RNS Number:2033J
Gresham Hotel Group Plc
26 March 2003
PRELIMINARY RESULTS
ELEVEN MONTHS ENDED 31 DECEMBER 2002
Financial Highlights
* Turnover for the eleven months at Euro51m (53 weeks to 31 Jan 2002: Euro55m)
* Room occupancy increased to 76% (53 weeks to 31 Jan 2002: 74%)
* Average room rate at Euro85 (53 weeks to 31 Jan 2002: Euro87)
* Operating profit before exceptional items of Euro4.2m
* Exceptional items comprise:
Professional fees Euro637,000
Payments to Directors for termination of contracts Euro481,000
* Final dividend of Euro0.01 per share
* Net assets at Euro135m producing a net asset value per share of Euro1.70
* Net bank borrowings at Euro49m producing a bank gearing ratio of 37%
CHAIRMAN'S STATEMENT
PRELIMINARY RESULTS FOR THE PERIOD ENDED 31 DECEMBER 2002
Dear Shareholder,
Overview of Results
The results for the eleven month period to 31 December 2002 reflect an extremely
challenging environment for the Group. Trading was adversely impacted by the
combined effects of the slowdown in domestic and international economic
activity, the continuing negative impact of 11 September and the considerable
level of global political uncertainty. These results reflect eleven months of
trading as against twelve months in the previous year.
The trading conditions were compounded by increased operating costs particularly
in the area of insurance and payroll costs, which resulted in a reduction in
operating profit before exceptional costs to Euro4.2million (2001: Euro7.7million)
together with the shortened trading period. Group occupancy for the period was
76% (2001: 74%), with a Group average room rate of Euro85 being achieved (2001:
Euro87).
In line with the industry, all of our properties experienced a considerable
shortening in booking patterns, together with a reduced volume of business from
long haul destinations. Our marketing and sales efforts are currently focused
on domestic and "close to home" markets through a number of corporate and
leisure initiatives.
Exceptional costs during the period of Euro1.1m relate to events which culminated
in the requisition of an Extraordinary General Meeting which resulted in the
recomposition of the Board.
The Group made a significant investment in a number of properties during the
period. The ground floor of The Gresham in Dublin has been redeveloped to
provide a new lobby area, a new bar and restaurant and a complete upgrade of
what was previously the lobby. All of the bedrooms in the Gresham Metropole,
Cork have been refurbished together with 56 rooms in the Limerick Ryan. All of
the bedrooms in the Galway Ryan and 100 bedrooms in the Killarney Ryan have been
totally redeveloped. Bedrooms in the Gresham Belson, Brussels have also
received a soft upgrade.
Dividend
Despite the very difficult period under review, and the challenging environment
in which the Group continues to operate, the Board is recommending a final
dividend of 1c per share (2001: 3.2c). Subject to approval at the Annual
General Meeting which is scheduled for 21 May 2003, the dividend will be paid on
30 May 2003 to shareholders on the register on 4 April 2003.
Business Review
I am pleased to report that the newly constituted Board immediately set to work
in an objective and professional manner and is working well. As outlined at the
interim stage, the Board undertook a strategic review of operations with this
review now forming part of a continuous process. There are a number of
initiatives which have stemmed from this review.
Mr Jim O'Leary who is a lecturer of economics in NUI Maynooth and a main AIB
board director, having previously been chief economist with Davy Stockbrokers
has agreed to join the Board as a non-executive director in May of this year.
When I was appointed Chairman I stressed that I considered the appointment
temporary in nature to facilitate a transitionary period. As this transition is
now complete and in line with good corporate governance to split the roles of
Chairman and Chief Executive the Board has agreed that Mr Harvey M Soning is to
become non-executive Chairman, also effective from May 2003. Mr Donal Chambers
will continue in the role as senior independent director.
In relation to our property portfolio and specifically our associated land
banks, the Group has made a planning submission for a mixture of luxury
apartments and townhouses on land adjacent to the Limerick Ryan Hotel.
The Group intends to make an application for residential units on land adjacent
to the Killarney Ryan by the end of April 2003. A planning application will
also be submitted in relation to the Gresham Hotel Dublin, for the creation of
14 additional meeting rooms and a leisure facility in the form of a 'Day Spa'.
This application is on schedule to be submitted in April 2003 also. If
successful, this will bring the total number of meeting rooms in The Gresham to
35.
In a process which commenced at the start of last year, a number of
organisational changes have been made both at Head Office and hotel level.
These changes will result in a reduction in our cost base by in excess of Euro1
million, the entire benefit of which will be derived in the current year.
Having reviewed the property portfolio and the business model in operation at
our various locations, the Board has decided to concentrate on city centre
locations, with an emphasis on bedrooms and meeting facilities with limited
ground floor activity. This model is what currently exists in our properties
outside Ireland. Furthermore, the Board believe that it is in the best
interests of the Group to cluster its properties whereby our preference is to
operate a number of properties in appropriate locations, rather than having a
geographical spread which is too thin. The Group intends to achieve this
through a mixture of freehold, lease and management contracts.
The process of maximising and extracting value from our property portfolio,
together with securing the future profitability of the Group is I reiterate, an
on-going one, with further announcements being made in due course.
On behalf of the Board I would like to express our gratitude to every member of
staff for their continued professionalism and commitment during what was an
extremely difficult period for the Group. It is precisely this professionalism
and customer focus which ensures customer satisfaction and repeat business.
Outlook
Finally, the Group continues to operate in a very uncertain environment making
forecasting difficult, however we believe that the continued focus on the
strategic initiatives as outlined, together with the significant investment in
the product which has already been made, places the Group in an excellent
position to benefit from any upturn that will arise as a result of an
improvement in political and economic circumstances.
It is premature to give an accurate prediction of the outcome for the current
year, however a further update will be provided at our Annual General Meeting in
May 2003.
Patrick M Coyle
Chairman & Chief Executive
26 March 2003
GRESHAM HOTEL GROUP PLC AND SUBSIDIARIES
Group Profit & Loss Account
For the period ended 31 December 2002
Eleven month Fifty three week
period ended period ended
31 December 2002 31 January 2002
Notes Euro000's Euro000's
TURNOVER 50,696 55,221
Operating profit before exceptional costs 4,152 7,696
Exceptional costs 3 (1,118) (7,788)
Profit / (loss) before finance costs and taxation 3,034 (92)
Finance cost (2,929) (4,709)
Profit / (loss) before taxation 105 (4,801)
Taxation 4 111 (280)
Profit / (loss) after taxation 216 (5,081)
Dividends (including dividends
in respect of Non-Equity Shares)
- paid - (976)
- proposed (814) (2,517)
Loss retained for the period (598) (8,574)
Profit realised from revaluation reserve 14,836
Scrip issues in lieu of cash dividends 629 782
Retained profits at beginning of period 38,576 31,532
RETAINED PROFITS AT END OF PERIOD 38,607 38,576
Earnings per share 5 0.25c (6.69c)
Diluted earnings per share 5 0.24c (6.67c)
GRESHAM HOTEL GROUP PLC AND SUBSIDIARIES
Group Statement of Total Recognised Gains & Losses
For the period ended 31 December 2002
Eleven month Fifty three week
period ended period ended
31 December 2002 31 January 2002
Euro000's Euro000's
Profit / (Loss) after taxation and exceptional items 216 (5,081)
Unrealised surplus on revaluation of hotel properties - 19,214
Foreign currency (loss) / profit
on net assets in overseas subsidiaries (3,234) 1,668
Foreign currency profit / (loss)
on foreign currency borrowings 2,371 (1,323)
Total Recognised Gains and Losses for the period (647) 14,478
GRESHAM HOTEL GROUP PLC AND SUBSIDIARIES
Group Balance Sheet
As at 31 December 2002
31 December 2002 31 January 2002
Euro000's Euro000's
FIXED ASSETS
Tangible assets 215,409 213,209
CURRENT ASSETS
Stocks 1,562 1,358
Debtors 4,135 4,436
Cash at bank 9,575 15,183
15,272 20,977
CREDITORS
(amounts falling due within one year) (26,724) (17,458)
NET CURRENT (LIABILITIES) / ASSETS (11,452) 3,519
TOTAL ASSETS LESS
CURRENT LIABILITIES 203,957 216,728
CREDITORS
(amounts falling due after more than one year) (68,142) (80,188)
PROVISION FOR LIABILITIES AND CHARGES (1,097) (1,072)
TOTAL NET ASSETS 134,718 135,468
CAPITAL AND RESERVES
Called up share capital 8,324 8,222
Share premium account 10,572 10,592
Revaluation reserve 74,467 74,467
Other reserves 2,748 3,611
Profit and loss account 38,607 38,576
SHAREHOLDERS' FUNDS
(Equity and Non-Equity) 134,718 135,468
Net Asset Value per Share Euro1.70 Euro1.74
GRESHAM HOTEL GROUP PLC AND SUBSIDIARIES
Group Cash Flow Statement
For the period ended 31 December 2002
Eleven month Fifty three week
period ended period ended
31 December 2002 31 January 2002
Euro000's Euro000's
NET CASH INFLOW FROM
OPERATING ACTIVITIES 5,895 6,666
RETURNS ON INVESTMENTS &
SERVICING OF FINANCE
Interest received 343 810
Interest paid (2,586) (4,992)
Interest element of finance lease payments (245) (506)
Participating preference dividends (21) (33)
Net cash outflow from returns on
investments and servicing of finance (2,509) (4,721)
TAXATION
Net cash flow from taxation (131) (828)
CAPITAL EXPENDITURE
Payments to acquire tangible assets (6,199) (3,467)
Net cash outflow from capital expenditure (6,199) (3,467)
ACQUISITIONS & DISPOSALS
Proceeds from disposal of Gresham Royal Marine Hotel - 22,220
Payment of disposal costs - (912)
Net cash inflow from acquisitions & disposals - 21,308
EQUITY DIVIDENDS PAID (1,867) (2,454)
Net cash (outflow) / inflow before financing (4,811) 16,504
FINANCING
Issue of ordinary share capital 130 421
Share issue costs (47) (96)
New loans during period 2,000 2,539
Repayment of long term loans (2,293) (13,651)
Capital element of finance lease payments (112) (211)
Net cash outflow from financing (322) (10,998)
(DECREASE) / INCREASE IN CASH (5,133) 5,506
GRESHAM HOTEL GROUP PLC AND SUBSIDIARIES
Notes to the Preliminary Financial Statements
For the period ended 31 December 2002
1. Final Dividend
Euro0.01 per Ordinary share payable on 30 May 2003 to shareholders on the register
on 4 April 2003.
2. Annual Report
The Annual Report is being sent to all Shareholders. It will also be made
available to the public at the Company's Registered Office, 23 Upper O'Connell
Street, Dublin 1.
3. Exceptional Items
The exceptional items comprise professional fees and payments to Directors
arising from the convening of an Extraordinary General Meeting held on 8 August
2002 and the resolutions passed at that meeting, the payments to directors being
in respect of termination of their contracts.
Eleven month Fifty three week
period ended period ended
31 December 2002 31 January 2002
Euro000's Euro000's
Costs arising on sale & leaseback of
Gresham Royal Marine Hotel - (874)
Branding costs - (939)
Revaluation adjustment - (5,975)
Professional fees (637) -
Payments to Directors (481) -
(1,118) (7,788)
GRESHAM HOTEL GROUP PLC AND SUBSIDIARIES
Notes to the Preliminary Financial Statements
For the period ended 31 December 2002
4. Taxation Eleven month Fifty three week
period ended period ended
31 December 2002 31 January 2002
Euro000's Euro000's
Irish corporation tax - 194
Foreign corporation tax 27 204
Overprovision in earlier years (163) (203)
(136) 195
Deferred tax 25 85
Total (111) 280
5. Earnings per Share Eleven month Fifty three week
period ended period ended
31 December 2002 31 January 2002
Euro000's Euro000's
Profit / (loss) after taxation 216 (5,081)
Less: Participating preference dividends (24) (33)
192 (5,114)
Ordinary shares in issue during the period 78,451,998 76,321,858
Earnings per share after exceptional items 0.25c (6.69c)
Diluted earnings per share, which takes account solely of the potential exercise
of share options granted under the Company's Share Option Scheme, is based on a
weighted average number of shares in issue of 78,781,388 (31 Jan 2002:
76,648,451).
For further information contact:
Patrick Coyle Chief Executive Gresham Hotel Group Plc +353 1 817 6209
Robert Bastow Finance Director Gresham Hotel Group Plc +353 1 817 6209
Fiona Gillespie Communications Consultant +353 87 250 2447
This information is provided by RNS
The company news service from the London Stock Exchange
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