| Tue 14 Aug 2001, 0:00 | | City Lodge Hotels Limited - Audited Group Profit A |
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CITY LODGE HOTELS LIMITED
(Registration number 1986/002864/06)
Audited group profit and dividend announcement for the year ended 30 June
2001
Audited Group Profit and Dividend Announcement for the Year ended 30 June
2001
~ Earnings per share +14%
~ Occupancy up from 69% to 71%
~ Hotel capital expenditure - R78 million
Income statement
Year Year
R 000's ended ended
30 June % 30June
2001 chan 2000
ge
Revenue 193,324 16 166,206
Operating profit 90,892 15 78,918
Depreciation & (18,598) (16,270)
amortisation
Exceptional item (1,640) (558)
Interest income 3,668 6,229
Interest expense (18,644) (17,575)
Income/(loss) from 430 (394)
joint venture
Profit before 56,108 11 50,350
taxation
Taxation (18,943) (17,272)
Net profit 37,165 12 33,078
Number of shares 28,274 28,274
in issue (000's)
Weighted average
number of
shares in issue 28,274 28,274
(000's)
Number of
convertible
debentures
in issue (000's) 13,636 13,636
Earnings per share
(cents)
- before 135.5 14 118.4
exceptional item
- after 131.4 12 117.0
exceptional item
Fully diluted
earnings per share
(cents)
- before 103.7 12 92.7
exceptional item
- after 101.0 10 91.7
exceptional item
Dividends per 62.5 12 56.0
ordinary share
(cents)
Net interest cover 4.7 5.4
(times)
Effective tax rate 33.8% 34.3%
(%)
Determination of
earnings before
exceptional item
Net profit per 37,165 33,078
income statement
Exceptional item
- pre-opening 1,640 558
expenses
- taxation (492) (167)
relief arising
thereon
Earnings before 38,313 14 33,469
exceptional item
CITY LODGE HOTELS
LIMITED
Balance Sheet
R000's 30 June 30 June
2001 2000
ASSETS
Non current assets 369,550 309,588
Operating assets 330,233 270,271
Investments and 39,317 39,317
loans
Current assets 18,175 42,059
Trade receivables 12,433 11,700
Cash - 24,418
Other 5,742 5,941
Total assets 387,725 351,647
EQUITY AND
LIABILITIES
Total 273,032 252,266
shareholders'
funds
Ordinary 198,032 177,266
shareholders'
funds
Convertible 75,000 75,000
debenture holders'
funds
Non current 83,130 77,736
liabilities
Deferred taxation 24,630 19,236
Borrowings 58,500 58,500
Current 31,563 21,645
liabilities
Accounts payable 21,864 21,645
and accruals
Borrowings 9,699 -
Total equity and 387,725 351,647
liabilities
Interest bearing
debt to total
shareholders' 25% 23%
funds (%)
Net asset value 651 602
per share (cents)
Summarised cash
flow statement
30 June 30 June
R000's 2001 2000
Cash generated by 87,440 77,820
operations
Net interest (14,976) (11,346)
expense
Dividends paid (16,399) (15,833)
Taxation paid (11,901) (13,569)
Net cash inflow 44,164 37,072
from operating
activities
Cash utilised in (78,281) (41,668)
investing
activities
Net cash decrease (34,117) (4,596)
Statement of
changes in equity
Share Distribut
capital able
R000's and reserves Total
premium
Balance at 30 June 56,613 109,779 166,392
2000
Changes in - 10,874 10,874
accounting
policies
Restated balance 56,613 120,653 177,266
Attributable - 37,165 37,165
earnings for the
period
Dividends paid - (16,399) (16,399)
Balance at 30 June 56,613 141,419 198,032
2001
NOTE: The audited results have been prepared in accordance with Generally
Accepted Accounting Standards and on a basis consistent with the current
year's interim report and the prior year's audited results except for the
changes in accounting policies detailed below :
- the treatment of dividends has been changed with the adoption of AC 107
(revised) to the extent that dividends are now accounted for on the date of
declaration.
- pre-opening expenses are now charged directly against income as incurred
in accordance with AC 129, and separately identified as an exceptional item.
The 2000 group consolidated balance sheet and income statement have been
restated to take account of these changes.
COMMENTS
The City Lodge group improved its overall occupancy level for the year ended
30 June 2001 from 69% to 71%, although occupancies during the last quarter
ran counter to the positive trend of the preceding twelve months.
As anticipated at the interim stage, room rates across the industry firmed
in the second six months. This, together with the opening of three new
hotels and the higher occupancy, resulted in revenue for the full year
increasing by 16% to R193,3 million. Operating margins for the year at 47,0%
were 1,9 percentage points better than those reported at the interim. As a
consequence of the group's ongoing capital expenditure program, depreciation
and net interest paid were up by 14% and 32% respectively.
Earnings before exceptional item increased by 14% and fully diluted earnings
per share before exceptional item of 103,7 cents were 12% higher.
The balance sheet remains strong and the net cash inflow of R44,2 million
from operating activities increased by 19% which was utilised to fund the
major portion of the capital expenditure of R78,3 million for the period. Of
this total, R52,3 million was in respect of new hotels and the balance to
upgrade existing hotels.
A dividend of 40.0 cents per share has been declared, resulting in an
increase of 12% for the full year pay-out of 62.5 cents.
OUTLOOK
A full year's contribution from the group's three newest hotels (Courtyard
and Road Lodge Port Elizabeth and City Lodge GrandWest) should have a
positive impact on earnings in the year ahead.
Construction of Road Lodge Kimberley (90 rooms) and Town Lodge Pietersburg
(102 rooms) will commence shortly and are scheduled for opening in April
2002. Both hotels are adjacent to new Sun International casino developments
and will establish the group's presence for the first time in the Northern
Cape and the Northern Province.
Given the most recent trading trends, it does not appear likely that the
group will increase room occupancies in the year ahead.
Notwithstanding, it is anticipated that real earnings growth per share will
be achieved for the full year.
STRATE
City Lodge is due to commence dematerialisation on 5 November 2001 in terms
of the JSE Securities Exchange South Africa's revised Listing Requirements.
The dematerialisation period commences on 5 November 2001 with trading for
electronic settlement on 26 November 2001, for settlement on 3 December
2001. As no paper scrip will be accepted for settlement after
dematerialisation we urge shareholders wishing to dematerialise their shares
to set the process in motion as soon as possible.
A letter containing further detailed information relating to STRATE and the
dematerialisation process will be included with the annual report to be
posted to members towards the end of September 2001.
DECLARATION OF DIVIDEND
Notice is hereby given that ordinary dividend no. 25 of 40.0 cents per share
for the year ended 30 June 2001 (2000 - 35.5 cents) has been declared
payable to ordinary shareholders registered in the books of the company at
the close of business on Friday 31 August 2001.
Shareholders are advised that the last day to trade cum dividend will be
Friday 31 August 2001. The shares will trade ex dividend as from Monday 3
September 2001.The dividend is payable on Friday 21 September 2001.
CONVERSION OF DEBENTURES
As the total dividend declared on each ordinary share for the financial year
ended 30 June 2001 exceeds 60,5 cents, the 13 636 364 subordinated unsecured
compulsorily convertible debentures of R5,50 each (the "debentures") will be
redeemed (the "redemption") and the redemption proceeds applied in
subscription for fully paid ordinary shares in the capital of the company at
R5,50 per ordinary share (the "subscription") on Monday, 3 September 2001
(the "conversion date").
No interest shall accrue on the debentures for the period reckoned from 1
August 2001, to the conversion date. The ordinary shares issued pursuant to
the application of the redemption proceeds shall not qualify for dividends
declared in respect of the financial year ended 30 June 2001 but shall
qualify for all dividends declared thereafter.
The salient dates for the redemption and conversion are as follows:
2001
Record date to determine participation in the redemption
and subscription Friday, 31 August
Issue of ordinary shares pursuant to the subscription Monday, 3 September
Listing of ordinary shares pursuant to the subscription Monday, 3 September
A copy of this extract will be sent to debenture holders together with a
form of surrender giving details of the procedure for the surrender of
certificates in respect of debentures on or about 16 August 2001.
For and on behalf of the board
Hans R Enderle Clifford Ross
Executive Chairman Managing director
14 August 2001
Registered office Transfer secretaries
38 Wierda Road West Mercantile Registrars Limited
Wierda Valley 11 Diagonal Street
Sandton, 2196 Johannesburg, 2001
Directors: HR Enderle (Chairman), C Ross (Managing), AJ Balabanoff, GD
Bisset, DC Coutts-Trotter, WM Dickson (British), DA Hawton, FWJ Kilbourn, IN
Matthews, AC Widegger.
Company Secretary: AC Widegger
