TIDMAHCG
RNS Number : 7946C
Action Hotels PLC
20 April 2017
This announcement contains inside information
20 April 2017
Action Hotels plc
Trading update for the year ended 31 December 2016,
and Notice of Full Year Results Announcement
Action Hotels plc ("Action Hotels", the "Group" or the
"Company"); a leading owner, developer, and asset manager of
branded three and four-star hotels in the Middle East and
Australia, provides the following update on its trading performance
for the year ended 31 December 2016, and its current trading, ahead
of the announcement of its full year audited results which is
expected to be on 2 May 2017.
2016 Financial Overview
Action Hotels experienced another year of growth across it key
main performance indicators of revenue, EBITDA and asset values,
driven by solid performances across its operating portfolio along
with the addition of three new hotels opening during the year. The
openings of ibis Styles Brisbane Elizabeth Street, Tulip Inn Ras Al
Khaimah and Mercure Sohar increased the number of operational rooms
by 39.7% to 2,181 (2015: 1,561).
The Company expects to report total revenue increased by c.22%
to approximately $53.1m (2015: $43.5m), adjusted EBITDA(1)
increased by c.16% to approximately $18.5m (2015: $16.0m) and the
value of Action Hotels' hotel assets increased by c.15% to
approximately $458m (2015: $397m). As is typical in many
development companies, Action Hotels experienced some unforeseen
delays in opening dates of some of its new hotels and this has
negatively impacted revenue resulting in a level that is materially
below market expectations.
Total Assets grew with investment in the new hotels and
development portfolio and outperformed market expectations. The
development pipeline is currently being funded by operational cash
flow along with increasing debt. This increased debt gives a LTV of
51%. Net Asset Value (NAV) is expected to be $195m, in line with
market expectations.
Given Action Hotels is in accelerated growth and development
phase, an overall net loss before tax position is expected as a
result of the impact of pre-opening costs of the new hotels,
finance costs and depreciation and amortization. These costs are
charged from the day the hotel is capable of operating but before
it reaches its mature operational performance levels and therefore
have a disproportionate impact on profitability during this growth
and development phase. As a result of the finance costs, relating
to the increase in debt required to fund the development pipeline,
and the other costs associated with the expansion programme, the
net loss figure will be materially higher than original
anticipated.
Dividend
In line with the Board's intentions to pay a progressive
dividend to shareholders, the intention is to pay a final dividend
in respect of the year ended 31 December 2016 in line with market
expectations. The dividend is expected to be paid on or around the
15 June 2017, subject to the approval of the dividend at the
Company's annual general meeting. It is expected that the Company's
ordinary shares will be marked ex-entitlement to such dividend on
25 May 2017, and the dividend will be payable to all shareholders
on the Company's share register at the close of business on 26 May
2017.
2017 Current trading
Trading in Q1 2017 is solid with total revenue up c.14% over the
same period last year. Stable performances continue from our mature
operating hotels(2) , with average occupancy in line with last year
at c.76% (Q1 2016: 77%). We are mindful, however, of adverse
pressure on the hotel sector across the Middle East, however
management remain confident that its strategy to focus exclusively
on the economy and midscale hotel sector, where the demand for this
type of accommodation exceeds supply ensures fundamentals will
remain solid with revenue growth coming from new rooms.
Hotel pipeline
Action Hotels now has 12 operating hotels. The Group's pipeline
currently consists of a further six hotels, with a total of 354 new
rooms expected to be completed by the end of 2017. We will open in
our seventh country of operation and have a total of 3,184 rooms
upon completion of the pipeline hotel developments.
Alain Debare, Action Hotels CEO said:
"We are pleased to update the market on our performance which
has been robust across the Action Hotels portfolio. We remain
focused on driving performance at our operating hotels and our
growth reflects the strong contribution from our mature(2) hotel
portfolio, as well as the encouraging success of our newest hotels
as they gain traction in their respective markets. We have a good
pipeline of hotels in development and are on track to complete an
additional three hotels this year"
For more information, contact:
Action Hotels PLC Tel: +44 (0) 20
7907 9663
Alain Debare, Chief Executive
Officer
Katie Shelton, Director of
Corporate Affairs
Zeus Capital plc (NOMAD
& Broker)
Dan Bate / Jonathan Sharp Tel: +44 (0) 16
1831 1512
Victoria Ayton Tel: +44 (0) 20 3829 5000
Camarco (Press enquiries) Tel: +44 (0) 20
3757 4994
Jennifer Renwick / Tom Huddart
Notes to Editors
Action Hotels PLC
Action Hotels PLC is a leading owner, developer and asset
manager of branded three and four star hotels in the Middle East
and Australia. Established in 2005, Action Hotels currently has 12
completed hotels with 2,181 rooms in aggregate across the Middle
East and Australia, with further properties in development in both
regions.
More information is available at
http://www.actionhotels.com/
Notes
1. Adjusted EBITDA is defined as operating profit before
depreciation, amortisation, restructuring and listing costs, gains
and losses arising from the disposal of property, plant and
equipment and pre-opening costs.
2. Mature operating hotels are; ibis Glen Waverley, ibis
Salmiya, ibis Muscat, ibis Amman, ibis Sharq, Holiday Inn Muscat,
ibis Budget Melbourne Airport.
All currency amounts are in US$ unless otherwise stated.
Cautionary Statement
This announcement contains unaudited information and
forward-looking statements that are based on current expectations
or beliefs, as well as assumptions about future events. These
forward-looking statements can be identified by the fact that they
do not relate only to historical or current facts and undue
reliance should not be placed on any such statements because they
speak only as at the date of this document and are subject to known
and unknown risks and uncertainties and can be affected by other
factors that could cause actual results, and Action Hotel's plans
and objectives, to differ materially from those expressed or
implied in the forward-looking statements. Action Hotels undertakes
no obligation to revise or update any forward-looking statement
contained within this announcement, regardless of whether those
statements are affected as a result of new information, future
events or otherwise, save as required by law and regulations.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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