| Mon 13 Jul 2009, 10:27 | | QHL - Queensgate Hotels And Leisure Limited - Segmental revised profit forecast |
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QHL
QHL
QHL - Queensgate Hotels And Leisure Limited - Segmental revised profit forecast
QUEENSGATE HOTELS AND LEISURE LIMITED
(Formerly Cyberhost Limited)
(Incorporated in the Republic of South Africa)
(Registration number 1998/013649/06)
Share code: QHL ISIN code: ZAE000113718
(`Queensgate` or `the Company`)
SEGMENTAL REVISED PROFIT FORECAST
Following the announcement detailing the revised profit forecast published
on 20 February 2009 pursuant to the acquisition of Queensgate Business
Development (Proprietary) Limited ("QBD"), the directors set out the segmental
information supporting the revised profit forecast for the years ended 31 August
2009 and 31 August 2010 as detailed below. Shareholders are advised that the
preparation of the forecast information is the responsibility of the directors.
As previously announced on 20 February 2009, the revised profit forecast was
reviewed by the Reporting Accountants, Nolands Incorporated.
2009
Business Total
Development Hospitality
Revenue 40 500 89 327 129 827
Cost of 14 870 15 491 30 361
Sales
Gross Profit 25 630 73 836 99 466
Other (1 833) (57 156) (58 989)
operating
expenses
Profit from 23 797 16 680 40 477
operations
JV income - 4 827 4 827
Finance (4 430) (5 970) (10 400)
charges
Profit 19 367 15 537 34 903
before
taxation
Taxation (5 423) (4 350) (9 773)
Profit after 13 944 11 186 25 130
taxation
Minority - -
shareholders
Attrib to 13 944 11 186 25 130
ordinary
shareholders
Shares in issue 1 543 121
106
Earnings per share (c) 1.63
Headline earnings per share (c) 1.63
2010
Business Total
Development Hospitality
Revenue 43 000 163 898 206 898
Cost of - 32 897 32 897
Sales
Gross Profit 43 000 131 001 174 001
Other (2 348) (85 190) (87
operating 538)
expenses
Profit from 40 652 45 811 86 463
operations
JV income - 10 590 10 590
Finance (4 356) (6 044) (10
charges 400)
Profit 36 296 50 357 86 653
before
taxation
Taxation (10 163) (14 100) (24
263)
Profit after 26 133 36 257 62 390
taxation
Minority - -
shareholders
Attrib to 26 133 36 257 62 390
ordinary
shareholders
Shares in issue 1 606
819 736
Earnings per share (c) 3.88
Headline earnings per share (c) 3.88
The business development column represents the business conducted by QBD. The
hospitality column represents the existing operations of Queensgate, namely the
hotel, food and beverage, wellness and conferencing operations. The revised
forecast for the hospitality business is lower than the original profit forecast
contained in the circular to shareholders dated 26 August 2008, principally due
to the following reasons:
2009
The drop in occupancies, primarily related to overseas tourists, following the
world economic crisis in late 2008;
The late start of the Sante hotel operations.
Two new hotels being adjusted and included in the revised forecast, namely The
Alphen Hotel and The Rockwell respectively, which hotels are currently loss
making. The Rockwell only opened in December 2008 and The Alphen hotel business
was acquired and opened by Queensgate in February 2008. The normal timeframe
for a Queensgate hotel to move into profitability is approximately 12 months.
The accounting for the R7.2 million dividend on the preference share as interest
as opposed to a preference dividend in the original forecast.
Overall, the hospitality operations are expected to be approximately 35% down on
the original forecast, excluding the preference dividend adjustment.
2010
Overall, the hospitality operations are expected to be approximately 31% down on
the original forecast, excluding the preference dividend reallocation below.
Two new hotels being included in the revised forecast, namely The Alphen Hotel
and The Rockwell, which hotels are expected to move to profitability in the next
financial year.
The accounting for the R7.2 million dividend on the preference share as interest
as opposed to a preference dividend in the original forecast.
Shareholders are advised that a conservative approach was adopted in regard to
the revised forecasts for 31 August 2010 as well as 31 August 2009 due to the
world economic crisis, but that hotel bookings around the 2010 Soccer World Cup
are looking strong.
The hospitality operations continue to remain under pressure and the timing of
one of the group`s developments may move from 31 August 2009 into the following
year. The group will continue to monitor results and will issue a trading
update where appropriate.
Material assumptions:
Rooms revenue from the hotel businesses has been forecasted for the year
ended 31 August 2009, on the existing hotel portfolio only, while four new
hotels, which are already in the pipeline, have been included in the
forecast for the year ended 31 August 2010. Accordingly, although the
revenue forecast is based on management`s best expectations for the
completion of these new hotels, it necessarily contains uncertainty as to
the timing of the commencement of operations of these new hotels.
* Revenue from food and beverage is assumed to be in line with existing
ratios being experienced in the group`s existing hotel operations.
* Costs have been assumed in line with those percentages currently being
experienced within the existing hotel, food and beverage, and wellness
businesses.
* Fees earned from business development projects have been forecast on the
expected progress made in these projects as estimated by management and
accordingly, the forecast does not provide for any unexpected delays in the
commencement, duration and completion of these projects.
* No amortisation of intangible assets has been provided as the intangible
assets are assumed to have an indeterminate useful life.
* Taxation and deferred taxation are provided at the nominal rate of 28%.
By order of the board
Johannesburg
13 July 2009
Designated Advisor
Arcay Moela Sponsors (Proprietary) Limited
Date: 13/07/2009 10:27:12 Produced by the JSE SENS Department.
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