| Thu 14 Feb 2008, 14:48 | | CLH - City Lodge Hotels Limited - Unaudited interim report for the six months |
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CLH
CLH
CLH - City Lodge Hotels Limited - Unaudited interim report for the six months
ended 31 December 2007
City Lodge Hotels Limited
Registration number 1986/002864/06
Share code: CLH
ISIN: ZAE000001483
UNAUDITED INTERIM REPORT for the six months ended 31 December 2007
Average occupancies 83,5%
Fully diluted headline EPS +22%
Dividend per share +22%
ROE 37%
COMMENTARY
RESULTS
Strong demand across all four brands for both midweek and weekend accommodation
enabled the group to achieve an occupancy rate of 83,5% in the six months to 31
December 2007. This compares to 83% in the corresponding interim period and 82%
in the previous financial year.
The number of rooms sold during the period increased due to the higher
occupancies and additional capacity. Two new hotels, Road Lodge East London (90
rooms) and Town Lodge Roodepoort (106 rooms), made full period contributions for
the first time, as did the 30-room extension to Road Lodge Germiston. There was
a two-month contribution from the 27 rooms added to Courtyard Port Elizabeth.
Revenue for the period rose by 18% to R296,0 million whilst the higher
occupancies and an increase in the achieved room rate contributed to an
improvement in the operating profit margin by 1,6 percentage points to 51,4%.
This led to operating profit growth of 21%.
As a result of higher average cash balances and interest rates, interest
received increased to R7,6 million from R6,0 million. Interest paid decreased to
R1,0 million from R2,9 million due primarily to the repayment of certain long-
term borrowings in February 2007.
Higher occupancies and achieved room rates also resulted in an increase in the
contribution derived from the Courtyard joint venture which rose by 21% to R4,2
million.
The group`s effective tax rate remained in line with that of the previous year.
Profit for the period increased by 23% to R107,2 million resulting in a 22% rise
in fully diluted headline earnings per share to 248,8 cents. An interim dividend
of 177 cents has been declared compared to 145 cents in the corresponding
period.
OUTLOOK
The second half of the financial year will benefit from the opening of the 118-
room Road Lodge Centurion and the 90-room Road Lodge Richards Bay, both of which
will become fully operational during March.
Extensions at City Lodge GrandWest (56 rooms), City Lodge Airport (59 rooms) and
Road Lodge Nelspruit (27 rooms) are under way and are expected to boost capacity
in the last quarter of the financial year.
Construction of the 90-room Road Lodge Potchefstroom is expected to commence
before the end of June, as is the case with the 204-room Town Lodge Port
Elizabeth.
In addition, the group has entered into a land and building lease agreement for
a 120-room Road Lodge within the Gateway shopping precinct in Umhlanga. It is
not yet clear when this development will commence as regulatory approvals are
currently being sought. It is however anticipated that construction will begin
by the end of the financial year.
The group has also secured a site that will enable the development of a Road
Lodge (118 rooms) at Southgate, south of Johannesburg and in close proximity to
Soweto, NASREC and Soccer City. Regulatory submissions have been made and zoning
and building plan approval applications are under way. On completion of all the
above, the total number of rooms in the group will increase by 20% to 5 305.
As announced on SENS on 21 December 2007, significant progress has been made
towards the finalisation of a meaningful BEE ownership transaction and an
announcement in this regard will be made shortly.
Despite prevailing political and economic uncertainties, the fundamentals are in
place for the group to achieve acceptable levels of growth for the full year.
DECLARATION OF DIVIDEND
Notice is hereby given that ordinary dividend number 38 of 177,0 cents per share
for the six months ended 31 December 2007 (2006: 145,0 cents) has been declared.
Shareholders are advised that the last day to trade cum dividend will be
Thursday, 13 March 2008. The shares will trade ex dividend as from Friday, 14
March 2008 and the record date will be Thursday, 20 March 2008. The dividend is
payable on Tuesday, 25 March 2008.Share certificates may not be dematerialised
or rematerialised between Monday, 17 March 2008 and Thursday, 20 March 2008,
both days inclusive.
BASIS OF PREPARATION
These condensed, unaudited interim financial statements have been prepared in
accordance with the recognition and measurement requirements of International
Financial Reporting Standards ("IFRS") and the presentation and disclosure
requirements of IAS 34 Interim Financial Reporting.
The accounting policies used are consistent with those used in the annual
financial statements for the year ended 30 June 2007.
For and on behalf of the board
Hans R Enderle Clifford Ross
Chairman Chief Executive 14 February 2008
Registered office: "The Lodge" Bryanston Gate Office Park, Cnr. Homestead Avenue
and Main Road, Bryanston
Transfer secretaries: Computershare Investor Services 2004 (Pty) Limited, 70
Marshall Street, Johannesburg, 2001
Directors: HR Enderle (Chairman), C Ross (Chief Executive)*, FWJ Kilbourn, IN
Matthews, N Medupe, SG Morris, Dr KIM Shongwe, AC Widegger*
*Executive
Company secretary: MC van Heerden
INCOME STATEMENT
Six months Six months Year
ended ended ended
31 December % 31 December 30 June
R000`s 2007 change 2006 2007
Revenue 296 029 18 251 448 509 711
Administration and (22 203) (20 782) (42 714)
marketing costs
Operating costs (108 102) (92 132) (185 938)
165 724 20 138 534 281 059
Depreciation (13 702) (13 314) (26 672)
Operating profit 152 022 21 125 220 254 387
Interest income 7 623 5 993 11 953
Interest expense (1 040) (2 860) (3 772)
Share of profit from 4 178 3 458 7 611
joint venture
Profit before taxation 162 783 23 131 811 270 179
Taxation (55 585) (44 387) (92 260)
Profit for the period 107 198 23 87 424 177 919
Headline earnings
reconciliation
Net profit 107 198 87 424 177 919
Loss on sale of - - (270)
equipment
Taxation effect - - 78
Headline earnings 107 198 87 424 177 727
Number of shares in 42 523 42 419 42 482
issue (000`s)
Weighted average number
of
shares in issue (000`s) 42 499 42 389 42 416
Fully diluted weighted
average number
of shares in issue 43 091 42 967 43 030
(000`s)
Basic earnings per
share (cents)
- fully diluted 248,8 22 203,5 413,5
- undiluted 252,2 22 206,2 419,5
Headline earnings per
share (cents)
- fully diluted 248,8 22 203,5 413,0
- undiluted 252,2 22 206,2 419,0
Dividend declared per 177,0 22 145,0 293,0
share (cents)
Dividend cover (times) 1,4 1,4 1,4
Effective tax rate (%) 34,1 33,7 34,1
BALANCE SHEET
31 December 31 December 30 June
R000`s 2007 2006 2007
ASSETS
Non-current assets 622 525 526 370 564 545
Property, plant and 575 091 480 092 517 717
equipment
Investments and loans 44 417 43 339 43 850
Deferred taxation 3 017 2 939 2 978
Current assets 92 888 122 317 109 571
Inventory 1 582 1 410 1 493
Trade receivables 26 621 22 403 23 855
Other receivables 6 812 8 042 4 831
Cash and cash equivalents 57 873 90 462 79 392
Total assets 715 413 648 687 674 116
EQUITY
Capital and reserves 580 978 502 706 534 440
Share capital and premium 138 875 137 025 138 008
Accumulated profit 437 224 363 959 392 910
Other reserves 4 879 1 722 3 522
LIABILITIES
Non-current liabilities 102 154 109 406 97 945
Interest-bearing borrowings 40 000 55 446 40 000
Other non-current 6 326 5 478 5 859
liabilities
Deferred taxation 55 828 48 482 52 086
Current liabilities 32 281 36 575 41 731
Trade and other payables 28 764 25 450 30 746
Taxation 3 517 11 125 10 985
Total equity and liabilities 715 413 648 687 674 116
Interest-bearing debt to
total shareholders`
funds (%) 7 11 7
Net asset value per share 1 366 1 185 1 258
(cents)
Note: The company has authorised capital commitments of R239 million of which
approximately R67 million has been contracted. It is anticipated that
approximately R98 million will be spent by 30 June 2008.
SUMMARISED CASH FLOW
Year ended Year ended Year ended
31 December 31 December 30 June
R000`s 2007 2006 2007
Cash generated by operations 164 908 142 831 298 059
Net interest received 6 583 3 133 8 181
Dividends paid (62 884) (51 277) (112 821)
Taxation paid (59 350) (40 901) (85 016)
Cash inflow from operating 49 257 53 786 108 403
activities
Cash utilised in investing (71 643) (37 782) (89 006)
activities
- investment to maintain (7 614) (8 293) (27 382)
operations
- investment to expand (63 462) (29 027) (60 651)
operations
- investments and loans (567) (462) (973)
Cash flows from financing 867 616 (13 847)
activities
Net cash (decrease)/increase (21 519) 16 620 5 550
STATEMENT OF RECOGNISED GAINS AND LOSSES
Six months Six months Year
ended ended ended
31 December 31 December 30 June
R000`s 2007 2006 2007
Actuarial loss on defined (615) (1 405) (817)
benefit plan recognised
directly in equity
Profit for the period 107 198 87 424 177 919
Total recognised gains and 106 583 86 019 177 102
losses for the period
RECONCILIATION OF MOVEMENT IN CAPITAL AND RESERVES
R000`s Share Other Total
capital reserves Accumulated
and profit
premium
Balance at 30 June 2006 136 409 2 298 327 812 466 519
Issue of new ordinary 616 616
shares
Net profit for the period 87 424 87 424
Recognised gains and (1 405) (1 405)
losses
Share compensation reserve 829 829
Dividends paid (51 277) (51 277)
Balance at 31 December 137 025 1 722 363 959 502 706
2006
Issue of new ordinary 983 983
shares
Net profit for the period 90 495 90 495
Recognised gains and 588 588
losses
Share compensation reserve 1 212 1 212
Dividends paid (61 544) (61 544)
Balance at 30 June 2007 138 008 3 522 392 910 534 440
Issue of new ordinary 867 867
shares
Net profit for the period 107 198 107 198
Recognised gains and (615) (615)
losses
Share compensation reserve 1 972 1 972
Dividends paid (62 884) (62 884)
Balance at 31 December 138 875 4 879 437 224 580 978
2007
www.citylodge.co.za
Date: 14/02/2008 14:48:35 Produced by the JSE SENS Department.
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