business, thereby creating a virtuous
circle of growing sales through greater brand awareness and increasing cash
inflow enabling further expansion through debt financing.
Outlook
Underlying demand for leisure hotels remains robust in the face of economic
difficulties. We have consistently referred to the ongoing opportunities that
are available for a well managed portfolio of hotels to generate significant
cash flows. New Perspective continues to pursue its strategy for consolidation
which will allow for rapid expansion in a structured and controlled environment.
Even in the face of desperate price cutting by some of our competitors, we will
steadfastly defend our prices by providing superior comfort and services to our
guests. Short term operational issues, which are being quickly resolved, should
not detract from our record of maintaining revenues in a deflationary
environment, growing guest numbers and improving the free cash flow from our
portfolio. Yokkaichi is on track to further establish the Bonita brand and
differentiate it from the rest of the market and once again proves our ability
to successfully renovate and re-brand a hotel on time and within budget. This
should give both existing and potential new investors comfort that we have the
skills and capacity to execute our strategy and deliver long term value.
Independent Review Report to the Members of Japan Leisure Hotels Limited
Introduction
We have been engaged by the Company to review the condensed
unaudited set of financial statements in the half-yearly report for the six
months ended 30 June 2010 which comprises the Condensed Consolidated Interim
Statement of Comprehensive Income,, the Condensed Consolidated Interim Statement
of Changes in Equity, Condensed Consolidated Interim Statement of Financial
Position, Condensed Consolidated Interim Statement of Cash Flows and related
notes 1 to 13. We have read the other information contained in the interim
report and considered whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of financial
statements.
Directors' Responsibility
The interim report is the responsibility of, and has been approved by, the
directors. As disclosed in note 3, the annual financial statements of the Group
are prepared in accordance with International Financial Reporting Standards
(IFRSs) as adopted by the European Union. The condensed set of financial
statements included in this half-yearly financial report has been prepared in
accordance with International Accounting Standard 34, "Interim Financial
Reporting", as adopted by the European Union.
Our Responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the interim 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 on the 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 authorized to do so by our prior written
consent. Save as above, we do not accept responsibility for this report to any
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 Auditing
Practices Board 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 Ireland) 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 interim financial report
for the six months ended 30 June 2010 is not prepared, in all material respects,
in accordance with the basis of preparation as set out in note 3 and in
accordance with the AIM rules issued by the London Stock Exchange.
BDO Limited
Chartered Accountants
Place du Pre, Rue du Pre
St
Peter Port, Guernsey
27 September 2010
Condensed Consolidated Interim Statement of Comprehensive Income
For the six months ended 30 June 2010
+-----------+----------+-----------+------+------------+-------+--------------------------+----------+-------------------------+
| | For the six months ended |
+ +---------------------------------------------------------------+
| | 30 June | | 30 June |
| | 2010 | | 2009 |
+ +--------------------------+----------+-------------------------+
| | Unaudited | | Unaudited |
| | | | |
+ +--------------------------+----------+-------------------------+
| | | | Restated |
+--------------------------------------------------------------+--------------------------+----------+-------------------------+
| | | | | |Notes | JPJPY'000 | | JPJPY'000 |
+-----------+----------+-----------+------+------------+-------+--------------------------+----------+-------------------------+
| Revenue | | | | | | 515,371 | | 590,662 |
+-----------+----------+-----------+------+------------+-------+--------------------------+----------+-------------------------+
| Total Revenue | | | | | 515,371 | | 590,662 |
+----------------------+-----------+------+------------+-------+--------------------------+----------+-------------------------+
| | | | | | | | | |
+-----------+----------+-----------+------+------------+-------+--------------------------+----------+-------------------------+
| Raw materials and consumables | | | | (50,205) | | (55,273) |
+----------------------------------+------+------------+-------+--------------------------+----------+-------------------------+
| Personnel costs | | | | | (126,219) | | (137,200) |
+----------------------+-----------+------+------------+-------+--------------------------+----------+-------------------------+
| Depreciation and amortisation | | | | (116,256) | | (114,868) |
+----------------------------------+------+------------+-------+--------------------------+----------+-------------------------+
| Other expenses | | | | | (241,832) | | (270,081) |
+----------------------+-----------+------+------------+-------+--------------------------+----------+-------------------------+
| | | | | | | (534,512) | | (577,422) |
+-----------+----------+-----------+------+------------+-------+--------------------------+----------+-------------------------+
| | | | | | | | | |
+-----------+----------+-----------+------+------------+-------+--------------------------+----------+-------------------------+
| (Loss)/profit on operations | | | | (19,141) | | 13,240 |
+----------------------------------+------+------------+-------+--------------------------+----------+-------------------------+
| | | | | | | | | |
+-----------+----------+-----------+------+------------+-------+--------------------------+----------+-------------------------+
| Net loss on sale of tangible | | | | (13,772) | | |
| assets | | | | | | - |
+----------------------------------+------+------------+-------+--------------------------+----------+-------------------------+
| Other income | | | | | 1,130 | | |
| | | | | | | | - |
+----------------------+-----------+------+------------+-------+--------------------------+----------+-------------------------+
| | | | | | | | | |
+-----------+----------+-----------+------+------------+-------+--------------------------+----------+-------------------------+
| Net foreign exchange | | | | (4,117) | | 681 |
| (losses)/profit | | | | | | |
+----------------------------------+------+------------+-------+--------------------------+----------+-------------------------+
| Finance income | | | | | 54 | | 217 |
+----------------------+-----------+------+------------+-------+--------------------------+----------+-------------------------+
| Net finance (costs)/income | | | | (4,063) | | 898 |
+----------------------------------+------+------------+-------+--------------------------+----------+-------------------------+
| | | | | | | | | |
+-----------+----------+-----------+------+------------+-------+--------------------------+----------+-------------------------+
| (Loss)/profit before taxation | | | | (35,846) | | 14,138 |
+----------------------------------+------+------------+-------+--------------------------+----------+-------------------------+
| | | | | | | | | |
+-----------+----------+-----------+------+------------+-------+--------------------------+----------+-------------------------+
| Taxation charge | | | | 6 | (8,026) | | (11,388) |
+----------------------+-----------+------+------------+-------+--------------------------+----------+-------------------------+
| | | | | | | | | |
+-----------+----------+-----------+------+------------+-------+--------------------------+----------+-------------------------+
| (Loss)/profit for the period | | | | (43,872) | | 2,750 |
+----------------------------------+------+------------+-------+--------------------------+----------+-------------------------+
| | | | | | | | | |
+-----------+----------+-----------+------+------------+-------+--------------------------+----------+-------------------------+
| Total comprehensive (loss)/income for the period | (43,872) | | 2,750 |
+--------------------------------------------------------------+--------------------------+----------+-------------------------+
| | | | | | | | | |
+-----------+----------+-----------+------+------------+-------+--------------------------+----------+-------------------------+
| (Loss)/profit and total comprehensive income attributable | | | |
| to: | | | |
+--------------------------------------------------------------+--------------------------+----------+-------------------------+
| Owners of the Company | (43,622) | | 1,267 |
+--------------------------------------------------------------+--------------------------+----------+-------------------------+
| Non-controlling interest | (250) | | 1,483 |
+--------------------------------------------------------------+--------------------------+----------+-------------------------+
| Total (loss)/profit for the period | (43,872) | | 2,750 |
+--------------------------------------------------------------+--------------------------+----------+-------------------------+
| | | | |
+--------------------------------------------------------------+--------------------------+----------+-------------------------+
| | | | |
+--------------------------------------------------------------+--------------------------+----------+-------------------------+
| | | | |
+--------------------------------------------------------------+--------------------------+----------+-------------------------+
| Basic (loss)/earnings per share (Yen) | 7 | (0.99) | | 0.03 |
+------------------------------------------------------+-------+--------------------------+----------+-------------------------+
| Diluted (loss)/earnings per share (Yen) | 7 | (0.77) | | 0.02 |
+------------------------------------------------------+-------+--------------------------+----------+-------------------------+
| Adjusted (loss)/earnings per share - basic (Yen) | 7 | (0.99) | | 0.03 |
+------------------------------------------------------+-------+--------------------------+----------+-------------------------+
| Adjusted (loss)/earnings per share - diluted (Yen) | 7 | (0.77) | | 0.02 |
+-----------+----------+-----------+------+------------+-------+--------------------------+----------+-------------------------+
All items in the above statement are derived from continuing operations.
The accompanying notes form an integral part of these consolidated interim
financial statements.
Condensed Consolidated Interim Statement of Financial Position
At 30 June 2010
+-------------+--------+--------+--------+--------+-------------------------+--------+------------------------+--------+-------------------------+
| | | | | | 30 | | 31 December | 30 |
| | | | | | June | | 2009 | June |
| | | | | | 2010 | | | 2009 |
+-------------+--------+--------+--------+--------+-------------------------+--------+---------------------------------+-------------------------+
| | | | | | Unaudited | | Audited | | Unaudited |
+-------------+--------+--------+--------+--------+-------------------------+--------+------------------------+--------+-------------------------+
| | | | | | | | | | Restated |
+-------------+--------+--------+--------+--------+-------------------------+--------+------------------------+--------+-------------------------+
| | | | | Notes | JPJPY'000 | | JPJPY'000 | | JPJPY'000 |
+-------------+--------+--------+--------+--------+-------------------------+--------+------------------------+--------+-------------------------+
| Assets | | | | | | | | | |
+-------------+--------+--------+--------+--------+-------------------------+--------+------------------------+--------+-------------------------+
| Non-current | | | | | | | | |
| assets | | | | | | | | |
+----------------------+--------+--------+--------+-------------------------+--------+------------------------+--------+-------------------------+
| Property, plant and | | 8 | 5,158,954 | | 4,899,264 | | 4,975,240 |
| equipment | | | | | | | |
+-------------------------------+--------+--------+-------------------------+--------+------------------------+--------+-------------------------+
| Intangible | | | 9 | 56,588 | | 32,883 | | 25,633 |
| assets | | | | | | | | |
+----------------------+--------+--------+--------+-------------------------+--------+------------------------+--------+-------------------------+
| Rental deposits | | | | 3,220 | | 3,220 | | 3,220 |
+----------------------+--------+--------+--------+-------------------------+--------+------------------------+--------+-------------------------+
| Deposits with | | | | 1,000 | | | | |
| suppliers | | | | | | - | | - |
+----------------------+--------+--------+--------+-------------------------+--------+------------------------+--------+-------------------------+
| | | | | | 5,219,762 | | 4,935,367 | | 5,004,093 |
+-------------+--------+--------+--------+--------+-------------------------+--------+------------------------+--------+-------------------------+
| Current assets | | | | | | | | |
+----------------------+--------+--------+--------+-------------------------+--------+------------------------+--------+-------------------------+
| Inventories | | | | | 16,122 | | 21,971 | | 22,182 |
+-------------+--------+--------+--------+--------+-------------------------+--------+------------------------+--------+-------------------------+
| Trade and other | | | 33,272 | | 17,874 | | 14,996 |
| receivables | | | | | | | |
+-------------------------------+--------+--------+-------------------------+--------+------------------------+--------+-------------------------+
| Cash and cash | | | 139,556 | | 413,424 | | 326,956 |
| equivalents | | | | | | | |
+-------------------------------+--------+--------+-------------------------+--------+------------------------+--------+-------------------------+
| | | | | | 188,950 | | 453,269 | | 364,134 |
+-------------+--------+--------+--------+--------+-------------------------+--------+------------------------+--------+-------------------------+
| Total assets | | | | 5,408,712 | | 5,388,636 | | 5,368,227 |
+----------------------+--------+--------+--------+-------------------------+--------+------------------------+--------+-------------------------+
| | | | | | | | | | |
+-------------+--------+--------+--------+--------+-------------------------+--------+------------------------+--------+-------------------------+
| Liabilities | | | | | | | | |
+----------------------+--------+--------+--------+-------------------------+--------+------------------------+--------+-------------------------+
| Current | | | | | | | | |
| liabilities | | | | | | | | |
+----------------------+--------+--------+--------+-------------------------+--------+------------------------+--------+-------------------------+
| Trade and other payables | | | 206,129 | | 135,578 | | 129,154 |
+-------------------------------+--------+--------+-------------------------+--------+------------------------+--------+-------------------------+
| | | | | | | | | | |
+-------------+--------+--------+--------+--------+-------------------------+--------+------------------------+--------+-------------------------+
| Non-current | | | | | | | | |
| liabilities | | | | | | | | |
+----------------------+--------+--------+--------+-------------------------+--------+------------------------+--------+-------------------------+
| Deferred tax | | | 6 | 197,527 | | 203,749 | | 207,949 |
| liabilities | | | | | | | | |
+----------------------+--------+--------+--------+-------------------------+--------+------------------------+--------+-------------------------+
| Other long-term payables | | | 917 | | 1,298 | | 687 |
+-------------------------------+--------+--------+-------------------------+--------+------------------------+--------+-------------------------+
| | | | | | 198,444 | | 205,047 | | 208,636 |
+-------------+--------+--------+--------+--------+-------------------------+--------+------------------------+--------+-------------------------+
| Total | | | | 404,573 | | 340,625 | | 337,790 |
| liabilities | | | | | | | | |
+----------------------+--------+--------+--------+-------------------------+--------+------------------------+--------+-------------------------+
| Total net | | | | 5,004,139 | | 5,048,011 | | 5,030,437 |
| assets | | | | | | | | |
+----------------------+--------+--------+--------+-------------------------+--------+------------------------+--------+-------------------------+
| | | | | | | | | | |
+-------------+--------+--------+--------+--------+-------------------------+--------+------------------------+--------+-------------------------+
| Equity | | | | | | | | | |
+-------------+--------+--------+--------+--------+-------------------------+--------+------------------------+--------+-------------------------+
| Share capital | | | | 97,121 | | 97,121 | | 97,121 |
+----------------------+--------+--------+--------+-------------------------+--------+------------------------+--------+-------------------------+
| Distributable | | | | 4,365,514 | | 4,365,514 | | 4,365,514 |
| reserve | | | | | | | | |
+----------------------+--------+--------+--------+-------------------------+--------+------------------------+--------+-------------------------+
| Retained | | | | 511,598 | | 555,220 | | 538,682 |
| earnings | | | | | | | | |
+----------------------+--------+--------+--------+-------------------------+--------+------------------------+--------+-------------------------+
| Equity attributable to | | | | | | |
| shareholders of the Company | | | | | | |
+ +--------+-------------------------+--------+------------------------+--------+-------------------------+
| | | 4,974,233 | | 5,017,855 | | 5,001,317 |
+----------------------------------------+--------+-------------------------+--------+------------------------+--------+-------------------------+
| | | | | | | | | | |
+-------------+--------+--------+--------+--------+-------------------------+--------+------------------------+--------+-------------------------+
| Non-controlling interest | | | 29,906 | | 30,156 | | 29,120 |
+-------------------------------+--------+--------+-------------------------+--------+------------------------+--------+-------------------------+
| | | | | | | | | | |
+-------------+--------+--------+--------+--------+-------------------------+--------+------------------------+--------+-------------------------+
| Total equity | | | | 5,004,139 | | 5,048,011 | | 5,030,437 |
+----------------------+--------+--------+--------+-------------------------+--------+------------------------+--------+-------------------------+
| Net asset value per | | 10 | JPJPY113.47 | | JPJPY114.47 | | JPJPY114.07 |
| share | | | | | | | |
+-------------+--------+--------+--------+--------+-------------------------+--------+------------------------+--------+-------------------------+
These financial statements were approved by the Board of Directors and
authorised for issue on 27 September 2010.
Janine Lewis
Sarah Evans
Director
Director
The accompanying notes form an integral part of these consolidated interim
financial statements.
Condensed Consolidated Interim Statement of Changes in Equity
For the six months ended 30 June 2010
+---------------+-------------------+------------------+-------------------+-------------------+-------------------+-------------------+
| For the six | | | | | |
| months ended 30 | | | | | |
| June 2010 | | | | | |
| (Unaudited) | | | | | |
+-----------------------------------+------------------+-------------------+-------------------+-------------------+-------------------+
| | | | | | | |
+---------------+-------------------+------------------+-------------------+-------------------+-------------------+-------------------+
| | Share | Distributable | Retained | Total | Non-controlling | Total |
| | capital | reserve | earnings | shareholders' | interest | |
| | | | | equity | | |
+---------------+-------------------+------------------+-------------------+-------------------+-------------------+-------------------+
| | | | | | | |
+---------------+-------------------+------------------+-------------------+-------------------+-------------------+-------------------+
| | JPJPY'000 | JPJPY'000 | JPJPY'000 | JPJPY'000 | JPJPY'000 | JPJPY'000 |
+---------------+-------------------+------------------+-------------------+-------------------+-------------------+-------------------+
| | | | | | | |
+---------------+-------------------+------------------+-------------------+-------------------+-------------------+-------------------+
| At 1 | 97,121 | 4,365,514 | 555,220 | 5,017,855 | 30,156 | 5,048,011 |
| January | | | | | | |
| 2010 | | | | | | |
+---------------+-------------------+------------------+-------------------+-------------------+-------------------+-------------------+
| | | | | | | |
+---------------+-------------------+------------------+-------------------+-------------------+-------------------+-------------------+
| Total | - | | (43,622) | (43,622) | (250) | (43,872) |
| comprehensive | | - | | | | |
| loss for the | | | | | | |
| period | | | | | | |
+---------------+-------------------+------------------+-------------------+-------------------+-------------------+-------------------+
| | | | | | | |
+---------------+-------------------+------------------+-------------------+-------------------+-------------------+-------------------+
| At 30 | 97,121 | 4,365,514 | 511,598 | 4,974,233 | 29,906 | 5,004,139 |
| June | | | | | | |
| 2010 | | | | | | |
+---------------+-------------------+------------------+-------------------+-------------------+-------------------+-------------------+
| | | | | | | |
+---------------+-------------------+------------------+-------------------+-------------------+-------------------+-------------------+
| | | | | | | |
+---------------+-------------------+------------------+-------------------+-------------------+-------------------+-------------------+
| | | | | | | |
+---------------+-------------------+------------------+-------------------+-------------------+-------------------+-------------------+
| | | | | | | |
+---------------+-------------------+------------------+-------------------+-------------------+-------------------+-------------------+
| For the six months ended | | | | |
| 30 June 2009 (Unaudited) | | | | |
| restated | | | | |
+------------------------------------------------------+-------------------+-------------------+-------------------+-------------------+
| | | | | | | |
+---------------+-------------------+------------------+-------------------+-------------------+-------------------+-------------------+
| | Share | Distributable | Retained | Total | Non-controlling | Total |
| | capital | reserve | earnings | shareholders' | interest | |
| | | | | equity | | |
+---------------+-------------------+------------------+-------------------+-------------------+-------------------+-------------------+
| | Restated | Restated | Restated | Restated | Restated | Restated |
+---------------+-------------------+------------------+-------------------+-------------------+-------------------+-------------------+
| | JPJPY'000 | JPJPY'000 | JPJPY'000 | JPJPY'000 | JPJPY'000 | JPJPY'000 |
+---------------+-------------------+------------------+-------------------+-------------------+-------------------+-------------------+
| | | | | | | |
+---------------+-------------------+------------------+-------------------+-------------------+-------------------+-------------------+
| At 1 | 97,121 | 4,365,514 | 771,528 | 5,234,163 | 27,637 | 5,261,800 |
| January | | | | | | |
| 2009 | | | | | | |
+---------------+-------------------+------------------+-------------------+-------------------+-------------------+-------------------+
| Restatement | | | | | | |
| as per | | | | | | |
| Annual | | | | | | |
| Report 31 | | | | | | |
| December | | | | | | |
| 2009 | | | | | | |
+ +-------------------+------------------+-------------------+-------------------+-------------------+-------------------+
| | | | (234,113) | (234,113) | | (234,113) |
| | - | - | | | - | |
+---------------+-------------------+------------------+-------------------+-------------------+-------------------+-------------------+
| | | | | | | |
+---------------+-------------------+------------------+-------------------+-------------------+-------------------+-------------------+
| Restated | 97,121 | 4,365,514 | 537,415 | 5,000,050 | 27,637 | 5,027,687 |
| balance | | | | | | |
| at 1 | | | | | | |
| January | | | | | | |
| 2009 | | | | | | |
+---------------+-------------------+------------------+-------------------+-------------------+-------------------+-------------------+
| | | | | | | |
+---------------+-------------------+------------------+-------------------+-------------------+-------------------+-------------------+
| Total | | | (17,494) | (17,494) | 1,483 | (16,011) |
| comprehensive | - | - | | | | |
| loss for the | | | | | | |
| period | | | | | | |
+---------------+-------------------+------------------+-------------------+-------------------+-------------------+-------------------+
| | | | | | | |
+---------------+-------------------+------------------+-------------------+-------------------+-------------------+-------------------+
| Restatement | | | 18,761 | 18,761 | | 18,761 |
| (note 4) | - | - | | | - | |
+---------------+-------------------+------------------+-------------------+-------------------+-------------------+-------------------+
| | | | | | | |
+---------------+-------------------+------------------+-------------------+-------------------+-------------------+-------------------+
| At 30 | 97,121 | 4,365,514 | 538,682 | 5,001,317 | 29,120 | 5,030,437 |
| June | | | | | | |
| 2009 | | | | | | |
+---------------+-------------------+------------------+-------------------+-------------------+-------------------+-------------------+
The accompanying notes form an integral part of these consolidated interim
financial statements.
Condensed Consolidated Interim Statement of Cash Flows
For the six months ended 30 June 2010
+--------+--------+--------+--------+--------+--------+--------------------------+--------+-------------------------+
| | | | | | | For the six months ended |
| | | | | | | |
+--------+--------+--------+--------+--------+--------+-------------------------------------------------------------+
| | | | | | | 30 | | 30 |
| | | | | | | June | | June |
| | | | | | | 2010 | | 2009 |
+--------+--------+--------+--------+--------+--------+--------------------------+--------+-------------------------+
| | | | | | | Unaudited | | Unaudited |
+--------+--------+--------+--------+--------+--------+--------------------------+--------+-------------------------+
| | | | | | | | | Restated |
+--------+--------+--------+--------+--------+--------+--------------------------+--------+-------------------------+
| | | | | | | JPJPY'000 | | JPJPY'000 |
+--------+--------+--------+--------+--------+--------+--------------------------+--------+-------------------------+
| Cash flows from operating | | | | | |
| activities | | | | | |
+-----------------------------------+--------+--------+--------------------------+--------+-------------------------+
| (Loss)/profit before taxation | | | (35,846) | | 14,138 |
+-----------------------------------+--------+--------+--------------------------+--------+-------------------------+
| | | | | | | | | |
+--------+--------+--------+--------+--------+--------+--------------------------+--------+-------------------------+
| Adjustments for: | | | | | |
+-----------------------------------+--------+--------+--------------------------+--------+-------------------------+
| | Depreciation and amortisation | | 116,256 | | 114,868 |
+--------+-----------------------------------+--------+--------------------------+--------+-------------------------+
| | Finance income | | | | (54) | | (217) |
+--------+-----------------+--------+--------+--------+--------------------------+--------+-------------------------+
| | Loss on disposal of | | | 13,772 | | - |
| | assets | | | | | |
+--------+--------------------------+--------+--------+--------------------------+--------+-------------------------+
| | Decrease in deferred | | | (118) | | (1,026) |
| | income | | | | | |
+--------+--------------------------+--------+--------+--------------------------+--------+-------------------------+
| | | | 16,560 | | 22,278 |
| Changes in working capital | | | | | |
+-----------------------------------+--------+--------+--------------------------+--------+-------------------------+
| Cash inflows from operations | | 110,570 | | 150,041 |
+--------------------------------------------+--------+--------------------------+--------+-------------------------+
| | | | | | | | | |
+--------+--------+--------+--------+--------+--------+--------------------------+--------+-------------------------+
| Interest | | | | | 54 | | 217 |
| received | | | | | | | |
+-----------------+--------+--------+--------+--------+--------------------------+--------+-------------------------+
| Tax paid | | | | | (22,136) | | (31,677) |
+-----------------+--------+--------+--------+--------+--------------------------+--------+-------------------------+
| Net cash from operating | | | 88,488 | | 118,581 |
| activities | | | | | |
+-----------------------------------+--------+--------+--------------------------+--------+-------------------------+
| | | | | | | | | |
+--------+--------+--------+--------+--------+--------+--------------------------+--------+-------------------------+
| Cash flows from investing | | | | | |
| activities | | | | | |
+-----------------------------------+--------+--------+--------------------------+--------+-------------------------+
| Net purchase of property, plant and | | (336,762) | | (23,539) |
| equipment | | | | |
+--------------------------------------------+--------+--------------------------+--------+-------------------------+
| Purchase of intangible assets | | | (24,208) | | (20,899) |
+-----------------------------------+--------+--------+--------------------------+--------+-------------------------+
| Purchase of freehold | | | | (5) | | (10,756) |
| land | | | | | | |
+--------------------------+--------+--------+--------+--------------------------+--------+-------------------------+
| Decrease in deposits on rented | | | - | | 200 |
| land | | | | | |
+-----------------------------------+--------+--------+--------------------------+--------+-------------------------+
| Increase in deposits with | | | (1,000) | | |
| suppliers | | | | | - |
+-----------------------------------+--------+--------+--------------------------+--------+-------------------------+
| Net cash used in investing | | | (361,975) | | (54,994) |
| activities | | | | | |
+-----------------------------------+--------+--------+--------------------------+--------+-------------------------+
| | | | | | | | | |
+--------+--------+--------+--------+--------+--------+--------------------------+--------+-------------------------+
| Cash flows from financing | | | | | |
| activities | | | | | |
+-----------------------------------+--------+--------+--------------------------+--------+-------------------------+
| Decrease in other long-term | | | (381) | | - |
| payables | | | | | |
+-----------------------------------+--------+--------+--------------------------+--------+-------------------------+
| Net cash used in financing | | | (381) | | - |
| activities | | | | | |
+-----------------------------------+--------+--------+--------------------------+--------+-------------------------+
| | | | | | | | | |
+--------+--------+--------+--------+--------+--------+--------------------------+--------+-------------------------+
| Net (decrease)/increase in cash and cash | | (273,868) | | 63,587 |
| equivalents | | | | |
+--------------------------------------------+--------+--------------------------+--------+-------------------------+
| | | | | | | | | |
+--------+--------+--------+--------+--------+--------+--------------------------+--------+-------------------------+
| Balance at the beginning of the period | | 413,424 | | 263,369 |
+--------------------------------------------+--------+--------------------------+--------+-------------------------+
| | | | | | | | | |
+--------+--------+--------+--------+--------+--------+--------------------------+--------+-------------------------+
| Balance at the end of the period | | | 139,556 | | 326,956 |
+--------+--------+--------+--------+--------+--------+--------------------------+--------+-------------------------+
The accompanying notes form an integral part of these consolidated interim
financial statements.
Notes to the Consolidated Financial Statements (unaudited)
For the six months ended 30 June 2010
1. General Information
Japan Leisure Hotels Limited was incorporated in Guernsey on 17 October 2007 and
commenced operations on 7 January 2008. The Company is a closed ended investment
company registered under the provisions of The Companies (Guernsey) Law, 2008.
The address of the registered office is given in the Management and
Administration section at the beginning of this report. The Company has been
established to derive cash flow and capital gains by investing in Japanese
leisure hotels.
The Company was listed and admitted to trading on AIM, the market of that name
operated by the London Stock Exchange, on 16 January 2008 (the "Placing"). On
admission 44,100,000 shares were issued at GBP0.50 per share resulting in gross
proceeds of GBP22,050,000.
2. Group Structure
The Group comprises the Company, its wholly-owned subsidiaries and those special
purpose entities ('SPEs') which invest in hotels in Japan. The funds raised in
the Placing have been invested through wholly-owned subsidiary companies of the
Company, which are also Guernsey registered companies: JLH 1 Limited and JLH 2
Limited (the 'Subsidiaries').
The hotels and other assets are owned by SPEs all of which are Japanese
corporations. The Company, through its Subsidiaries, has invested in the SPEs
by entering into Tokumei Kumiai agreements ('TK Agreements'). A TK Agreement is
a contractual relationship whereby one party, the 'TK Investor', agrees to
contribute capital to the other party, the 'TK Operator' or SPE, to undertake an
agreed business and receives a share of the economic benefits of investment in
that business. The TK Investor's investment is referred to herein as its 'TK
Interest'. Further information regarding the group structure is available on
the Company's website www.japanleisurehotels.com.
3. Basis of preparation
The annual financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted by the European
Union under the historical cost convention.
The condensed interim financial statements have been prepared in accordance with
International Accounting Standard (IAS) 34 "Interim Financial Reporting", as
adopted by the European Union. The condensed interim financial statements do not
include all the information and disclosures required in annual financial
statements, and should be read in conjunction with the Group's annual financial
statements for the year ended 31 December 2009.
The accounting policies applied by the Group in these condensed interim
consolidated financial statements are the same as those applied by the Group in
its consolidated financial statements for the year ended 31 December 2009.
The financial statements have been prepared in Japanese Yen, which is the
functional and presentational currency of the Group and under the historical
cost convention. The numbers have been rounded to the nearest thousand.
Exchange rates applied for the Japanese Yen to Sterling as per 30 June 2010
132.15:1 (31 December 2009 146.92:1 and 30 June 2009 158.60:1).
The preparation of the condensed financial statements requires Directors to make
estimates and assumptions that affect the reported amounts of revenues,
expenses, assets and liabilities, and the disclosure of contingent liabilities
at the date of the condensed financial statements. If in the future such
estimates and assumptions, which are based on the Directors' best judgement at
the date of the condensed financial statements, deviate from actual
circumstances, the original estimates and assumptions will be modified as
appropriate in the period in which the circumstances change.
In preparing these condensed financial statements, the significant judgements
made by management in applying the Group's accounting policies and the key
sources of estimating uncertainty were the same as those that applied to the
consolidated financial statements as at and for the year ended 31 December 2009.
The Directors believe that the new and amended IFRSs and interpretations, which
are in issue but not yet operative or adopted by the Company, will not have a
material impact on the interim condensed unaudited financial statements of the
Company.
4. Restatement of prior period figures
Tax expense and deferred taxation have been restated for the six months ended
2009 as detailed below.
The taxation expense included in the 30 June 2009 Interim Report was reported as
JPJPY30,149,000. On completion of this Interim Report this has been changed to
JPJPY11,388,000. Accordingly the profit for the six months ended 30 June 2009
has been increased by JPJPY18,761,000.
The reason for the restatement is that in the past, tax liability was only
recognised when profits that are subject to Japanese withholding tax were
distributed by the SPEs to the holding companies. The Board has reviewed this
policy and has decided that it is more prudent to recognise the tax liability
when the profit occurs.
In addition the purchase of SPEs at a discount to their net value gave rise to
negative goodwill which has now been adjusted for deferred taxation. The amount
of this adjustment arises from the difference between the Japanese tax base and
the carrying value of the net assets as at acquisition date. The negative
goodwill included in the 31 December 2008 Annual Report was reported as
JPJPY801,250,000. On completion of the 2009 Annual Report this was changed to
JPJPY586,946,000.
The table below shows the effect of these restatements on the results of the
Company for the period ended 30 June 2009:
+--------+--------+--------+--------+--------+--------+--------+-----------------------------+--------+--------------------------------+--------+-----------------------------+
| | | | | | | | As per | | Change from | As |
| | | | | | | | Interim | | Interim Report | restated |
| | | | | | | | Report | | 2009 | in this |
| | | | | | | | 2009 | | | report |
+--------+--------+--------+--------+--------+--------+--------+ +--------+ + +
| | | | | | | | | | | |
+--------+--------+--------+--------+--------+--------+--------+-----------------------------+--------+-----------------------------------------+-----------------------------+
| Restated item | | | | JPJPY'000 | | JPJPY'000 | | JPJPY'000 |
+-----------------------------------+--------+--------+--------+-----------------------------+--------+--------------------------------+--------+-----------------------------+
| Taxation | | | | (30,149) | | 18,761 | | (11,388) |
+-----------------------------------+--------+--------+--------+-----------------------------+--------+--------------------------------+--------+-----------------------------+
| (Loss)/profit for the period | | | (16,011) | | 18,761 | | 2,750 |
+--------------------------------------------+--------+--------+-----------------------------+--------+--------------------------------+--------+-----------------------------+
| | | | | | | | | | | | |
+--------+--------+--------+--------+--------+--------+--------+-----------------------------+--------+--------------------------------+--------+-----------------------------+
| Profit attributable to: | | | | | | | | |
| | | | | | | | | |
+-----------------------------------+--------+--------+--------+-----------------------------+--------+--------------------------------+--------+-----------------------------+
| Equity shareholders | | | | | (17,494) | | 18,761 | | 1,267 |
+--------------------------+--------+--------+--------+--------+-----------------------------+--------+--------------------------------+--------+-----------------------------+
| | | | | | | | | | | | |
+--------+--------+--------+--------+--------+--------+--------+-----------------------------+--------+--------------------------------+--------+-----------------------------+
| Deferred tax | | | | | | (207,949) | | (207,949) |
| | | | | - | | | | |
+-----------------------------------+--------+--------+--------+-----------------------------+--------+--------------------------------+--------+-----------------------------+
| | | | | | | | | | | | |
+--------+--------+--------+--------+--------+--------+--------+-----------------------------+--------+--------------------------------+--------+-----------------------------+
| Trade and other payables | | (121,751) | | (7,403) | | (129,154) |
+-----------------------------------------------------+--------+-----------------------------+--------+--------------------------------+--------+-----------------------------+
| | | | | | | | | | | | |
+--------+--------+--------+--------+--------+--------+--------+-----------------------------+--------+--------------------------------+--------+-----------------------------+
| Net asset value | | | 5,245,789 | | (215,352) | | 5,030,437 |
+--------------------------------------------+--------+--------+-----------------------------+--------+--------------------------------+--------+-----------------------------+
| | | | | | | | | | | | |
+--------+--------+--------+--------+--------+--------+--------+-----------------------------+--------+--------------------------------+--------+-----------------------------+
| Adjusted net asset value | | | 5,296,549 | | (215,352) | | 5,081,197 |
+--------------------------------------------+--------+--------+-----------------------------+--------+--------------------------------+--------+-----------------------------+
| | | | | | | | | | | | |
+--------+--------+--------+--------+--------+--------+--------+-----------------------------+--------+--------------------------------+--------+-----------------------------+
| Net asset value per share (Yen) | | | JPJPY118.95 | | (JPJPY4.88) | | JPJPY114.07 |
+--------------------------------------------+--------+--------+-----------------------------+--------+--------------------------------+--------+-----------------------------+
| Net asset value per share (Sterling) | | GBP0.75 | | (GBP0.03) | | GBP0.72 |
+-----------------------------------------------------+--------+-----------------------------+--------+--------------------------------+--------+-----------------------------+
| | | | | | | | | | | | |
+--------+--------+--------+--------+--------+--------+--------+-----------------------------+--------+--------------------------------+--------+-----------------------------+
| Adjusted net asset value per share (Yen) | | JPJPY120.10 | | (JPJPY4.88) | | JPJPY115.22 |
+-----------------------------------------------------+--------+-----------------------------+--------+--------------------------------+--------+-----------------------------+
| Adjusted net asset value per share (Sterling) | | GBP0.76 | | (GBP0.03) | | GBP0.73 |
+-----------------------------------------------------+--------+-----------------------------+--------+--------------------------------+--------+-----------------------------+
| | | | | | | | | | | | |
+--------+--------+--------+--------+--------+--------+--------+-----------------------------+--------+--------------------------------+--------+-----------------------------+
| | | | | | | | JPJPY | | JPJPY | | JPJPY |
+--------+--------+--------+--------+--------+--------+--------+-----------------------------+--------+--------------------------------+--------+-----------------------------+
| Basic earnings per share (Yen) | | | (0.40) | | 0.43 | | 0.03 |
+--------------------------------------------+--------+--------+-----------------------------+--------+--------------------------------+--------+-----------------------------+
| Diluted earnings per share (Yen) | | (0.31) | | 0.33 | | 0.02 |
+-----------------------------------------------------+--------+-----------------------------+--------+--------------------------------+--------+-----------------------------+
| | | | | | | | | | | | |
+--------+--------+--------+--------+--------+--------+--------+-----------------------------+--------+--------------------------------+--------+-----------------------------+
| Adjusted basic earnings per share (Yen) | | (0.40) | | 0.43 | | 0.03 |
+-----------------------------------------------------+--------+-----------------------------+--------+--------------------------------+--------+-----------------------------+
| Adjusted diluted earnings per share (Yen) | | (0.31) | | 0.33 | | 0.02 |
+--------+--------+--------+--------+--------+--------+--------+-----------------------------+--------+--------------------------------+--------+-----------------------------+
5. Operating segments
The Group's primary reporting segments are geographical with the Group operating
in two geographical areas, being Japan and Guernsey. The Group has only one
business segment, being investment in leisure hotels, therefore no additional
segmented information is given. The Group has no major single customer.
+--------+--------+--------+--------+--------+--------+--------+--------------------------------+--------+--------------------------------+--------+---------------------------------+
| Reconciliations of reportable segment revenues, profit or loss, assets and liabilities and other material |
| items: |
+------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| 30 June 2010 (unaudited) | | Japan | | Guernsey | | Total |
+-----------------------------------------------------+--------+--------------------------------+--------+--------------------------------+--------+---------------------------------+
| | | | | | | | JPJPY'000 | | JPJPY'000 | | JPJPY'000 |
+--------+--------+--------+--------+--------+--------+--------+--------------------------------+--------+--------------------------------+--------+---------------------------------+
| | | | | | | | | | | | |
+--------+--------+--------+--------+--------+--------+--------+--------------------------------+--------+--------------------------------+--------+---------------------------------+
| Total Revenue | | | 515,371 | | | | 515,371 |
| | | | | | - | | |
+--------------------------------------------+--------+--------+--------------------------------+--------+--------------------------------+--------+---------------------------------+
| | | | | | | | | | | | |
+--------+--------+--------+--------+--------+--------+--------+--------------------------------+--------+--------------------------------+--------+---------------------------------+
| Total comprehensive loss for the period | | (19,270) | | (24,602) | | (43,872) |
+-----------------------------------------------------+--------+--------------------------------+--------+--------------------------------+--------+---------------------------------+
| | | | | | | | | | | | |
+--------+--------+--------+--------+--------+--------+--------+--------------------------------+--------+--------------------------------+--------+---------------------------------+
| Total non-current assets | | | 5,219,762 | | | | 5,219,762 |
| | | | | | - | | |
+--------------------------------------------+--------+--------+--------------------------------+--------+--------------------------------+--------+---------------------------------+
| | | | | | | | | | | | |
| | | | | | | | - | | - | | |
+--------+--------+--------+--------+--------+--------+--------+--------------------------------+--------+--------------------------------+--------+---------------------------------+
| Total current assets | | | | | 134,127 | | 54,823 | | 188,950 |
+--------------------------+--------+--------+--------+--------+--------------------------------+--------+--------------------------------+--------+---------------------------------+
| | | | | | | | | | | | |
+--------+--------+--------+--------+--------+--------+--------+--------------------------------+--------+--------------------------------+--------+---------------------------------+
| Total liabilities | | | (398,984) | | (5,589) | | (404,573) |
+--------------------------------------------+--------+--------+--------------------------------+--------+--------------------------------+--------+---------------------------------+
| | | | | | | | | | | | |
+--------+--------+--------+--------+--------+--------+--------+--------------------------------+--------+--------------------------------+--------+---------------------------------+
| Other material items 2010 | | | | | | |
| | | | | | | |
+-----------------------------------------------------+--------+--------------------------------+--------+--------------------------------+--------+---------------------------------+
| | | | | | | | | | | | |
+--------+--------+--------+--------+--------+--------+--------+--------------------------------+--------+--------------------------------+--------+---------------------------------+
| Total expenses | | | | | (512,594) | | (21,918) | | (534,512) |
+--------------------------+--------+--------+--------+--------+--------------------------------+--------+--------------------------------+--------+---------------------------------+
| | | | | | | | | | | | |
+--------+--------+--------+--------+--------+--------+--------+--------------------------------+--------+--------------------------------+--------+---------------------------------+
| | | | | | | | Japan | | Guernsey | | Total |
+--------+--------+--------+--------+--------+--------+--------+--------------------------------+--------+--------------------------------+--------+---------------------------------+
| 30 June 2009 (unaudited) | | JPJPY'000 | | JPJPY'000 | | JPJPY'000 |
+-----------------------------------------------------+--------+--------------------------------+--------+--------------------------------+--------+---------------------------------+
| | | | | | | | | | | | |
+--------+--------+--------+--------+--------+--------+--------+--------------------------------+--------+--------------------------------+--------+---------------------------------+
| Total Revenue | | | 590,662 | | | | 590,662 |
| | | | | | - | | |
+--------------------------------------------+--------+--------+--------------------------------+--------+--------------------------------+--------+---------------------------------+
| | | | | | | | | | | | |
+--------+--------+--------+--------+--------+--------+--------+--------------------------------+--------+--------------------------------+--------+---------------------------------+
| Total comprehensive income/(loss) for the period | | 38,563 | | (35,813) | | 2,750 |
+-----------------------------------------------------+--------+--------------------------------+--------+--------------------------------+--------+---------------------------------+
| | | | | | | | | | | | |
+--------+--------+--------+--------+--------+--------+--------+--------------------------------+--------+--------------------------------+--------+---------------------------------+
| Other material items 2009 | | | | | | |
| | | | | | | |
+-----------------------------------------------------+--------+--------------------------------+--------+--------------------------------+--------+---------------------------------+
| | | | | | | | | | | | |
+--------+--------+--------+--------+--------+--------+--------+--------------------------------+--------+--------------------------------+--------+---------------------------------+
| Total expenses | | | | | (540,787) | | (36,635) | | (577,422) |
+--------------------------+--------+--------+--------+--------+--------------------------------+--------+--------------------------------+--------+---------------------------------+
| | | | | | | | | | | | |
+--------+--------+--------+--------+--------+--------+--------+--------------------------------+--------+--------------------------------+--------+---------------------------------+
| 31 December 2009 | (audited) | | | | | | |
+--------------------------+--------------------------+--------+--------------------------------+--------+--------------------------------+--------+---------------------------------+
| | | | | | | | | | | | |
+--------+--------+--------+--------+--------+--------+--------+--------------------------------+--------+--------------------------------+--------+---------------------------------+
| Total non-current assets | | 4,935,367 | | | | 4,935,367 |
| | | | | - | | |
+-----------------------------------------------------+--------+--------------------------------+--------+--------------------------------+--------+---------------------------------+
| | | | | | | | | | | | |
+--------+--------+--------+--------+--------+--------+--------+--------------------------------+--------+--------------------------------+--------+---------------------------------+
| Total current assets | | | | | 332,341 | | 120,928 | | 453,269 |
+--------------------------+--------+--------+--------+--------+--------------------------------+--------+--------------------------------+--------+---------------------------------+
| | | | | | | | | | | | |
+--------+--------+--------+--------+--------+--------+--------+--------------------------------+--------+--------------------------------+--------+---------------------------------+
| Total liabilities | | | (329,328) | | (11,297) | | (340,625) |
+--------+--------+--------+--------+--------+--------+--------+--------------------------------+--------+--------------------------------+--------+---------------------------------+
6. Taxation
Taxation on profit on ordinary activities
Guernsey
The Company is exempt from taxation in Guernsey under the provisions of the
Income Tax (Exempt Bodies) (Guernsey) Ordinance, 1989, as amended, and is
charged an annual exemption fee of GBP600 (JPJPY 89,000).
Japan
+--------+--------+--------+--------+--------+--------+--------+--------+--------+----------------------------------+--------+----------------------------------+
| The tax charge for the period comprises: | | 30 | | 30 |
| | | June | | June |
| | | 2010 | | 2009 |
+-----------------------------------------------------------------------+--------+----------------------------------+--------+----------------------------------+
| | | | | | | | | | Unaudited | | Audited |
+--------+--------+--------+--------+--------+--------+--------+--------+--------+----------------------------------+--------+----------------------------------+
| | | | | | | | | | JPJPY'000 | | JPJPY'000 |
+--------+--------+--------+--------+--------+--------+--------+--------+--------+----------------------------------+--------+----------------------------------+
| Deferred tax | | (6,222) | | (6,355) |
+-----------------------------------------------------------------------+--------+----------------------------------+--------+----------------------------------+
| Withholding tax | | 13,599 | | 17,596 |
+-----------------------------------------------------------------------+--------+----------------------------------+--------+----------------------------------+
| Corporation tax | | 649 | | 147 |
+-----------------------------------------------------------------------+--------+----------------------------------+--------+----------------------------------+
| Tax charge | | | | | 8,026 | | 11,388 |
+--------+--------+--------+--------+--------+--------+--------+--------+--------+----------------------------------+--------+----------------------------------+
The reasons for the difference between actual tax charge for the year and the
standard rate of tax in Japan applied to the results for the year are as
follows:
+--------+--------+--------+--------+--------+-----------------------------+--------+----------------------------------+--------+---------------------------------+--------+-----------------------------------+
| | | | | | 30 June 2010 | | 30 June 2009 |
+--------+--------+--------+--------+--------+-------------------------------------------------------------------------+--------+------------------------------------------------------------------------------+
| | | | | | Unaudited | | Unaudited |
+--------+--------+--------+--------+--------+-------------------------------------------------------------------------+--------+------------------------------------------------------------------------------+
| | | | | | | | | | |
| | | | | | | | | | Restated |
+--------+--------+--------+--------+--------+-----------------------------+--------+----------------------------------+--------+------------------------------------------------------------------------------+
| | | | | | Gross | | Tax | | Gross | | Tax |
| | | | | | | | effect | | | | effect |
| | | | | | | | at 20% | | | | at 20% |
+--------+--------+--------+--------+--------+-----------------------------+--------+----------------------------------+--------+---------------------------------+--------+-----------------------------------+
| | | | | | JPJPY'000 | | JPJPY'000 | | JPJPY'000 | | JPJPY'000 |
+--------+--------+--------+--------+--------+-----------------------------+--------+----------------------------------+--------+---------------------------------+--------+-----------------------------------+
| (Loss)/profit before taxation | (35,846) | | (7,169) | | 14,138 | | 2,827 |
+--------------------------------------------+-----------------------------+--------+----------------------------------+--------+---------------------------------+--------+-----------------------------------+
| Income not subject to tax | (10) | | (2) | | (4) | | (1) |
+--------------------------------------------+-----------------------------+--------+----------------------------------+--------+---------------------------------+--------+-----------------------------------+
| Expenses not deductible for tax | 24,612 | | 4,922 | | 35,813 | | 7,163 |
+--------------------------------------------+-----------------------------+--------+----------------------------------+--------+---------------------------------+--------+-----------------------------------+
| Taxable income before tax losses brought | (11,244) | | (2,249) | | 49,947 | | 9,989 |
| forwards | | | | | | | |
+--------------------------------------------+-----------------------------+--------+----------------------------------+--------+---------------------------------+--------+-----------------------------------+
| Tax losses brought forward | (9,807) | | (1,961) | | | | |
| | | | | | - | | - |
+--------------------------------------------+-----------------------------+--------+----------------------------------+--------+---------------------------------+--------+-----------------------------------+
| Tax losses not utilised | 57,936 | | 11,587 | | 6,258 | | 1,252 |
+--------------------------------------------+-----------------------------+--------+----------------------------------+--------+---------------------------------+--------+-----------------------------------+
| Net taxable income | 36,885 | | 7,377 | | 56,205 | | 11,241 |
+--------------------------------------------+-----------------------------+--------+----------------------------------+--------+---------------------------------+--------+-----------------------------------+
| Minimum charge on SPEs with nil taxable | | | | | | | |
| income | | | | | | | |
+ +-----------------------------+--------+----------------------------------+--------+---------------------------------+--------+-----------------------------------+
| | | | 649 | | | | 147 |
+--------------------------------------------+-----------------------------+--------+----------------------------------+--------+---------------------------------+--------+-----------------------------------+
| Tax charge | | | 8,026 | | | | 11,388 |
+--------+--------+--------+--------+--------+-----------------------------+--------+----------------------------------+--------+---------------------------------+--------+-----------------------------------+
The following are the major deferred tax liabilities recognised by the Group and
movements thereon:
+--------+--------+--------+--------+--------+--------+--------+---------------------------------+--------+--------------------------------+--------+---------------------------------+
| | | | | | | | 30 | | 31 | | 30 |
| | | | | | | | June | | December | | June |
| | | | | | | | 2010 | | 2009 | | 2009 |
+--------+--------+--------+--------+--------+--------+--------+---------------------------------+--------+--------------------------------+--------+---------------------------------+
| | | | | | | | Unaudited | | Audited | | Unaudited |
+--------+--------+--------+--------+--------+--------+--------+---------------------------------+--------+--------------------------------+--------+---------------------------------+
| | | | | | | | | | | | Restated |
+--------+--------+--------+--------+--------+--------+--------+---------------------------------+--------+--------------------------------+--------+---------------------------------+
| | | | | | | | JPJPY'000 | | JPJPY'000 | | JPJPY'000 |
+--------+--------+--------+--------+--------+--------+--------+---------------------------------+--------+--------------------------------+--------+---------------------------------+
| At the beginning of the period/year | | (203,749) | | (214,304) | | (214,304) |
+-----------------------------------------------------+--------+---------------------------------+--------+--------------------------------+--------+---------------------------------+
| Movements: | | | | | | |
+-----------------------------------------------------+--------+---------------------------------+--------+--------------------------------+--------+---------------------------------+
| Accelerated tax depreciation | | 6,222 | | 10,555 | | 6,355 |
+-----------------------------------------------------+--------+---------------------------------+--------+--------------------------------+--------+---------------------------------+
| Total movements for the year | | 6,222 | | 10,555 | | 6,355 |
+-----------------------------------------------------+--------+---------------------------------+--------+--------------------------------+--------+---------------------------------+
| Balance at the end of the period/year | | (197,527) | | (203,749) | | (207,949) |
+--------+--------+--------+--------+--------+--------+--------+---------------------------------+--------+--------------------------------+--------+---------------------------------+
7. Earnings per share
+--------+--------+--------+--------+--------+--------+--------+--------+--------+----------------------------+--------+----------------------------+
| The earnings per share is based on the number of ordinary shares as | | 30 | | 30 |
| follows: | | June | | June |
| | | 2010 | | 2009 |
+-----------------------------------------------------------------------+--------+----------------------------+--------+----------------------------+
| | | | | | | | | | Unaudited | | Unaudited |
+--------+--------+--------+--------+--------+--------+--------+--------+--------+----------------------------+--------+----------------------------+
| Number of ordinary shares for basic and diluted earnings per share: | | | | |
+-----------------------------------------------------------------------+--------+----------------------------+--------+----------------------------+
| Weighted average number of shares in issue during the period | | 44,100,002 | | 44,100,002 |
+-----------------------------------------------------------------------+--------+----------------------------+--------+----------------------------+
| Dilutive potential shares | | | | | | 12,420,500 | | 12,420,500 |
+-----------------------------------+--------+--------+--------+--------+--------+----------------------------+--------+----------------------------+
| | | | | | | | | | 56,520,502 | | 56,520,502 |
+--------+--------+--------+--------+--------+--------+--------+--------+--------+----------------------------+--------+----------------------------+
8. Property, plant and equipment
[*** UNPARSEABLE TABLE ***]
8. Property, plant and equipment (continued)
[*** UNPARSEABLE TABLE ***]
[*** UNPARSEABLE TABLE ***]
As stated above, the Group's property, plant and equipment are stated at cost
and are depreciated on the straight line method over their estimated useful
lives.
In compliance with the AIM admission document a valuation has been prepared by
Colliers International (Hong Kong) Ltd, an independent valuer, in accordance
with RICS standards. Colliers International (Hong Kong) Ltd estimated the value
of the Group's property, plant and equipment at 31 December 2009 to be
JPJPY4,632 million. A valuation is performed yearly.
9. Intangible assets
+--------+--------+--------+--------+--------+--------+--------+--------------------------------+--------+---------------------------------+--------+---------------------------------+
| | | | | | | | 30 | | 31 | | 30 |
| | | | | | | | June | | December | | June |
| | | | | | | | 2010 | | 2009 | | 2009 |
+--------+--------+--------+--------+--------+--------+--------+--------------------------------+--------+---------------------------------+--------+---------------------------------+
| | | | | | | | Unaudited | | Audited | | Unaudited |
+--------+--------+--------+--------+--------+--------+--------+--------------------------------+--------+---------------------------------+--------+---------------------------------+
| | | | | | | | JPJPY'000 | | JPJPY'000 | | JPJPY'000 |
+--------+--------+--------+--------+--------+--------+--------+--------------------------------+--------+---------------------------------+--------+---------------------------------+
| Software and Trademarks | | | | | | | |
+--------------------------------------------+--------+--------+--------------------------------+--------+---------------------------------+--------+---------------------------------+
| Cost at the beginning of the period/year | | 35,075 | | 4,765 | | 4,765 |
+-----------------------------------------------------+--------+--------------------------------+--------+---------------------------------+--------+---------------------------------+
| Accumulated amortisation at the beginning of the | | | | | | |
| period/year | | | | | | |
+ +--------+--------------------------------+--------+---------------------------------+--------+---------------------------------+
| | | (2,192) | | (893) | | (893) |
+-----------------------------------------------------+--------+--------------------------------+--------+---------------------------------+--------+---------------------------------+
| Carrying value at the beginning period/year | | 32,883 | | 3,872 | | 3,872 |
+-----------------------------------------------------+--------+--------------------------------+--------+---------------------------------+--------+---------------------------------+
| | | | | | | | | | | | |
+--------+--------+--------+--------+--------+--------+--------+--------------------------------+--------+---------------------------------+--------+---------------------------------+
| Movements | | | | | | | | |
+-----------------------------------+--------+--------+--------+--------------------------------+--------+---------------------------------+--------+---------------------------------+
| Additions | | | | | | 24,208 | | 30,310 | | 22,297 |
+-----------------+--------+--------+--------+--------+--------+--------------------------------+--------+---------------------------------+--------+---------------------------------+
| Amortisation for the period/year | | | (503) | | (1,299) | | (536) |
+--------------------------------------------+--------+--------+--------------------------------+--------+---------------------------------+--------+---------------------------------+
| | | | 23,705 | | 29,011 | | 21,761 |
+--------------------------------------------+--------+--------+--------------------------------+--------+---------------------------------+--------+---------------------------------+
| | | | | | | | | | | | |
+--------+--------+--------+--------+--------+--------+--------+--------------------------------+--------+---------------------------------+--------+---------------------------------+
| Carrying value at the end of the period/year | | 56,588 | | 32,883 | | 25,633 |
+-----------------------------------------------------+--------+--------------------------------+--------+---------------------------------+--------+---------------------------------+
| Cost at the end of the period/year | | | 59,283 | | 35,075 | | 27,062 |
+--------------------------------------------+--------+--------+--------------------------------+--------+---------------------------------+--------+---------------------------------+
| Accumulated depreciation at the end of the | | (2,695) | | (2,192) | | (1,429) |
| period/year | | | | | | |
+--------+--------+--------+--------+--------+--------+--------+--------------------------------+--------+---------------------------------+--------+---------------------------------+
10. Net asset value per share
+--------+--------+--------+--------+--------+--------+--------+-----------------------------+--------+-----------------------------+--------+--------------------------------+
| | | | | | | | 30 | | 31 | | 30 |
| | | | | | | | June | | December | | June |
| | | | | | | | 2010 | | 2009 | | 2009 |
+--------+--------+--------+--------+--------+--------+--------+-----------------------------+--------+-----------------------------+--------+--------------------------------+
| | | | | | | | Unaudited | | Audited | | Unaudited |
+--------+--------+--------+--------+--------+--------+--------+-----------------------------+--------+-----------------------------+--------+--------------------------------+
| | | | | | | | JPJPY'000 | | JPJPY'000 | | JPJPY'000 |
+--------+--------+--------+--------+--------+--------+--------+-----------------------------+--------+-----------------------------+--------+--------------------------------+
| Net asset value per Consolidated Statement of | | | | | | |
| Financial Position | | | | | | |
+ +--------+-----------------------------+--------+-----------------------------+--------+--------------------------------+
| | | 5,004,139 | | 5,048,011 | | 5,368,227 |
+-----------------------------------------------------+--------+-----------------------------+--------+-----------------------------+--------+--------------------------------+
| Difference between the value per the independent | | | | | | |
| valuation and the book value of plant, property and | | | | | | |
| equipment as shown in the Consolidated Statement of | | | | | | |
| Financial Position | | | | | | |
+ +--------+-----------------------------+--------+-----------------------------+--------+--------------------------------+
| | | | | | | |
+ +--------+-----------------------------+--------+-----------------------------+--------+--------------------------------+
| | | | | | | |
+ +--------+-----------------------------+--------+-----------------------------+--------+--------------------------------+
| | | (526,954) | | (267,264) | | 50,760 |
+-----------------------------------------------------+--------+-----------------------------+--------+-----------------------------+--------+--------------------------------+
| Adjusted net asset value | | | | 4,477,185 | | 4,780,747 | | 5,418,987 |
+-----------------------------------+--------+--------+--------+-----------------------------+--------+-----------------------------+--------+--------------------------------+
| | | | | | | | | | | | |
+--------+--------+--------+--------+--------+--------+--------+-----------------------------+--------+-----------------------------+--------+--------------------------------+
| Net asset value per share (Yen) | | | JPJPY113.47 | | JPJPY114.47 | | JPJPY114.07 |
+--------------------------------------------+--------+--------+-----------------------------+--------+-----------------------------+--------+--------------------------------+
| Net asset value per share (Sterling) | | GBP0.86 | | GBP0.78 | | GBP0.72 |
+-----------------------------------------------------+--------+-----------------------------+--------+-----------------------------+--------+--------------------------------+
| | | | | | | | | | | | |
+--------+--------+--------+--------+--------+--------+--------+-----------------------------+--------+-----------------------------+--------+--------------------------------+
| Adjusted net asset value per share (Yen) | | JPJPY101.52 | | JPJPY108.41 | | JPJPY122.88 |
+-----------------------------------------------------+--------+-----------------------------+--------+-----------------------------+--------+--------------------------------+
| Adjusted net asset value per share (Sterling) | | GBP0.77 | | GBP0.74 | | GBP0.77 |
+--------+--------+--------+--------+--------+--------+--------+-----------------------------+--------+-----------------------------+--------+--------------------------------+
Net asset value per share is based on total assets per the Consolidated
Statement of Financial Position at the end of the period/year and the number of
shares in issue at the end of the period/year.
Adjusted net asset value per share is based on the net asset value per
Consolidated Statement of Financial Position adjusted for the revaluation of
property and equipment, as per the Colliers International (Hong Kong) Ltd
valuation detailed in note 8, and the number of shares in issue at the end of
the period/year.
11. Commitments under operating leases
Although the TK Operators hold freehold title to most of the properties, there
are some parcels of land used for car parking that are rented. The total future
minimum lease payments are due as follows:
+--------+--------+--------+--------+--------+--------+--------+---------------------------------+--------+---------------------------------+--------+---------------------------------+
| | | | | | | | 30 | | 31 | | 30 |
| | | | | | | | June | | December | | June |
| | | | | | | | 2010 | | 2009 | | 2009 |
+--------+--------+--------+--------+--------+--------+--------+---------------------------------+--------+---------------------------------+--------+---------------------------------+
| | | | | | | | Unaudited | | Audited | | Unaudited |
+--------+--------+--------+--------+--------+--------+--------+---------------------------------+--------+---------------------------------+--------+---------------------------------+
| | | | | | | | JPJPY'000 | | JPJPY'000 | | JPJPY'000 |
+--------+--------+--------+--------+--------+--------+--------+---------------------------------+--------+---------------------------------+--------+---------------------------------+
| Not later than one year | | | | 4,496 | | 4,496 | | 5,112 |
+-----------------------------------+--------+--------+--------+---------------------------------+--------+---------------------------------+--------+---------------------------------+
| Later than one year and not later than five years | | 17,088 | | 17,088 | | 18,480 |
+-----------------------------------------------------+--------+---------------------------------+--------+---------------------------------+--------+---------------------------------+
| Later than five years | | | | | 3,500 | | 5,636 | | 58,225 |
+--------------------------+--------+--------+--------+--------+---------------------------------+--------+---------------------------------+--------+---------------------------------+
| | | | | | | | 25,084 | | 27,220 | | 81,817 |
+--------+--------+--------+--------+--------+--------+--------+---------------------------------+--------+---------------------------------+--------+---------------------------------+
12. Related parties and material contracts
New Perspective, the Group's Asset Manager, earned JPJPY50,386,000 (2009:
JPJPY53,112,000) by way of asset management fees and JPJPY7,982,000 (2009:
JPJPY5,568,000) for accounting and other services during the period. Of these
fees JPJPY1,567,000 (2009: JPJPY2,103,000) was outstanding at the period end.
13. Events after the reporting period
Janine Lewis was appointed as a Director of Japan Leisure Hotels Limited on 2
July 2010.
The Company paid an interim dividend of 1 pence per share on 20 August 2010.
Apart from the above, there have been no significant events after the reporting
date.
Key Parties
+-----------+---------+---------+-----------------------------+------------------+---------+---------+---------+----------+
| Directors | | | | Registered Office of the Company | |
+-----------+---------+---------+-----------------------------+------------------------------------------------+----------+
| Alan Clifton | | | Sarnia House | |
| (Chairman) | | | | |
+---------------------+---------+-----------------------------+------------------------------------------------+----------+
| Sarah Evans | | | St Peter Port | | | |
+---------------------+---------+-----------------------------+----------------------------+---------+---------+----------+
| William Hunter | Resigned 30 June | Guernsey | | | |
| | 2010 | | | | |
+---------------------+---------------------------------------+----------------------------+---------+---------+----------+
| Janine Lewis | Appointed 2 July | GY1 4NA | | | |
| | 2010 | | | | |
+---------------------+---------------------------------------+----------------------------+---------+---------+----------+
| | | | | Channel Islands | | | | |
+-----------+---------+---------+-----------------------------+------------------+---------+---------+---------+----------+
| | | | | | | | |
+-----------+---------+---------+-----------------------------+----------------------------+---------+---------+----------+
| Asset Manager* | Administrator and Company Secretary | |
+ + +----------+
| | | |
+-------------------------------------------------------------+------------------------------------------------+----------+
| New Perspective | | | Praxis Property Fund Services Limited | |
+---------------------+---------+-----------------------------+------------------------------------------------+----------+
| 7F Fukuyoshicho | | | PO Box 296 | | | |
| Bldg | | | | | | |
+---------------------+---------+-----------------------------+----------------------------+---------+---------+----------+
| 2-2-6 Roppongi | | | Sarnia House | | | |
+---------------------+---------+-----------------------------+----------------------------+---------+---------+----------+
| Minato-ku | | | | St Peter Port | | | |
+-----------+---------+---------+-----------------------------+----------------------------+---------+---------+----------+
| Tokyo | | | | Guernsey | | | | |
+-----------+---------+---------+-----------------------------+------------------+---------+---------+---------+----------+
| 106-0032 | | | | GY1 4NA | | | | |
+-----------+---------+---------+-----------------------------+------------------+---------+---------+---------+----------+
| Japan | | | | Channel Islands | | | |
+-----------+---------+---------+-----------------------------+----------------------------+---------+---------+----------+
| | | | | | | | | |
+-----------+---------+---------+-----------------------------+------------------+---------+---------+---------+----------+
| Nominated Adviser for AIM | | Corporate Broker | | | |
+-------------------------------+-----------------------------+----------------------------+---------+---------+----------+
| Shore Capital and Corporate | | Shore Capital and Corporate | | |
| Limited | | Limited | | |
+-------------------------------+-----------------------------+--------------------------------------+---------+----------+
| Bond Street House | | | Bond Street House | | | |
+---------------------+---------+-----------------------------+----------------------------+---------+---------+----------+
| 14 Clifford Street | | | 14 Clifford | | | |
| | | | Street | | | |
+---------------------+---------+-----------------------------+----------------------------+---------+---------+----------+
| London | | | | London | | | | |
+-----------+---------+---------+-----------------------------+------------------+---------+---------+---------+----------+
| W1S 4JU | | | | W1S 4JU | | | | |
+-----------+---------+---------+-----------------------------+------------------+---------+---------+---------+----------+
| United Kingdom | | | United Kingdom | | | |
+---------------------+---------+-----------------------------+----------------------------+---------+---------+----------+
| | | | | | | | | |
+-----------+---------+---------+-----------------------------+------------------+---------+---------+---------+----------+
| Independent | | | Registrars | | | | |
| Auditors | | | | | | | |
+---------------------+---------+-----------------------------+------------------+---------+---------+---------+----------+
| BDO Limited | | | Capita Registrars (Guernsey) Limited | |
+---------------------+---------+-----------------------------+------------------------------------------------+----------+
| Place du Pré | | | 2nd Floor | | | | |
+---------------------+---------+-----------------------------+------------------+---------+---------+---------+----------+
| Rue du | | | | No.1 Le Truchot | | | |
| Pré | | | | | | | |
+-----------+---------+---------+-----------------------------+----------------------------+---------+---------+----------+
| St Peter Port | | | St Peter Port | | | |
+---------------------+---------+-----------------------------+----------------------------+---------+---------+----------+
| Guernsey | | | | Guernsey | | | | |
| | | | | | | | | |
+-----------+---------+---------+-----------------------------+------------------+---------+---------+---------+----------+
| GY1 3LL | | | | GY1 4AE | | | | |
+-----------+---------+---------+-----------------------------+------------------+---------+---------+---------+----------+
| Channel Islands | | | Channel Islands | | | |
+---------------------+---------+-----------------------------+----------------------------+---------+---------+----------+
| | | | | | | | | |
+-----------+---------+---------+-----------------------------+------------------+---------+---------+---------+----------+
| Legal Advisers to the | | Legal Advisers to the | | |
| Company | | Company | | |
+-------------------------------+-----------------------------+--------------------------------------+---------+----------+
| As to English Law | | | As to Japanese | | | |
| | | | Law | | | |
+---------------------+---------+-----------------------------+----------------------------+---------+---------+----------+
| Ashurst LLP | | | Ashurst Tokyo Law Office | | |
+---------------------+---------+-----------------------------+--------------------------------------+---------+----------+
| Broadwalk House | | | Shiroyama Trust | | | |
| | | | Tower | | | |
+---------------------+---------+-----------------------------+----------------------------+---------+---------+----------+
| 5 Appold Street | | | 30th Floor | | | | |
+---------------------+---------+-----------------------------+------------------+---------+---------+---------+----------+
| London | | | | 4-3-1 Toranomon | | | |
+-----------+---------+---------+-----------------------------+----------------------------+---------+---------+----------+
| EC2A 2HA | | | | Minato-Ku | | | | |
+-----------+---------+---------+-----------------------------+------------------+---------+---------+---------+----------+
| United Kingdom | | | Tokyo | | | | |
+---------------------+---------+-----------------------------+------------------+---------+---------+---------+----------+
| | | | | 105-6030 | | | | |
+-----------+---------+---------+-----------------------------+------------------+---------+---------+---------+----------+
| | | | | Japan | | | | |
+-----------+---------+---------+-----------------------------+------------------+---------+---------+---------+----------+
| Websites | | | www.japanleisurehotels.com | | | | | |
+-----------+---------+---------+-----------------------------+------------------+---------+---------+---------+----------+
| | | | www.japanleisurehotels.gg | | | | | |
+-----------+---------+---------+-----------------------------+------------------+---------+---------+---------+----------+
| * New Perspective is the Asset Manager to the underlying | | | |
| Special Purpose Entities ("SPEs") | | | |
+-----------+---------+---------+-----------------------------+------------------+---------+---------+---------+----------+
This information is provided by RNS
The company news service from the London Stock Exchange
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