| Thu 15 Feb 2001, 0:00 | | City Lodge Hotels Ltd - Interim Report |
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CITY LODGE HOTELS LIMITED
Registration number 1986/002864/06
COURTYARD SUITE HOTELS
City Lodge
Town Lodge
Road Lodge
Interim report for the six months ended 31 December 2000
Income statement
(Unaudited) (Unaudited) (Audited)
Six months Six months Year
ended ended ended
31 December % 31 December 30 June
R000's 2000 change 1999 2000
Turnover 91 483 12 81 393 166 206
Operating profit 41 270 9 37 890 78 918
Depreciation and
amortisation (9 276) (8 120) (16 909)
Interest income 2 303 3 321 6 229
Interest expense (8 187) (8 504) (17 575)
Profit before
taxation 26 110 6 24 587 50 663
Taxation (8 451) (8 128) (17 366)
Profit after
taxation 17 659 7 16 459 33 297
Income/(loss)
from joint
venture 204 (297) (276)
Attributable
earnings 17 863 11 16 162 33 021
Number of shares
in issue (000's) 28 274 28 274 28 274
Weighted average
number of
shares in issue
(000's) 28 274 28 274 28 274
Number of
convertible
debentures
in issue (000's) 13 636 13 636 13 636
Earnings per
share (cents)
- undiluted 63,2 11 57,2 116,8
- fully diluted 49,0 9 45,1 91,6
Dividend per
ordinary share
(cents) 22,5 10 20,5 56,0
Net interest
cover (times) 5,4 5,7 5,5
Effective tax
rate (%) 32,4 33,1 34,3
Statement of changes in ordinary shareholders' funds
Share capital Distributable
R000's and premium reserves Total
Balance at 30 June 2000 56 613 109 779 166 392
Attributable earnings for
the period - 17 863 17 863
Dividend declared - (6 362) (6 362)
Balance at 31 December 2000 56 613 121 280 177 893
Balance sheet
(Unaudited) (Unaudited) (Audited)
31 December 31 December 30 June
R000's 2000 1999 2000
Assets
Non-current assets 359 014 304 473 310 186
Operating assets 319 697 265 156 270 869
Investments and loans 39 317 39 317 39 317
Current assets 19 432 32 000 41 538
Trade receivables 11 638 10 399 11 700
Cash - 14 531 24 418
Other 7 794 7 070 5 420
Total assets 378 446 336 473 351 724
EQUITY AND LIABILITIES
Total shareholders' funds 252 893 234 581 241 392
Ordinary shareholders' funds 177 893 159 581 166 392
Convertible debenture holders'
funds 75 000 75 000 75 000
Non-current liabilities 80 887 76 135 77 916
Deferred taxation 22 387 17 635 19 416
Long-term loans 58 500 58 500 58 500
Current liabilities 44 666 25 757 32 416
Accounts payable and accruals 29 687 25 757 32 416
Bank overdraft 14 979 - -
Total equity and liabilities 378 446 336 473 351 724
Interest bearing debt to total
shareholders' funds (%) 29 25 24
Net asset value per share
(cents) 603 560 576
Summarised cash flow
(Unaudited) (Unaudited) (Audited)
31 December 31 December 30 June
R000's 2000 1999 2000
Cash generated by operations 41 606 36 901 78 496
Net interest expense (5 884) (5 183) (11 346)
Dividends paid (10 037) (10 037) (15 833)
Taxation paid (6 978) (8 198) (13 687)
Net cash inflow from operating
activities 18 707 13 483 37 630
Cash utilised in investing
activities (58 104) (27 966) (42 226)
Net cash decrease (39 397) (14 483) (4 596)
Comments
Although no discernable pattern in relation to hotel industry occupancies has
become apparent in the period under review, the City Lodge group increased its
occupancy levels from 69% to 74% in the six months to 31 December 2000. This
significant increase was achieved by a combination of focused marketing
strategies and a value for money philosophy that has resulted in an increased
market share that will stand the group in good stead as the industry picks up
and the scope for room rate increases improves.
Bolstered by full contributions from the three new Road Lodges which opened in
late 1999, the number of rooms sold increased by 10%.
As a result, turnover for the six-month period rose by 12% to R91,5 million.
Operating profit increased by 9% reflecting the lower margins arising from the
proportionately higher growth in the lower yielding value for money products
such as Bid2Stay as well as increased reservation and international marketing
costs. Increased depreciation and net interest paid, resulted in profit before
tax improving by 6%.
With improved results from the Courtyard Suite Hotel brand, attributable
earnings and fully diluted earnings per share increased by 11% and 9%
respectively.
The balance sheet remains strong and cash generated by operations increased by
13% which was utilised to fund the capital expenditure requirements of R58,1
million for the period.
A dividend of 22,5 cents per share has been declared, an increase of 10%.
Outlook
A full six months' contribution to earnings from the group's three newest
hotels, Courtyard and Road Lodge Port Elizabeth and City Lodge GrandWest,
should positively impact earnings in the second half.
This factor together with the prospect of a marginally improving hotel industry
market and an anticipated firming of room rates across the industry, should
result in the full year's increase in earnings being at least in line with
those achieved in the first half.
Declaration of dividend
Notice is hereby given that ordinary dividend no. 24 of 22,5 cents per share
for the six months ended 31 December 2000 (1999 - 20,5 cents) has been declared
payable to members registered in the books of the company at the close of
business on Friday, 2 March 2001.
The dividend is payable on 23 March 2001 and cheques will be posted to members
at their registered addresses or electronically transferred to their bank
accounts on or about that date.
For and on behalf of the board
Hans R Enderle Clifford Ross
Executive chairman Managing director
15 February 2001
Registered office Transfer secretaries
38 Wierda Road West Mercantile Registrars Limited
Wierda Valley 11 Diagonal Street
Sandton 2196 Johannesburg 2001
Directors: H R Enderle (Chairman), C Ross (Managing), A J Balabanoff, G D
Bisset, D C Coutts-Trotter, W M Dickson (British), D A Hawton, F W J Kilbourn,
I N Matthews, A C Widegger.
