TIDMEZH
RNS Number : 0170P
easyHotel PLC
03 June 2015
3 June 2015
easyHotel plc
Interim results for the six months ended 31 March 2015 and Board
changes
Continued investment for profitable growth
easyHotel plc ("easyHotel") (AIM:EZH), the owner, developer,
operator and franchisor of "super budget" branded hotels, today
announces its results for the six months ended 31 March 2015.
Financial Highlights
-- Revenue up 104% to GBP2.59m (31 March 2014: GBP1.27m)
-- Profit before tax (excluding corporate office expenses) up
122% to GBP1.35m (31 March 2014: GBP0.61m)
-- Adjusted EBITDA (before one-off items) up 6% to GBP0.52m (31 March 2014: GBP0.49m)
-- Profit before tax up 7% to GBP0.37m (31 March 2014: GBP0.34m)
-- Basic earnings per share of 0.4p
Business Highlights
-- Robust trading in all owned hotels
-- Total operating hotel rooms increased by 12% since 30
September 2014 with easyHotel Croydon (103 rooms) successfully
opened in November 2014 and running according to plan
-- Acquisition of a freehold building in Liverpool following the
period end should (subject to successful planning consent) increase
owned rooms by 17%, with the hotel expected to open in Spring
2016
-- Several opportunities currently being assessed to expand our
owned hotel portfolio in the UK and continental Europe
-- Franchised hotel in Frankfurt opened in January 2015 and the
pipeline includes easyHotel Prague, due to open on 5 June 2015
-- The Group has a number of ongoing discussions regarding new franchise contracts
-- New multilingual and responsive website launched and improved
marketing initiatives implemented (with specific focus on digital
marketing strategy) as well as improvements in customer service
processes
Commenting on the results, Simon Champion, Chief Executive
Officer said:
"easyHotel has continued to perform well, with a doubling of
revenue year on year driven primarily by an increase in the
capacity of our owned hotel portfolio. Profit growth has been
dampened this year because of the additional costs incurred by
being a public company, as well as the Group investing to meet
significant development targets. Our expansion strategy is
progressing well, with a new site acquired in Liverpool expected to
open in Spring 2016. In addition, there has been an ongoing
commitment to marketing and enhancing our customer experience, with
a new website launched in March 2015 and a focus on improved
customer service.
"Trading for the year ending 30 September 2015 continues in line
with the Board's expectations and we remain confident that we can
secure properties in the UK and key European gateway cities and
continue to expand our franchised hotels elsewhere, delivering a
high return on investment for our shareholders."
Board Changes
Having steered easyHotel through its successful IPO, Jan G.
Astrand, Executive Chairman, has decided to spend more time on his
other business activities in the UK and abroad. Consequently he has
decided to step down from his role and will leave his
responsibilities at the Company on 1 July 2015. The Board expresses
its thanks to Jan for his contribution to the development of
easyHotel.
The Board is pleased to announce that Jonathan Lane, currently
Non-executive Director, has been appointed Non-executive Chairman
with effect from 2 July 2015. Jonathan, who is current
non-executive Chairman of Shaftesbury PLC, has a wealth of
experience at the board level of UK public companies and is ideally
positioned to guide the Board as Chairman on its growth
strategy.
Following the above changes to the Board of Directors, Scott
Christie, Non-executive Director, will become chairman of the
remuneration committee, in addition to his role as chairman of the
audit committee.
Enquiries:
easyHotel Plc www.easyhotel.com
Simon Champion, Chief Executive http://ir.easyhotel.com
Officer
Marc Vieilledent, Chief Financial
Officer
Investec (Nominated Adviser
and Broker) +44 (0) 20 7597 4000
Chris Treneman / David Anderson
Hudson Sandler (Financial PR) +44 (0) 20 7796 4133
Michael Sandler / Wendy Baker
/ Emily Dillon
Notes to Editors:
easyHotel is the owner, developer, operator and franchisor of
branded hotels. Its strategy is to target the "super budget"
segment of the hotel industry by marketing "clean, comfortable and
safe" hotel rooms to its customers. easyHotel currently has three
owned hotels comprising 390 rooms, and a further 17 franchised
hotels with approximately 1,400 rooms.
Owned hotels: Old Street (London), Glasgow, Croydon
Franchise locations: Bulgaria (Sofia), Czech Republic (Prague)
due to open on 5 June 2015, Germany (Berlin, Frankfurt), Hungary
(Budapest), The Netherlands (Amsterdam, Rotterdam, The Hague),
Switzerland (Basel, Zurich), UAE (Dubai), UK (Edinburgh,
London)
Overview
easyHotel continues to perform well and deliver its strategy.
Revenue in the first half was double that of the same period last
year, driven primarily by an additional 173 rooms in our owned
hotel portfolio. We have moved forward with our owned hotel
expansion plans, with easyHotel Croydon opening in November 2014
and a new hotel development site acquired in Liverpool (expected to
open in Spring 2016).
Since admission to AIM there has been an ongoing focus on
enhancing the Group's marketing capabilities and improving our
customer experience and service. A solid platform is now in place
for scaling up the business in line with the Group's stated growth
strategy.
Financial Performance
Total revenue increased by 104% to GBP2.59m (31 March 2014:
GBP1.27m), driven by the expansion of our owned hotel
portfolio.
Owned hotel revenue increased by 155% to GBP1.71m (31 March
2014: GBP0.67m), reflecting the opening of easyHotel Croydon in
November 2014, which added a further 103 rooms, and the addition of
70 rooms at easyHotel Old Street in April 2014. Occupancy for owned
hotels was 69%, ADR was GBP35 and RevPAR was GBP24. This is a
positive performance considering the recent Croydon opening,
increase in Old Street capacity and the fact that the first half of
the year is historically an off-peak season for the business. Owned
hotel profit before tax is up 224% to GBP0.75m (31 March 2014:
GBP0.23m) driven by the revenue increase and continued focus on
operating costs control.
A one-off fee of GBP0.27m was recognised during the period in
relation to the termination of the franchisee agreement with a
South African franchisee (60 rooms). Franchised hotel revenue
(excluding the one-off fee release relating to the South African
franchisee) is up 5% to GBP0.61m (31 March 2014: GBP0.58m).
Franchised hotel profit before tax rose to GBP0.59m (31 March 2014:
GBP0.37m).
Corporate office costs increased by GBP0.72m to GBP0.97m in
first half 2015, primarily as a result of higher staff costs and
professional fees. The increased costs are largely a consequence of
becoming a listed company as well as building a foundation for the
future growth of the business.
There was an unrealised foreign exchange loss of GBP0.21m
(included in finance expenses) on amounts due from a franchisee in
the Benelux region, as highlighted in the balance sheet analysis
below.
Overall Group profit before tax was up 7% to GBP0.37m (31 March
2014: GBP0.34m) and adjusted EBITDA (before exceptional and one-off
items) up 6% to GBP0.52m (31 March 2014: GBP0.49m). Basic earnings
per share was 0.4p - this is not deemed comparable with the prior
year given the significant change in number of shares post IPO.
Review of operations
During the first half, the Group invested in marketing and
customer service initiatives to drive revenue and improve our
customer experience.
In March 2015, the Group launched a new multi-platform website
at www.easyhotel.com in seven languages. The new website has been
designed with mobile devices in mind, which are used for 40% of our
customer visits (up from 6% in 2011). The website design enhances
our customer booking experience and is expected to drive an
increase in owned hotel revenues and direct bookings for
franchisees. All owned hotel bookings are made via our own website,
and higher direct bookings also makes our franchising model more
attractive by lowering distribution costs.
The appointment of a marketing manager has helped accelerate the
improvement in organic and paid digital search campaigns, improve
search engine optimisation, and enhance overall marketing
strategies which will benefit both owned and franchised hotels. The
Group is looking at a number of partnerships to further broaden
consumer recognition of the easyHotel brand.
In addition, the Group has recently launched a new online
customer helpdesk service, which enables easyHotel to better manage
customer queries and complaints for both owned and franchised
hotels. The Group is also implementing strategies to improve
customer feedback, including a service that invites all customers
to provide feedback on their stay. These initiatives will help
deliver ongoing improvements to our operations and customer
service, as well as ensuring franchisees maintain the prescribed
level of service.
Owned hotels
Revenues in owned hotels have risen significantly in the period.
Some of this is due to new openings, and quite encouragingly also
due to Old Street, which showed RevPAR growth despite a 76%
increase in capacity. This rise at Old Street is a reflection of
the benefit of refurbishment in Summer 2014 and increased
operational focus, and also highlights a latent demand for budget
hotel rooms in the Old Street area.
The Group remains in discussions with Islington Council
regarding obtaining retrospective planning permission for parts of
the Old Street property. It is anticipated that this process will
be ongoing for some time.
A high-speed Wi-Fi network was installed in easyHotel Old
Street. This is proving to be a profitable revenue stream whilst
adding to the overall customer experience. A wider rollout of the
Wi-Fi service is now underway, with easyHotel Croydon also now live
and installation at easyHotel Glasgow expected in the second
half.
Expansion
easyHotel's principal growth strategy is the roll-out of further
owned hotels in the UK and major European gateway cities. In line
with this strategy, we were pleased to announce the recent
acquisition of a freehold property which, when converted to an
easyHotel, will increase the number of owned hotel rooms by 17% to
c.458 rooms.
Our focus is on the conversion of commercial properties into
hotels, and the search for suitable properties is progressing with
several prospects currently being considered. Our focus remains on
achieving a hurdle mature rate of return of at least 15% on new
property acquisitions (EBITDA divided by capital invested).
Franchised hotel growth will continue to be a focus for the
Group and a number of franchisee opportunities are currently being
assessed.
Owned development pipeline
We have accelerated our research efforts and extended our real
estate broker network to ensure we make progress with our strategy
of acquiring hotel development sites. This has resulted in our
recent purchase outlined below, as well as highlighting several
potential acquisition targets which are currently under
consideration.
On 16 April 2015, the Group announced the acquisition of a
freehold office building and restaurant at 47 Castle Street in
Liverpool. Subject to planning consent, it is the Group's intention
to convert the four upper floors of the building into a 68-bedroom
easyHotel and the ground floor of the building will remain a
restaurant operated by a third party. In total, the purchase of the
building and conversion project is expected to cost around GBP3m.
The property is centrally located for both leisure and business
customers being within walking distance of shops, tourist
attractions such as the Cavern Club, transport links, and the
Albert Docks. easyHotel Liverpool is expected to open in Spring
2016.
Franchise development
Our franchise partners continue to add to their existing assets
and there are a number of new hotels in the pipeline. In January
2015, easyHotel Frankfurt, a 132-bedroom hotel located in the heart
of Frankfurt, was successfully opened and is the second franchised
easyHotel in Germany. easyHotel Prague, a 88-bedroom hotel, is
expected to open on 5 June 2015.
The Group is benefiting from the appointment of a Global
Franchising Director who is evaluating many franchise enquiries as
well as proactively sourcing new opportunities. We continue to
explore further development opportunities with existing franchise
partners.
Cash flows/Balance Sheet
During the first half of the year, our operating activities
generated GBP0.8m of cash, with a total net use of cash of GBP1.3m
after net financial expenses, investments and share purchases.
At 31 March 2015, we had GBP23m of cash reserves giving us
significant capacity to continue acquiring suitable properties that
deliver our hurdle rate of return.
In October 2014 the Board announced that it had been in
discussions about the potential acquisition of its Benelux
franchisee, a transaction which the Board subsequently decided not
to pursue. As part of the negotiations the Group entered into an
agreement to lend the franchisee EUR850k and provide a EUR3.3m
deposit to secure a potential new Belgian franchised hotel property
development.
The Board confirms that the EUR850k loan was repaid after the
period end as part of a material refinancing by a large private
equity fund of the Benelux franchisee. The Board is also encouraged
that its Benelux franchisee has now secured a strong backer to help
it continue to grow. As part of the franchisee refinancing
arrangements the Group has agreed to extend the repayment date of
the EUR3.3m deposit on the potential new Belgian franchised hotel
property. Interest will accrue on this deposit to easyHotel at a
rate of 10% per annum payable from 2 April 2015 and a failure to
repay it prior to receipt of the project's planning permission will
result in the franchisee relinquishing its rights to the Benelux
Master Franchise and easyHotel assuming ownership and control of
this potentially attractive hotel development.
GBP962,218 has been spent this financial year by the Employee
Benefit Trust on share purchases. At 31 March 2015 1,125,000 shares
are held by the Employee Benefit Trust (112,500 shares held at 30
September 2014).
Dividends
As previously announced, the Board believes that, despite being
in a growth stage and investing significant amounts of capital,
easyHotel should pay dividends of 30%-50% of post-tax profits on a
regular basis. In the absence of exceptional circumstances the
Board expects to pay its maiden dividend, for the year ended 30
September 2015, in April 2016.
Outlook
Since 1 October 2014, activity and profit in our owned hotels
have been robust. Our newly opened Croydon hotel, which has been
profitable since its first full month of operation, has seen
trading improve every month and management is satisfied with how
trading is maturing.
Following a period of investment in marketing and customer
service initiatives the Group's owned and franchised hotels will
benefit from the launch of the new website and marketing strategies
that are being implemented.
Current trading is in line with the Board's expectations,
despite the impact of the weak Euro on the UK hotel activity. The
Board remains confident that we can secure properties in the UK and
key European gateway cities and expand our franchised hotels
elsewhere, delivering a high return on investment for
shareholders.
GROUP STATEMENT OF COMPREHENSIVE INCOME
for the period ended 31 March2015
Unaudited Audited Audited
6 months ended 6 months year ended
31/03/2015 ended 31/03/2014 30/09/2014
GBP GBP GBP
Note
================================ ====== ==================== ================= =================
System Sales 9,021,333 8,013,269 17,327,350
-------------------------------- ------ -------------------- ----------------- -----------------
Revenue 2 2,589,327 1,270,203 3,543,948
Cost of sales (834,039) (310,713) (1,158,444)
================================ ====== ==================== ================= =================
Gross profit 1,755,288 959,490 2,385,504
Administrative expenses 3 (1,148,570) (580,804) (1,702,747)
Operating profit 606,718 378,686 682,757
-------------------------------- ------ -------------------- ----------------- -----------------
Analysed as:
Adjusted EBITDA* 3 518,715 488,260 1,729,918
Accelerated Initial Fee Release 2 269,500 - -
Restructuring and listing
costs - - (555,499)
Depreciation (179,166) (109,574) (410,771)
Share based payments 3 (2,331) - (80,891)
-------------------------------- ------ -------------------- ----------------- -----------------
606,718 378,686 682,757
-------------------------------- ------ -------------------- ----------------- -----------------
Finance income 4 38,491 - 16,640
Finance expense 4 (279,857) (36,165) (126,822)
Profit before taxation 365,352 342,521 572,575
Taxation (121,587) (75,354) (164,656)
================================ ====== ==================== ================= =================
Profit for the period 243,765 267,167 407,919
================================ ====== ==================== ================= =================
Other comprehensive income
- - -
================================ ====== ==================== ================= =================
Total comprehensive income 243,765 267,167 407,919
================================ ====== ==================== ================= =================
Attributable to equity holders
of the Company 243,765 267,167 407,919
================================ ====== ==================== ================= =================
Earnings per share
Basic & diluted (pence) 8 0.4 1.1 1.2
================================ ====== ==================== ================= =================
*Adjusted EBITDA represents Earnings before Interest, Taxation
and Depreciation adjusted for accelerated initial fee releases,
restructuring and listing costs, and share based payment
charges.
GROUP STATEMENTOF CHANGES IN EQUITY
for the period ended 31 March 2015
6 months ended 31
March
2014
Audited
Share Share Merger EBT Retained
capital premium reserve reserve Earnings Total
GBP GBP GBP GBP GBP GBP
================== ======== ========== ============== =========== ================= ========================
At 30 September
2013 250,000 - 2,750,001 - 413,968 3,413,969
Total
comprehensive
income
for the period - - - - 267,167 267,167
Balance at 31
March
2014 250,000 - 2,750,001 - 681,135 3,681,136
================== ======== ========== ============== =========== ================= ========================
12 months
ended 30
September
2014
Audited
Share Share Merger EBT Retained
capital Premium reserve reserve Earnings Total
GBP GBP GBP GBP GBP GBP
================== ======== ========== ============== =========== ================= ========================
At 30 September
2013 250,000 - 2,750,001 - 413,968 3,413,969
Shareholder
capitalization
of loans 59,487 4,699,493 - - - 4,758,980
Share issue less
costs 315,513 23,892,543 - - - 24,208,056
Share based
payment
charge - - - - 80,891 80,891
EBT share
purchases - - - (105,187) - (105,187)
Total
comprehensive
income
for the year - - - - 407,919 407,919
Balance at 30
September
2014 625,000 28,592,036 2,750,001 (105,187) 902,778 32,764,628
================== ======== ========== ============== =========== ================= ========================
6 months
ended 31
March
2015
Unaudited
Share Share Merger EBT Retained
capital premium reserve Reserve Earnings Total
GBP GBP GBP GBP GBP GBP
================== ======== ========== ============== =========== ================= ========================
At 30 September
2014 625,000 28,592,036 2,750,001 (105,187) 902,778 32,764,628
Share based
payment
charge - - - - 2,331 2,331
EBT share
purchases - - - (962,218) - (962,218)
Total
comprehensive
income
for the period - - - - 243,765 243,765
Balance at 31
March
2015 625,000 28,592,036 2,750,001 (1,067,405) 1,148,874 32,048,506
------------------ -------- ---------- -------------- ----------- ----------------- ------------------------
GROUP STATEMENT OF FINANCIAL POSITION
at 31 March 2015
Unaudited Audited Audited
6 months ended 6 months year ended
Note 31/03/2015 ended 31/03/2014 30/09/2014
GBP GBP GBP
============================== ======== ========================== ======================= ===============
Assets
Non-current assets
Intangibles 59,536 - -
Property, plant and
equipment 19,418,278 16,781,799 18,795,738
Total non-current assets 19,477,814 16,781,799 18,795,738
Current assets
Trade and other receivables 5 781,432 368,611 922,823
Cash and cash equivalents 6 23,011,035 2,362,315 24,263,974
============================== ======== ========================== ======================= ===============
Total current assets 23,792,467 2,730,926 25,186,797
============================== ======== ========================== ======================= ===============
Total assets 43,270,281 19,512,725 43,982,535
============================== ======== ========================== ======================= ===============
Liabilities
Non-current liabilities
Trade and other payables 7 167,200 448,409 435,196
Bank borrowings 7,200,000 7,200,000 7,200,000
Deferred tax liability 94,257 81,089 113,755
============================== ======== ========================== ======================= ===============
Total non-current liabilities 7,461,457 7,729,498 7,748,951
Current liabilities
Trade and other payables 7 3,592,931 8,017,053 3,417,282
Corporate taxation 167,387 85,038 51,674
Total current liabilities 3,760,318 8,102,091 3,468,956
============================== ======== ========================== ======================= ===============
Total liabilities 11,221,775 15,831,589 11,217,907
============================== ======== ========================== ======================= ===============
Total net assets 32,048,506 3,681,136 32,764,628
============================== ======== ========================== ======================= ===============
Equity
Equity attributable to
owners of the Company
Share capital 625,000 250,000 625,000
Share premium 28,592,036 2,750,001 28,592,036
Merger reserve 2,750,001 - 2,750,001
EBT reserve (1,067,405) - (105,187)
Retained earnings 1,148,874 681,135 902,778
Total equity 32,048,506 3,681,136 32,764,628
======================== ================== ================== ===============
GROUP STATEMENT OF CASH FLOWS
for the period ended 31 March 2015
Unaudited Audited Audited
6 months ended 6 months ended year ended
31/03/2015 31/03/2014 30/09/2014
GBP GBP GBP
Cash flows from operating activities
Profit before taxation for the period 365,352 342,521 572,575
Adjustments for:
Depreciation of property, plant
and equipment 179,166 109,574 410,771
Share based payment charge 2,331 - 80,891
Finance income (38,491) - (16,640)
Finance expense 279,857 36,165 126,822
Operating cash flows before movements
in working capital 788,215 488,260 1,174,419
(Increase)/decrease in trade and
other receivables 141,391 (341,252) (895,464)
Increase/(decrease) in trade and
other payables (92,348) 698,814 830,056
Cash generated from operations 837,258 845,822 1,109,011
Corporation tax paid (25,372) - (90,000)
----------------------------------------- ------------------- ----------------- --------------
Net cash flows from operating activities 811,886 845,822 1,019,011
Finance income 38,491 - 16,640
Finance expense (279,857) (36,165) (126,822)
----------------------------------------- ------------------- ----------------- --------------
Net cash generated from operations 570,520 809,657 908,829
Investing activities
Purchase of property, plant and
equipment (861,241) (5,121,040) (7,436,176)
----------------------------------------- ------------------- ----------------- --------------
Net cash used in investing activities (861,241) (5,121,040) (7,436,176)
Financing activities
Proceeds from issue of ordinary
share capital - - 25,241,020
Capitalised costs related to issue
of ordinary share capital - - (1,032,964)
Related party loan repayments - (1,378,053) (1,363,299)
Outflow from own share purchase (962,218) - (105,187)
Bank loan - 7,200,000 7,200,000
----------------------------------------- ------------------- ----------------- --------------
Net cash generated from/(utilised
by) financing activities (962,218) 5,821,947 29,939,570
========================================= =================== ================= ==============
Net increase/(decrease) in cash
and cash equivalents (1,252,939) 1,510,564 23,412,223
Cash and cash equivalents at the
beginning of the period 24,263,974 851,751 851,751
----------------------------------------- ------------------- ----------------- --------------
Cash and cash equivalents at the
end of the period 23,011,035 2,362,315 24,263,974
========================================= =================== ================= ==============
NOTES TO THE INTERIMFINANCIAL INFORMATION
for the period ended 31 March 2015
1. Basis of accounting
The financial information set out in this interim report has
been prepared under IFRS as adopted by the European Union, taking
into account International Financial Reporting Interpretations
Committee (IFRIC) interpretations and those parts of the Companies
Act 2006 applicable to companies reporting under IFRS. Based on
these adopted IFRSs, the Directors have applied the accounting
policies which they expect to apply when the annual IFRS financial
statements are prepared for the year ending 30 September 2015.
The following new standards, amendments to standards and
interpretations are mandatory for the first time in the current
period and have no significant impact on the Group results or
financial position.
International Accounting Standards ("IAS/IFRS")
IAS 19 (amendment) Defined benefit plans: Employee contributions
IAS 27 (amended) Investments in associates and joint ventures
IAS 32 (amendment) Offsetting financial assets and liabilities
IAS 36 (amendment) Recoverable disclosure for non-financial assets amount
IAS 39 (amendment) Novation of derivatives and continuation of hedge accounting
IFRS 10 Group Financial Statements
IFRS 11 Joint Arrangements
IFRS 12 Disclosure of interest in other entities
IFRIC 21 Levies
The group's accounting policies remain as stated in the group's
full annual accounts for the year ended 30 September 2014, with the
exception of items of property, plant, and equipment which qualify
as plant and machinery which are now depreciated over 8 to 15 years
(2014: 5 years; 2013: 20 years).
This report is not prepared in accordance with IAS 34, which is
not mandatory. This interim report has not been audited but has
been reviewed in accordance with ISRE 2410 by the Company's
auditors BDO LLP. The financial information does not constitute
statutory accounts within the meaning of section 435 of the
Companies Act 2005. Statutory accounts for easyHotel Plc for the
year ended 30 September 2014 reported under IFRS have been
delivered to the Registrar of Companies. The auditors' report on
those accounts was unqualified, did not draw attention to any
matters by way of emphasis and did not contain a statement under
Section 498 (2) or (3) of the Companies Act 2006. Copies of this
report will be posted or provided electronically to shareholders.
Further copies are available free of charge on request from the
Company Secretary at the Company's registered office, easyHotel
House, 80 Old Street, London EC1V 9AZ.
Basis of preparation - going concern
After making appropriate enquiries and having reviewed the
Group's expenditure commitments, current financial projections and
future cash flows, together with available cash resources and
undrawn committed borrowing facilities, the Directors have a
reasonable expectation that the Group has adequate resources to
continue in operational existence for the foreseeable future. For
these reasons, the Directors continue to adopt the going concern
basis in preparing the financial statements.
2. Revenue
Unaudited Audited Audited
6 months ended 6 months year ended
31/03/2015 ended 31/03/2014 30/09/2014
GBP GBP GBP
========================= =================== ================= ===========
Revenue arises from
Owned hotel revenue 1,705,397 668,274 2,275,832
Franchisee hotel revenue 883,728 583,701 1,245,819
Rent received - 17,030 20,030
Brokerage commission 202 1,198 2,267
-------------------------- ------------------- ----------------- -----------
2,589,327 1,270,203 3,543,948
Revenue by location
United Kingdom 1,941,594 945,425 2,808,832
Europe 274,538 233,665 548,754
Rest of the world 373,195 91,113 186,362
-------------------------- ------------------- ----------------- -----------
2,589,327 1,270,203 3,543,948
Franchisee hotel revenue and rest of the world revenue include a
one-off amount of GBP269,500 recognised in relation to the early
termination of easyHotel's franchising agreement with its South
African franchisee.
3. Operating Profit
The following have been included in arriving at operating profit
:
Unaudited Audited Audited
6 months ended 6 months year ended
31/03/2015 ended 31/03/2014 30/09/2014
GBP GBP GBP
============================================ =================== ================= ===========
Staff costs:
* Wages and salaries 647,192 176,401 502,837
* Social security costs 69,404 18,287 48,941
* Staff recruitment and training 46,190 1,015 7,968
============================================= =================== ================= ===========
762,786 195,703 559,746
Depreciation 179,166 109,574 410,771
Share based payments 2,331 - 80,891
--------------------------------------------- ------------------- ----------------- -----------
The share based payment charge for the period ending 31 March
2015 includes a GBP43,166 credit relating to the resignation of
former Chief Financial Officer on 29 January 2015.
4. Finance Income and Expense
Unaudited Audited Audited
6 months 6 months year ended
ended ended 31/03/2014 30/09/2014
31/03/2015 GBP GBP
GBP
Finance income includes
Interest income on financial
assets measured at amortised
cost 28,878 - 16,640
Interest income on amounts due 9,613 - -
from Benelux franchisee
=================================== ================ ========================== ====================
38,491 - 16,640
Finance expense includes
Interest expense on financial
liabilities measured at amortised
cost (89,429) (36,165) (126,822)
Foreign exchange loss (190,428) (3,843) (5,913)
(279,857) (40,008) (132,735)
Foreign exchange loss for the period includes an unrealized loss
of GBP205,522 on amounts due from a Benelux franchisee. On 2
October 2014, the Group deposited EUR3.3m with a Belgian notary to
secure an easyHotel property in Brussels which is intended to be a
franchised hotel. Interest on this deposit is payable to easyHotel
at a rate of 10% per annum from 2 April 2015. The exchange rate
applied at the balance sheet date is GBP1/EUR1.3672.
5. Trade and other receivables
Unaudited Audited Audited
6 months ended 6 months ended year ended
31/03/2015 31/03/2014 30/09/2014
GBP GBP GBP
----------------------------- ------------------------ -------------------- ----------------------
Trade receivables 631,672 270,737 661,535
Less: provision for - - -
impairment of trade
receivables
----------------------------- ------------------------ -------------------- ----------------------
Trade receivables -
net 631,672 270,737 661,535
Receivables from related - 37,386 -
parties
Accrued Income 4,208 - 4,208
------------------------------ ------------------------ -------------------- ----------------------
Total financial assets
other than cash and
cash equivalents classified
as loans and receivables 635,880 308,123 665,743
Prepayments 145,552 13,674 109,403
VAT receivables - 46,814 147,677
Total trade and other
receivables 781,432 368,611 922,823
------------------------------ ------------------------ -------------------- ----------------------
Classified as follows:
Current portion 781,432 368,611 922,823
------------------------------ ------------------------ -------------------- ----------------------
There is no material difference between the net book value and
the fair values of trade and other receivables due to their
short-term nature.
Trade receivables consists of a EUR0.85m loan to the Benelux
franchisee made in August 2014 which has been subsequently
repaid.
6. Cash and cash equivalents
For the purpose of the cash flow statement, cash and cash
equivalents comprise the following balances:
Unaudited Audited Audited
6 months ended 6 months ended year ended
31/03/2015 31/03/2014 30/09/2014
GBP GBP GBP
-------------------- ------------------- ------------------------ --------------------
Cash at bank and in
transit 20,597,343 2,362,315 24,263,974
Restricted cash 2,413,692 - -
-------------------- ------------------- ------------------------ --------------------
23,011,035 2,362,315 24,263,974
Restricted cash relates to the escrow referred to in note 4. At
the period end the Group could have exchanged the amount held in
escrow for a bank guarantee. In the event of hotel planning
permission not being granted on the Brussels property, the funds
held in escrow will be immediately returned to easyHotel. If
planning permission is granted and the development is not pursued
by a franchisee, easyHotel will assume ownership and control of
this hotel development.
7. Trade and other payables
Unaudited Audited Audited
6 months 6 months ended year ended
ended 31/03/2014 30/09/2014
31/03/2015 GBP GBP
GBP
--------------------------------------- ----------------------- ------------------- ------------------
Trade payables 340,180 329,755 246,225
Amounts owed to related parties - 4,793,311 -
Other payables 29,339 13,506 19,027
Amounts payable to franchisees
in future 444,882 497,309 525,422
Accruals 406,522 518,524 434,362
Total financial liabilities classified
as financial liabilities measured
as amortised cost 1,220,923 6,152,405 1,225,036
Other taxation and social security 508,332 10,580 509,276
VAT payable 43,610 - -
Bookings in advance 1,805,982 1,819,616 1,651,797
Deferred Income 181,284 482,261 466,369
---------------------------------------- ----------------------- ------------------- ------------------
Total trade and other payables 3,760,131 8,465,462 3,852,478
---------------------------------------- ----------------------- ------------------- ------------------
Classified as follows:
Non-current portion 167,200 448,409 435,196
Current portion 3,592,931 8,017,053 3,417,282
---------------------------------------- ----------------------- ------------------- ------------------
3,760,131 8,465,462 3,852,478
--------------------------------------- ----------------------- ------------------- ------------------
There is no material difference between the net book value and
the fair values of current trade and other payables due to their
short-term nature.
Maturity analysis of the financial liabilities, classified as
financial liabilities measured at amortised cost, is as follows
(the amounts shown are undiscounted and represent the contractual
cash flows):
Unaudited Audited Audited
6 months ended 6 months ended year ended
31/03/2015 31/03/2014 30/09/2014
GBP GBP GBP
------------------- ------------------- ------------------------ --------------------
Up to three months 1,220,923 6,152,405 1,225,036
-------------------- ------------------- ------------------------ --------------------
8. Segment Information
The Group has two main reportable segments:
-- Owned properties - This division is involved in hotel
operations carried out in the Group's owned hotels and
properties
-- Franchising - This division involves the Group's franchise
hotel operations, in connection with the license of the Group's
brand name
Owned properties
GBP Franchising Total
GBP GBP
31 March 2015
Revenue
Total revenue from external
customers 1,705,397 883,930 2,589,327
Profit before taxation 753,675 591,382 1,345,057
Segment assets 40,898,560 2,109,476 43,008,036
Segment liabilities (8,600,806) (2,109,476) (10,710,282)
----------------------------- ------------------------- --------------------------- -------------------------
Other
Additions to non-current
assets 861,241 - 861,241
Finance income/(expense) (61,439) (180,815) (242,254)
Depreciation (179,166) - (179,166)
----------------------------- ------------------------- --------------------------- -------------------------
31 March 2014
Revenue
Total revenue from external
customers 686,502 583,701 1,270,203
Profit before taxation 232,027 373,262 605,289
Segment assets 17,130,740 2,381,985 19,512,725
Segment liabilities (13,283,477) (2,381,985) (15,665,462)
Other
Additions to non-current
assets 5,121,040 - 5,121,040
Finance income/(expense) (36,165) - (36,165)
Depreciation (102,498) - (102,498)
----------------------------- ------------------------- --------------------------- -------------------------
30 September 2014
Revenue
Total revenue from external
customers 2,295,862 1,249,086 3,543,948
Profit before taxation 957,938 1,016,795 1,974,734
Segment assets 40,401,459 2,372,488 42,773,947
Segment liabilities (8,378,933) (2,372,488) (10,751,421)
----------------------------- ------------------------- --------------------------- -------------------------
Other
Additions to non-current
assets 7,436,176 - 7,436,176
Finance income 16,640 - 16,640
Depreciation (410,771) - (410,771)
----------------------------- ------------------------- --------------------------- -------------------------
8. Segment Information (continued)
Reconciliation of reportable segment revenues, profit or loss,
assets and liabilities to the Group's corresponding amounts is
shown below:
Unaudited Audited Audited
6 months ended 6 months ended year ended
31/03/2015 31/03/2014 30/09/2014
GBP GBP GBP
Profit before income tax
Total profit of reportable segments 1,345,057 605,289 1,974,734
Corporate office expenses and interest (979,705) (262,768) (846,660)
Restructuring and listing costs - - (555,499)
Profit before tax per statement
of comprehensive income 365,352 342,521 572,575
-------------------------------------- ------------------------ ---------------------------- --------------------
Assets
Total assets for reportable segments 43,008,036 19,512,725 42,773,947
Cash in Employee Benefit Trust 234,113 - 1,192,291
Corporate office assets 28,132 - 16,297
-------------------------------------- ------------------------ ---------------------------- --------------------
Total assets per statement of
financial
position 43,270,281 19,512,725 43,982,535
-------------------------------------- ------------------------ ---------------------------- --------------------
Liabilities
Total liabilities for reportable
segments (10,710,282) (15,665,462) (10,751,421)
Corporation tax (167,387) (85,038) (51,674)
Corporate office liabilities (252,180) - (301,057)
Deferred tax liability (94,257) (81.089) (113,755)
-------------------------------------- ------------------------ ---------------------------- --------------------
Total liabilities per statement
of financial position (11,224,106) (15,831,589) (11,217,907)
-------------------------------------- ------------------------ ---------------------------- --------------------
9. Earnings per share
Basic and diluted earnings per ordinary share are calculated
using the weighted average number of ordinary shares in issue
during the financial period of 61,375,000 (31 March 2014:
24,999,999; 30 September 2014: 34,262,499). The Group has no
dilutive options, issued or outstanding, in relation to its share
capital. Earnings consist of profit for the period attributable to
the shareholders amounting to GBP243,765 (31 March 2014:
GBP267,167; 30 September 2014: GBP407,919).
10. Events after the reporting date
On 16 April 2015, the Group acquired a freehold building at 47
Castle Street, Liverpool. Subject to obtaining planning consent,
the Group plans to convert the four upper floors of the building
into a 68-bedroom easyHotel, expected to open in Spring 2016. The
ground floor of the property will remain a restaurant operated by a
third party. In total, the purchase of the building and conversion
project is expected to cost around GBP3m.
INDEPENDENT REVIEW REPORT TO EASYHOTEL PLC
Introduction
We have been engaged by the company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 31 March 2015 which comprises the Group Statement
of Comprehensive Income, the Group Statement of Changes in Equity,
the Statement of Financial Position, Group Statement of Cash Flows,
and the related notes.
We have read the other information contained in the half-yearly
financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the condensed set of financial statements.
Directors' responsibilities
The interim report, including the financial information
contained therein, is the responsibility of and has been approved
by the directors. The directors are responsible for preparing the
interim report in accordance with the rules of the London Stock
Exchange for companies trading securities on AIM which require that
the half-yearly report be presented and prepared in a form
consistent with that which will be adopted in the company's annual
accounts having regard to the accounting standards applicable to
such annual accounts.
Our responsibility
Our responsibility is to express to the company a conclusion on
the condensed set of financial statements in the half-yearly
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 securities
on 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 authorised to do so by our prior
written consent. Save as above, we do not accept responsibility for
this report to any other 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 half-yearly financial report for the six months ended 31
March 2015 is not prepared, in all material respects, in accordance
with the rules of the London Stock Exchange for companies trading
securities on AIM.
BDO LLP
Chartered Accountants and Registered Auditors
55 Baker Street
London W1U 7EU
United Kingdom
Date
BDO LLP is a limited liability partnership registered in England
and Wales (with registered number OC305127).
This information is provided by RNS
The company news service from the London Stock Exchange
END
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