Interim Results
September 05 2001 - 3:01AM
UK Regulatory
RNS Number:4623J
Thistle Hotels PLC
5 September 2001
5 September 2001
Interim Results Announcement
for the 28 weeks ended
15 July 2001
* Good start to half year but flat second quarter
* Turnover up 4.4% to #168.3 million
* Revenue per available room (revpar) up 5.0% to #52.73; a continuing
out-performance against the UK market
* Profit before asset sales and tax up 4.3% to #29.4 million
Highlights 28 weeks % change 28 weeks
ended ended
15/07/01 09/07/00
Turnover (#m) 168.3 4.4 161.2
Revenue per available room (#) 52.73 5.0 50.24
Hotel gross profit before fixed charges 89.8 4.5 85.9
(#m)
EBITDA (#m) 67.0 4.0 64.4
Operating profit (#m) 49.8 2.5 48.6
Profit before taxation and asset disposals 29.4 4.3 28.2
(#m)
Adjusted earnings per share (p) 4.6 (2.1) 4.7
Interim Dividend per share (p) 1.7 - 1.7
Commenting on the results, David Newbigging, Chairman, said "the first 28
weeks trading in 2001 can be split into two distinct periods, with turnover
ahead by 11.9% against last year in the first 12 weeks, but turnover flat
compared to last year in the final 16 weeks of the period. The worldwide
economic slowdown, particularly in the US, coupled with the foot and mouth
outbreak in the UK have led to a marked reduction in visitors to the UK which
has continued into the second half year. We are pleased that over the first
half year our percentage growth in revpar outperformed the UK hotel market in
both London and the Regions"
In relation to the outlook he added, "our business and balance sheet are in
good condition and the Board is confident about the Group's prospects.
Against this background we believe there will be opportunities to improve and
rebalance our current hotel portfolio. However, we remain cautious about
short term trading given the general worldwide economic uncertainty."
Enquiries:
Thistle Hotels Plc
Ian Burke, Chief Executive (020 7895 2304)
Hogarth Partnership Limited
Nick Denton (020 7357 9477)
NOTES TO EDITORS
Thistle is the largest hotel group in London with 22 hotels in prime
locations throughout the capital and has hotels in key regional cities of
England, Scotland and Wales.
There are 56 hotels in the group with a total of 10,723 bedrooms. In London,
Thistle has 6,014 rooms in 22 hotels and, in the regions, 4,709 rooms in 34
hotels.
Thistle's London hotels include the Thistle Tower, the Thistle Charing Cross,
the Thistle Marble Arch, the Thistle City Barbican, the Thistle Victoria and
The Royal Horseguards. Thistle has hotels in Aberdeen, Bristol, Birmingham,
Cardiff, Edinburgh, Glasgow, Liverpool, Manchester and Newcastle among other
regional centres as well as hotels at airports in Aberdeen, East Midlands,
Gatwick, Heathrow, Luton and Manchester.
CHAIRMAN'S STATEMENT
The first 28 weeks trading in 2001 can be split into two distinct periods.
The first 12 weeks saw a continuation of the strong performance achieved in
the second half of 2000. Turnover increased by 11.9% with strong growth in
both London and the regions. In the final 16 weeks of the period, however,
two external factors had a significant impact on the hotel market and on
London in particular. The worldwide economic slowdown, particularly in the
US, coupled with the foot and mouth outbreak in the UK have led to a marked
reduction in visitors to the UK. This in turn has reduced demand for hotel
rooms with the consequence that turnover in the final 16 weeks was level with
2000. Despite this fall-off Thistle has continued to improve its position in
terms of revenue per available room (revpar) percentage growth relative to
the market.
Overall, for the first 28 weeks of 2001 turnover increased by 4.4% to #168.3
million (2000: #161.2 million). Before asset sales, profit before tax
improved by 4.3% to #29.4 million (2000: #28.2 million). The Board has
declared an unchanged interim dividend of 1.7 pence per share. This will be
paid on 16 November 2001 to shareholders on the register as at 19 October
2001.
A key objective remains to improve cash flow and to reduce the level of debt.
As indicated in the 2000 Annual Report, there is a reduced need for capital
expenditure from 2001. Capital expenditure in the period was #25.6 million
(2000: #39.9 million) with capital expenditure for the current financial year
anticipated to be around #42 million (2000: #66.3 million).
The second half year has started slowly in the first six weeks against a
strong comparative period last year. Our business and balance sheet are in
good condition and the Board is confident about the Group's prospects.
Against this background we believe there will be opportunities to improve and
rebalance our current hotel portfolio. However, we remain cautious about
short term trading given the general worldwide economic uncertainty.
OPERATING AND FINANCIAL REVIEW
28 Weeks 28 Weeks % 53 Weeks
ended ended Change ended
15/07/01 09/07/00 31/12/00
London
Occupancy (%) 75.9 79.8 (4.9) 82.2
Average room rate (#) 84.70 77.81 8.9 80.94
Revenue per available room (#) 64.29 62.09 3.5 66.53
Turnover (#m) 104.1 101.4 2.7 203.6
Regions
Occupancy (%) 66.5 64.2 3.6 67.5
Average room rate (#) 57.02 54.36 4.9 54.13
Revenue per available room (#) 37.92 34.90 8.7 36.54
Turnover (#m) 64.2 59.8 7.4 121.0
Total
Occupancy (%) 71.8 73.0 (1.6) 75.8
Average room rate (#) 73.44 68.82 6.7 70.49
Revenue per available room (#) 52.73 50.24 5.0 53.43
Turnover (#m) 168.3 161.2 4.4 324.6
LONDON
London began the first half strongly with turnover up 10.9%, compared to last
year, and revenue per available room up 13.2% in the first 12 weeks of the
period. A significant reduction in visitors to the UK, as a result of the US
economic slowdown and the foot and mouth outbreak in particular, resulted in
reductions in turnover and revpar of 2.2% and 1.8% respectively in the final
16 weeks of the period compared to last year.
For the first half as a whole, turnover increased by 2.7% to #104.1 million
(2000: #101.4 million) and revpar increased by 3.5% to #64.29 (2000: #62.09).
Gross profit before fixed charges improved 2.5% to #61.0 million (2000: #59.5
million) - a margin of 58.6% (2000: 58.7%).
Capital expenditure at #11.4 million was spent principally on bedroom
upgrades (#7.6 million) and hotel infrastructure maintenance (#3.4 million).
A total of 551 bedrooms were refurbished during the first half, with major
room upgrades completed at the Thistle City Barbican, Kings Cross and Euston
hotels.
REGIONS
Our regional hotels also began the first half strongly with turnover up 13.2%
and revenue per available room up 14.3% in the first 12 weeks. Being less
reliant on inbound US travellers, our regional hotels held up better than
London over the final 16 weeks of the period, with turnover up 3.8% and
revenue per available room up 5.5%.
Overall for the first half turnover was up 7.4% to #64.2 million (2000: #59.8
million) and revenue per available room was up 8.7% to #37.92 (2000: #34.90).
Gross profit before fixed charges improved 9.1% to #28.8 million (2000: #26.4
million) - a margin of 44.9% (2000:44.1%).
Capital expenditure at #11.6 million was spent on bedroom upgrades (#5.0
million), food and beverage outlets (#1.8 million), leisure facilities (#2.2
million) and infrastructure maintenance (#2.6 million). A further 614
bedrooms were refurbished during the first half, with major room upgrades
completed at the Thistle Manchester, Luton and Heathrow Park hotels.
SALES AND MARKETING
Our commitment to developing the Thistle brand has prompted us to undertake
some primary market research amongst UK business travellers, which has
highlighted that there is clearly a different perception of the Thistle brand
between users (generally positive) and non-users (who generally perceive the
brand to be outdated). Once the non-users experience the product, feedback is
positive.
Independent surveys suggest we are making good progress with the brand. In
the BDRC British Hotel Guest Survey the Thistle brand moved up the Brand
Ranking Index from =13th in 1999 to 9th in 2000.
Good progress was also made in rolling out leisure and food and beverage
concepts. One new Otium leisure centre was opened at the Thistle Glasgow and
two existing unbranded leisure centres at the Thistle Brighton and the
Thistle Manchester were re-branded as Otium, taking the total to 12. Gary
Rhodes' new restaurant, "A Touch of Rhodes" will open in mid September at the
Thistle Manchester; our fourth Gengis restaurant opened at the Thistle Luton
and our newest restaurant concept, The Oak and Avocado, opened at the Thistle
St Albans and the Thistle Stevenage.
The shift towards higher yielding corporate business continued in the first
half, with corporate guests accounting for 58.5% of room nights sold compared
to 52.7% last year. Our marketing programmes targeting the corporate business
segment contributed to this growth, although some of this change may be due
to the external factors mentioned above which had a greater impact on our
leisure business than on our corporate business.
We continue to focus on reducing reservations costs by channelling more
bookings through electronic channels, such as our own website and the Global
Distribution Systems (GDS) and also by taking more bookings through our
Central Reservations Office (CRO). In the first half website bookings
increased by over 200%, GDS bookings by over 25% and CRO bookings by over 40%
compared to last year.
INFORMATION TECHNOLOGY
A new sales, conference and banqueting management system has been installed
in 6 hotels and by year end will be rolled out to 22 hotels. Benefits include
greater sales force productivity and more efficient and responsive management
of meetings and events.
We have completed the evaluation of a revenue yield management system which
is now installed in 5 hotels and will be installed in a further 16 hotels by
year end.
FINANCE
Turnover increased by 4.4% to #168.3 million (2000: #161.2 million) and
revenue per available room increased by 5.0% to #52.73 (2000: #50.24), with a
6.7% increase in average room rate offset by a 1.2 percentage point reduction
in occupancy.
Room rates were comfortably ahead of last year in both the first and second
quarters. The impact of the significant reduction in visitors to the UK is
seen in the occupancy figures, which were 2.4 percentage points ahead of last
year in the first quarter but 3.9 percentage points down in the second
quarter.
Profit before tax and asset disposals was up 4.3% to #29.4 million (2000:
#28.2 million). No profits on disposal of assets were booked in the first
half of 2001 (2000: #1.2 million profit before tax).
During the first half year we agreed to sell our freehold Leeds support
office site for redevelopment. A profit on disposal in excess of #2.0 million
(before tax), will be booked on completion in 2002. We have also signed a
lease for purpose built new offices in Leeds to house our support staff from
mid 2002.
In August, we agreed to sell our hotel in Poole to Orb Estates plc for a
profit of #3.5 million compared to book value. We expect to complete the sale
before the end of December 2001 and to retain a management contract at least
until the site is redeveloped.
The Group's tax rate is projected to rise from 20% in 2000 to 25% in 2001.
Reducing capital expenditure, and therefore capital allowances, increases the
proportion of profit which is subject to tax at our marginal rate of 30% and
causes the effective rate to rise to 23%. The further increase to 25% results
from proposed changes to tax legislation.
Adjusted earnings per share are 2.1% lower than last year with the
improvement in pre-tax profit before asset sales being more than offset by
the higher tax rate.
Net borrowings increased by #22.8 million to #451.7 million in the first half
principally due to changes in the timing of tax payments, reversing a benefit
the Group enjoyed in 2000. Other cash movements, principally lower operating
cash flow, were offset by lower capital expenditure.
THISTLE HOTELS Plc
GROUP PROFIT & LOSS ACCOUNT
for the 28 weeks ended 15 July 2001
28 weeks 28 weeks 53 weeks
ended ended ended
15/07/01 09/07/00 31/12/00
Notes #'m #'m #'m
Turnover 2 168.3 161.2 324.6
Cost of sales (105.4) (100.7) (196.8)
Gross profit 2 62.9 60.5 127.8
Administrative (13.1) (11.9) (22.4)
expenses
Operating 49.8 48.6 105.4
profit
Profit on sale 0.0 1.2 1.2
of tangible
fixed assets
Interest (20.4) (20.4) (38.4)
payable and
similar charges
Profit before 29.4 29.4 68.2
taxation
Taxation 3 (7.3) (5.5) (13.4)
Profit after 22.1 23.9 54.8
taxation
Dividends 4 (8.2) (8.2) (24.6)
Transfer to 13.9 15.7 30.2
reserves
Earnings per 5 4.6 p 5.0 p 11.4 p
share
Diluted 5 4.6 p 5.0 p 11.4 p
earnings per
share
Adjusted 5 4.6 p 4.7 p 11.1 p
earnings per
share
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
28 weeks 28 weeks 53 weeks
ended ended ended
15/07/01 09/07/00 31/12/00
#'m #'m #'m
Profit for the 22.1 23.9 54.8
period and
total gains and
losses relating
to the period
Prior year 0.0 (66.8) (66.8)
adjustment
Total gains and
losses
recognised
since last 22.1 (42.9) (12.0)
annual report
THISTLE HOTELS Plc
GROUP BALANCE SHEET
at 15 July 2001
15/07/01 09/07/00 31/12/00
#'m #'m #'m
Fixed assets
Tangible assets 1,636.4 1,615.1 1,628.0
Current assets
Stocks 1.2 1.1 1.4
Debtors 42.5 43.2 31.0
Cash at bank and in hand 2.2 3.6 4.4
45.9 47.9 36.8
Creditors (due within one year) (159.1) (103.2) (90.5)
Net current liabilities (113.2) (55.3) (53.7)
Total assets less current liabilities 1,523.2 1,559.8 1,574.3
Creditors (due after one year) (368.3) (433.3) (433.3)
Net assets 1,154.9 1,126.5 1,141.0
Capital and reserves
Called up share capital 123.6 123.6 123.6
Share premium account 398.5 398.5 398.5
Revaluation reserve 446.0 446.0 446.0
Other reserves 50.8 50.8 50.8
Profit and loss account 136.0 107.6 122.1
Total equity shareholders' funds 1,154.9 1,126.5 1,141.0
RECONCILIATION OF MOVEMENTS IN EQUITY
SHAREHOLDERS' FUNDS
15/07/01 09/07/00 31/12/00
#'m #'m #'m
Profit for the period 22.1 23.9 54.8
Dividends (8.2) (8.2) (24.6)
Issue of share capital - 0.5 0.5
Net change in the period 13.9 16.2 30.7
Opening equity shareholders' funds
as previously stated 1,141.0 1,177.1 1,177.1
Prior year adjustment - (66.8) (66.8)
Opening equity shareholders' funds 1,141.0 1,110.3 1,110.3
as restated
Closing equity shareholders' funds 1,154.9 1,126.5 1,141.0
THISTLE HOTELS Plc
GROUP CASH FLOW STATEMENT
for the 28 weeks ended 15 July 2001
28 28 53 weeks
weeks weeks
ended ended ended
15/07/01 09/07/00 31/12/00
Note #'m #'m #'m #'m #'m #'m
Cash flow from 6 62.8 69.2 152.8
operating
activities
Returns on
investments
and servicing
of finance
Interest paid (19.2) (18.1) (36.6)
Taxation paid (24.5) (1.0) (3.1)
Capital
expenditure
Purchase of (25.6) (39.9) (66.3)
tangible fixed
assets
Sale of 0.1 9.1 9.1
tangible fixed
assets
(25.5) (30.8) (57.2)
Equity
dividends paid
Ordinary (16.4) (15.4) (23.6)
dividends paid
Cash inflow / (22.8) 3.9 32.3
(outflow)
before
financing
Financing
Issue of share - 0.5 0.5
capital
Loans repaid - - (0.5)
- 0.5 -
(Decrease) / (22.8) 4.4 32.3
increase in
cash
RECONCILIATION OF NET DEBT
28 28 53 weeks
weeks weeks
ended ended ended
15/07/01 09/07/00 31/12/00
#'m #'m #'m
(Decrease) / (22.8) 4.4 32.3
increase in
cash
Cash flow from - - 0.5
decrease in
debt
Reclassification - (0.1) (0.1)
of current
asset
investment
Movement in (22.8) 4.3 32.7
net debt in
the period
Net debt at (428.9) (461.6) (461.6)
beginning of
the period
Net debt at (451.7) (457.3) (428.9)
end of the
period
THISTLE HOTELS Plc
NOTES TO THE INTERIM FINANCIAL INFORMATION
1. Basis of Preparation
The interim financial information, which is unaudited, has been prepared on
the basis of the accounting policies set out in the 2000 Annual Report and
Accounts.
The results have been reviewed and reported on by the Group's auditors,
PricewaterhouseCoopers. The figures for the 53 weeks ended 31 December 2000 are
an abridged version of the Group's statutory accounts for that period, which,
together with an unqualified audit report, have been filed with the
Registrar of Companies.
The interim financial information was approved by the Board on 4 September
2001.
2. Segment Analysis 28 weeks 28 weeks 53 weeks
ended ended ended
15/07/01 09/07/00 31/12/00
#m #m #m
Turnover by UK region
London 104.1 101.4 203.6
Regions 64.2 59.8 121.0
Total Group Turnover 168.3 161.2 324.6
Gross profit before fixed charges by UK
region
London 61.0 59.5 120.9
Regions 28.8 26.4 54.7
Total gross profit before fixed charges 89.8 85.9 175.6
Fixed charges (26.9) (25.4) (47.8)
Total Group gross profit 62.9 60.5 127.8
Fixed charges comprise property rent, rates and insurance, depreciation and
amortisation.
We have reclassified our Heathrow property from a London hotel to a regional
hotel, which is more in line with the way industry data is reported. Last year's
comparatives have been restated accordingly.
3. Taxation
The taxation charge for the 28 weeks ended 15 July 2001 is based upon the
estimated effective tax rate for the full year.
4. Dividends
The Board has declared an interim dividend of 1.7 pence per share (2000: 1.7
pence per share).
5. Earnings per share
Earnings per share of 4.6 pence (2000: 5.0 pence) are based on the Group's
profit after taxation of #22.1 million (2000: #23.9 million) and on the average
number of shares in issue during the period of 481.9 million (2000: 481.9
million).
Diluted earnings per share of 4.6 pence (2000: 5.0 pence) takes into account,
in addition to the average number of shares noted above, dilutive potential
ordinary shares arising from employee share options of 2.9 million (2000: 0.3
million).
THISTLE HOTELS Plc
NOTES TO THE INTERIM FINANCIAL INFORMATION
5. Earnings per share (continued)
Adjusted earnings per share of 4.6 pence (2000: 4.7 pence) are based on the
Group's profit after taxation, but before the profit on sale of tangible fixed
assets, of #22.1 million (2000: #22.7 million). No taxation charge has been
attributed to the profit on sale of tangible fixed assets in this calculation.
6. Reconciliation of operating profit to net cash inflow
from operating activities 28 weeks 28 weeks 53 weeks
ended ended ended
15/07/01 9/7/00 31/12/00
#'m #'m #'m
Operating profit 49.8 48.6 105.4
Depreciation 17.2 15.8 29.3
Decrease in stocks 0.2 0.3 -
(Increase) / decrease in debtors (11.5) (7.6) 4.5
Increase / (decrease) in creditors 7.1 12.1 13.6
Net cash inflow from operating 62.8 69.2 152.8
activities
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