Peel Hotels PLC Final Results (8100H)

TIDMPHO

RNS Number : 8100H

Peel Hotels PLC

02 August 2019

PEEL HOTELS PLC

DELISTING FROM AIM

PRELIMINARY ANNOUNCEMENT

PUBLICATION OF REPORT AND ACCOUNTS AND RESTORATION OF TRADING

NOTICE OF 2019 AGM

Peel Hotels PLC announces that, as a result of a review of the benefits and drawbacks of being a listed company, the Board has concluded that the cancellation of admission of its Ordinary Shares to trading on AIM ("Cancellation") is in the best interests of the Company and its Shareholders as a whole.

The Company therefore confirms its intention to seek Shareholder's approval for the Cancellation, as referred to in its announcement made on 26 July 2019. An explanatory circular is being posted to Shareholders (the "Circular") setting out the background to and reasons for the Cancellation, the reasons why the Directors believe that this is in the best interests of the Company and its Shareholders as a whole and their recommendation to Shareholders to vote in favour of the resolution to approve the Cancellation (the "Resolution").

The Company will seek Shareholders' approval of the Cancellation at the Company's 2019 Annual General Meeting.

The Directors have also concluded that it is in the best interests of the Company and its Shareholders for the Company to re-register as a private company and adopt the New Articles following the Cancellation (the "Re-Registration"). The Re-Registration is conditional upon the Cancellation becoming effective and the approval of not less than 75 per cent. of the votes cast by Shareholders (whether present in person or by proxy) at the Annual General Meeting.

Subject to the Resolution being passed at the Annual General Meeting, the expected last day of dealings in Ordinary Shares on AIM will be 26 September 2019 and the cancellation will become effective at 7.30am on 27 September 2019. Pursuant to Rule 41 of the Aim Rules, the Company, through its Nominated Adviser, Peel Hunt LLP, will notify the London Stock Exchange of the proposed Cancellation.

Preliminary Announcement of the Company's Financial Results for the year ended 27 January 2019 are set out below.

The Company's Annual Report and Accounts for the year ended 27 January 2019 are today being published, on the basis of which the Board has requested that the temporary suspension of Trading in the Company's Shares on AIM be lifted.

Notice of the Company's 2019 AGM, to be held at 12:00 noon on Thursday 19 September at the Norfolk Royale Hotel in Bournemouth is included in the Circular.

Derived from audited results for Financial Year Ended 27 January 2019.

HIGHLIGHTS

   #          Turnover decreased 3.2% to GBP15,589,485 (2018: GBP16,097,313) 

# Operating Profit, excluding the exceptional expense of GBP1,161,241 in the previous year, down 35.1% to GBP597,977 (2018: GBP893,115). Operating profit including the exceptional expense in the previous year GBP579,977 (2018: loss of GBP268,126) on a statutory basis.

# EBITDA excluding the exceptional expense in the previous year, decreased 24.6% to GBP1,382,875 (2018: GBP1,833,611).

   #          Net debt increased GBP516,629 due in part to a timing difference in a VAT    payment. 

# Profit before tax was GBP179,203 (2018: loss GBP734,986, including the exceptional expense of GBP1,161,241 due to the impairment of the Net Book values of two leasehold properties).

'There has been a slow but sustained improvement in sales and hotel profitability since August 2018 up and until todays date. In view of the high operational gearing of the business, small improvements in turnover translate to much higher percentages of hotel profitability and therefore if we can maintain this trend, we can expect our EBITDA and Profits to move forward in the current year.

The Board have concluded that due to the costs of Listing and the fact that there is no prospect of the company wishing to raise money on the market in the foreseeable future, that there seems little purpose in continuing to be listed and therefore propose cancellation of admission of ordinary shares to trading on AIM.'

Robert Peel

Chairman

0207 286 6823

Nomad;

Peel Hunt / Capel Irwin

0207 418 8907

Review of the business

RESULTS

The key performance indicators for the Group are revenue, EBITDA, profit before tax, REVPAR and net debt levels.

The Financial Year ended 27 January 2019 has been a very challenging year for the Group with hotel revenues decreasing by 3.2% to GBP15,589,485 (2018: GBP16,097,313). Hotel gross profit before depreciation and Group administration expenses decreased 18.6% to GBP2,042,874 (2018: GBP2,508,933). EBITDA, excluding the exceptional expense in the previous year, decreased 24.6% to GBP1,382,875 (2018: GBP1,833,611).

Profit before tax was GBP179,203 (2018: loss GBP734,986, including the exceptional expense due to impairment of the Net Book Values of two leasehold properties of GBP1,161,241).

REVPAR (accommodation revenue per available room) was down 0.9% with occupancy down 2.5% and average room rate up 1.8%.

Administration expenses decreased 2.3%. Depreciation and amortisation decreased 14.6%.

FINANCE

As at 27 January 2019 net debt stood at GBP8,970,191 (2018: GBP8,453,562) representing loans totalling GBP9,284,844 (2018: GBP9,740,839) less GBP314,653 (2018: GBP1,287,277) cash at bank and in hand. Gearing on Shareholders' funds was 38.5% with interest covered 1.4 times. Net debt increased by GBP516,629 compared with the previous year.

During the Financial Year, the Company breached its financial covenants, which resulted in the Company's Bank issuing a "Reservation of Rights" letter, reserving the Bank's position in relation to the breach of covenant, whilst also confirming the Bank's current intention not to exercise any of its rights in relation to the breach.

Whilst the Directors recognise that the breach of covenant, combined with a challenging trading outlook, results in material uncertainty for the Company and Group, and increases the possibility that the Company and Group may be unable to continue realizing its assets and discharging its liabilities in the normal course of business, which might impact upon the Company's and Group's ability to continue as a going concern, they are confident that the Company and Group have adequate resources to meet their commitments.

CAPITAL EXPITURE

GBP461,433 (2018: GBP705,548) We refurbished bedrooms and upgraded air conditioning systems at the Bull Hotel in Peterborough. The corridors at the Crown and Mitre Hotel in Carlisle have been totally redecorated and refurbished. Work on bedroom renovation continues at the Midland Hotel in Bradford.

We continue to invest in our internet access throughout all our Hotels giving our Guests faster connection. This service is absolutely free to our Guests and is a vital component to them having a satisfactory stay with us.

In addition to Capital Expenditure GBP564,075 (2018: GBP614,098) was spent on repairs and renewals which help us ensure that we are constantly and consistently maintaining and improving our product. Proof of which is the continuing improvements in ratings of each Hotel assessed by the Automobile Association.

Group Statement of Comprehensive Income

for the year ended 27 January 2019

 
 
 
 
                                                     2019                       2018 
                                                      GBP                        GBP 
 
Revenue                                        15,589,485                 16,097,313 
Cost of sales                                (13,546,611)               (13,588,380) 
                                             ------------               ------------ 
Gross profit                                    2,042,874                  2,508,933 
 
Administration expenses           (659,999)                  (675,322) 
Exceptional expense 
 (note 4)                                 -                (1,161,241) 
Depreciation                      (802,898)                  (940,496) 
Total administration 
 expenses                                     (1,462,897)                (2,777,059) 
 
Operating profit                                  579,977                  (268,126) 
 
 
Finance expense                                 (400,774)                  (466,860) 
Profit/loss before tax                            179,203                  (734,986) 
Income tax                                         33,628                  (109,286) 
                                             ------------               ------------ 
 
Profit/loss and total 
 comprehensive income 
 for the period attributable 
 to owners                                        212,831                  (844,272) 
                                  =========  ============  ===========  ============ 
 
 
Earnings / (loss) per 
 share 
(note 3) 
Basic & diluted (pence)                               1.5                      (6.0) 
                                             ------------               ------------ 
 
 

Group statement of changes in equity

for the years ended 27 January 2019 and 28 January 2018

 
 
 
 Year ended 27 January               Share       Share       Profit       Total 
  2019                              Capital     premium     and loss 
                                                account      account 
                                      GBP         GBP         GBP          GBP 
 
 Balance brought forward 
  at 29 January 2018               1,401,213   9,743,495   11,931,115   23,075,823 
 Profit and total comprehensive 
  income for the period                    -           -      212,831      212,831 
 Transactions with owners 
 Dividend                                  -           -            -            - 
 Balance at 27 January 
  2019                             1,401,213   9,743,495   12,143,946   23,288,654 
                                  ==========  ==========  ===========  =========== 
 
 
 
 
Year ended 28 January                          Share       Profit 
 2018                             Share       premium      and loss 
                                 Capital      account      account       Total 
                                   GBP          GBP          GBP          GBP 
 
 Balance brought forward 
 at 30 January 2017              1,401,213    9,743,495   12,775,387   23,920,095 
 
Loss and total comprehensive 
 income for the period                   -            -   (844,272)    (844,272) 
Transaction with owners 
Dividend                                 -            -            -            - 
Balance at 28 January 
 2018                            1,401,213    9,743,495   11,931,115   23,075,823 
                               ===========  ===========  ===========  =========== 
 
 

Group Balance Sheet

at 27 January 2019

 
 
                                            2019         2018 
                                             GBP          GBP 
 Assets 
 Non-current assets 
 Property, plant and equipment        33,764,910   34,106,375 
 
 Total non-current assets             33,764,910   34,106,375 
 
 Current assets 
 Inventories                             118,380      109,271 
 Trade and other receivables             988,770      845,058 
 Cash and cash equivalents               314,653    1,287,277 
 Total current assets                  1,421,803    2,241,606 
 
 Total assets                         35,186,713   36,347,981 
 
 
 Equity and liabilities 
 Equity attributable to owners of 
  the parent 
 Share capital                         1,401,213    1,401,213 
 Share premium                         9,743,495    9,743,495 
 Retained earnings                    12,143,946   11,931,115 
                                     -----------  ----------- 
 Total equity                         23,288,654   23,075,823 
 
 Liabilities 
 
 Non-current 
 Borrowings                                    -    9,240,839 
 Deferred tax liabilities                711,089      824,009 
                                     -----------  ----------- 
 Non-current liabilities                 711,089   10,064,848 
 
 Current 
 Trade and other payables              1,873,799    2,636,396 
 Borrowings                            9,284,844      500,000 
 Current tax liabilities                  28,327       70,914 
 Current Liabilities                  11,186,970    3,207,310 
                                     -----------  ----------- 
 
 
 Total liabilities and equity         35,186,713   36,347,981 
                                     ===========  =========== 
 

Group Cash Flow Statement

for the year ended 27 January 2019

 
 
                                                            2019           2018 
                                                             GBP            GBP 
 Cash flows from operating activities 
 Profit/loss for the year                                212,831      (844,272) 
 
 Adjustments for: 
 Financial expense                                       400,774        466,860 
 Income tax                                             (33,628)        109,286 
 Depreciation                                            802,898      2,101,737 
                                                      ----------  ------------- 
 Cash flows before changes in working capital 
  and provisions                                       1,382,875      1,833,611 
 
 
 UK corporation tax paid                               (121,878)      (192,142) 
 Decrease in trade and other receivables               (143,712)        383,811 
 Increase in trade and other payables                  (764,023)        437,903 
 Decrease/(Increase) in inventories                      (9,109)          4,763 
                                                      ----------  ------------- 
 Net cash from operating activities                      344,153      2,467,946 
                                                      ----------  ------------- 
 
 Cash flows from investing activities 
 Acquisition of property, plant and equipment          (461,433)      (705,548) 
                                                      ----------  ------------- 
 Net cash outflow from investing activities            (461,433)      (705,548) 
                                                      ----------  ------------- 
 
 
 
 Cash flows from financing activities 
 Interest paid                                         (355,344)      (661,192) 
  New loan                                                     -      9,740,840 
 Loan repayments                                       (500,000)    (9,847,422) 
 Equity dividends paid                                         -              - 
 
 Net cash outflow from financing activities            (855,344)      (767,774) 
                                                      ----------  ------------- 
 
 Net increase in cash and cash equivalents             (972,624)        994,624 
                                                      ----------  ------------- 
 
 Cash and cash equivalents at the beginning 
  of the period                                        1,287,277        292,653 
                                                      ----------  ------------- 
 
 Cash and cash equivalents at the end of 
  the period                                             314,653      1,287,277 
                                                      ==========  ============= 
 
 For the purposes of the cash flow statement, 
  cash and cash equivalents comprise: 
 Cash and bank balances                                  314,653      1,287,277 
 
 
 
 
 
 

Notes

(forming part of the financial statements)

   1         Basis of preparation 

The financial information set out in this preliminary announcement does not constitute statutory accounts are defined by section 434 of the Companies Act 2006. It has been prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards (IFRS) adopted for use in the European Union, including IFRIC interpretations issued by the Accounting Standards Board, and in accordance with the AIM rules, and is not therefore in full compliance with IFRS. The principal accounting policies of the Group have remained unchanged from those set out in the Group's 2018 annual report, other than relating to the adoption of IFRS 9 and IFRS 15 in the current year. The financial statements have been prepared under the historical cost convention and are presented in sterling.

On 19 September 2017 the Company entered into a GBP9,900,000 five year term loan facility with Allied Irish Bank. This facility was used to repay the Company's previous facilities with Royal Bank of Scotland as well as the remaining balances of the Director's Loan and Loan Notes.

During the Financial Year, the Company breached its financial covenants, which resulted in the Company's Bank issuing a "Reservation of Rights" letter, reserving the Bank's position in relation to the breach of covenant, whilst also confirming the Bank's current intention not to exercise any of its rights in relation to the breach.

Whilst the Directors recognise that the breach of covenant, combined with a challenging trading outlook, results in material uncertainty for the Company and Group, and increases the possibility that the Company and Group may be unable to continue realizing its assets and discharging its liabilities in the normal course of business, which might impact upon the Company's and Group's ability to continue as a going concern, they are confident that the Company and Group have adequate resources to meet their commitments, for the reasons described below.

The Directors have prepared forecasts for more than 12 months from the date of signing these accounts, which fairly represent their best, prudent estimate of hotel trading and cash flows in the current economic environment, which forecasts show that: the Company and Group will be able to meet its loan repayment and financing costs within the facility referred to above; meet its tax payments; and pay its creditors on normal terms in the 12 months from the date of signing these accounts. The Directors have considered contingency plans in the event of unforeseen deterioration beyond their prudent forecasts, including a return to support from Directors Loans, reduced capital expenditure, and the sale of assets, In reliance on their forecasts and contingency plans, your Directors are happy to continue to adopt the going concern basis of accounting in preparing the Company's and Group's annual financial statements.

   2         Publication of non-statutory financial statements 

The financial information for the period ended 27 January 2019 was approved by the Board on 2 August 2019 and has been extracted from the Group's financial statements upon which the auditor's opinion is unqualified but includes reference to the material uncertainty described in note 1. The auditor's opinion does not include a statement under section 498(2) or (3) of the Companies Act 2006. The statutory accounts for the period ended 27 January 2019 will, in due course, be delivered to the Registrar of Companies. The statutory accounts for the period ended 28 January 2018 have been delivered to the Registrar of Companies.

   3        Earnings per share 

Basic earnings per share

The calculation of basic earnings per share at 27 January 2019 was based on the profit attributable to ordinary shareholders of GBP212,831 (2018: loss of GBP844,272) and a weighted average number of ordinary shares outstanding of 14,012,123 (2018: 14,012,123). No shares were issued in 2019 or 2018.

Diluted earnings per share

There were no potentially dilutive options in issue at either year end.

   4         Exceptional expense 

The exceptional expense of GBP1,161,241 in the prior year was due to impairment of the Net Book Values of two leasehold properties held within subsidiary Companies, which have been written down to zero.

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END

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August 02, 2019 12:11 ET (16:11 GMT)