| Thu 13 Feb 2003, 15:52 | | City Lodge Hotels Limited - Interim report for the |
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CITY LODGE HOTELS LIMITED
Registration number 1986/002864/06
Share code : CLH
ISIN : ZAE 000001483
Interim report for the six months ended 31 December 2002
Income statement
(Unaudited) (Unaudited) (Audited)
Six months Six months Year
R 000`s ended ended ended
31 December % 31 December 30 June
2002 change 2001 2002
Turnover 145 149 29 112 629 231 878
EBITDA 71 671 38 51 858 113 519
Depreciation &
amortisation (11 623) (11 609) (21 659)
Operating profit 60 048 49 40 249 91 860
Pre-opening expenses (314) - (753)
Interest income 3 245 1 766 3 810
Interest expense (4 999) (6 686) (12 430)
Income/(loss) from
joint venture 1 491 (216) 949
Profit before taxation 59 471 69 35 113 83 436
Taxation (20 928) (12 176) (27 988)
Headline earnings 38 543 68 22 937 55 448
Number of shares
in issue (000`s) 41 949 41 910 41 910
Weighted average number of
shares in issue (000`s) 41 926 39 613 40 752
Weighted average number
of convertible debentures
in issue (000`s) - 2 297 1 158
Headline earnings
per share (cents)
- fully diluted 91,3 64 55,8 132,8
- undiluted 91,9 59 57,9 136,1
Dividend per ordinary
share (cents) 37,0 42 26,0 78,0
Effective tax rate (%) 35,2% 34,7% 33,5%
Balance Sheet
(Unaudited) (Unaudited) (Audited)
R000`s 31 December 31 December 30 June
2002 2001 2002
ASSETS
Non current assets 419 414 375 134 395 582
Operating assets 376 463 332 441 352 760
Investments and loans 39 317 39 317 39 317
Deferred taxation 3 634 3 376 3 505
Current assets 29 850 19 972 38 001
Trade receivables 14 324 13 324 12 885
Cash 9 618 127 17 362
Other 5 908 6 521 7 754
Total assets 449 264 395 106 433 583
EQUITY AND LIABILITIES
Shareholders` funds 315 004 284 471 306 086
Ordinary share capital
and premium 131 691 131 425 131 425
Accumulated profit 183 313 153 046 174 661
Non current liabilities 100 658 88 580 90 758
Deferred taxation 31 837 30 080 32 258
Borrowings 68 821 58 500 58 500
Current liabilities 33 602 22 055 36 739
Accounts payable and
accruals 24 978 19 411 27 994
Taxation 8 624 2 644 8 745
Total equity and
liabilities 449 264 395 106 433 583
Interest bearing debt to
total shareholders`
funds (%) 22% 21% 19%
Net asset value per
share (cents) 751 679 730
Note : The company has authorised capital commitments of R58,0 million of which
approximately R32,0 million will be spent by 30 June 2003
Summarised cash flow
(Unaudited) (Unaudited) (Audited)
R000`s 31 December 31 December 30 June
2002 2001 2002
Cash generated by
operations 70 238 48 647 118 342
Net interest paid (3 001) (4 920) (8 620)
Dividends paid (21 794) (11 310) (22 206)
Taxation paid (18 129) (8 586) (16 247)
Net cash inflow from
operating activities 27 314 23 831 71 269
Cash utilised in
investing activities (35 324) (13 817) (44 020)
- investment to maintain
operations (18 588) (6 391) (17 012)
- investment to expand
operations (16 736) (7 426) (27 008)
Cash effects of financing
activities 266 (188) (9 887)
Net cash (decrease)/
increase (7 744) 9 826 17 362
Statement of changes in equity
Share capital Accumulated
R000`s and premium Profit Total
Balance at 30 June 2002 131 425 174 661 306 086
Adoption of AC 133 - (8 097) (8 097)
Issue of new ordinary
shares 266 - 266
Net profit for the
period - 38 543 38 543
Dividend paid - (21 794) (21 794)
Balance at
31 December 2002 131 691 183 313 315 004
COMMENTS
The overall results for the six months to 31 December 2002 were outstanding,
with average occupancies increasing by 5 percentage points to 77%.
The World Summit on Sustainable Development had a material impact on the
profitability of our 18 Gauteng hotels over the August and September period. In
addition, we experienced strong demand from both local and foreign business and
leisure travellers.
The higher occupancy and contributions for the full period from Road Lodge
Kimberley and Town Lodge Polokwane as well as a three month contribution from
Road Lodge Cape Town International Airport resulted in an increase of 14% in
room nights sold.
Turnover increased 29% to R145,2 million and EBITDA increased by 38% to R71,7
million. Operating margins increased by 5,7 percentage points to 41,4%,
resulting in operating profit increasing by 49%. Net interest expense decreased
by 64% due to higher average cash balances and a credit to interest paid of
R1,25 million as a result of the adoption of the accounting standard AC133. The
Courtyard Joint Venture produced a profit of R1,49 million compared to a loss of
R216000 in the prior period.
Headline earnings increased by 68% to R38,5 million and fully diluted headline
earnings per share rose 64% to 91,3 cents. The interim dividend has been raised
to 37,0 cents per share from 26,0 cents for the previous corresponding period.
Cash generated by operations increased by 44% to R70,2 million, of which R35,3
million was utilised to fund capital expenditure.
The group`s flagship, City Lodge V & A Waterfront, was significantly enhanced by
the addition of 44 rooms and a major refurbishment, which was completed at the
end of January 2003 at a total cost of R26,0 million. Town Lodge Bellville and
Courtyard Sandton have also been upgraded to the group`s "Millennium" standard.
Road Lodge Cape Town International Airport opened in September 2002 and there
are now 3791 rooms and suites in the group`s 35 hotels around South Africa.
Construction has commenced on the R53 million, 168-room City Lodge Umhlanga
Ridge adjacent to Umhlanga`s Gateway shopping and entertainment centre. The
hotel is expected to open during the last quarter of the calendar year.
OUTLOOK
Whilst the earnings growth for the full year to 30 June is not expected to match
that of the first half, the group is confident that high earnings growth for the
full year will be achieved.
ACCOUNTING POLICIES
These condensed interim financial statements have been prepared in accordance
with South African Statements of Generally Accepted Accounting Practice. The
accounting policies used are consistent with those used in the annual financial
statements for the year ended 30 June 2002, except for the adoption of AC133 -
Financial Instruments. This had the effect of increasing long term borrowings by
R10,32 million and resulted in a notional credit to interest paid in the current
period of R1,25 million.
The company has adopted Circular 7/2002 - Headline earnings, issued by the South
African Institute of Chartered Accountants. The effect of this is that pre-
opening expenditure is no longer added back when determining the company`s
headline earnings. The prior year`s headline earnings have been adjusted
accordingly.
DECLARATION OF DIVIDEND
Notice is hereby given that ordinary dividend no. 28 of 37,0 cents per share for
the six months ended 31 December 2002 (2001 - 26,0 cents) has been declared.
Shareholders are advised that the last day to trade cum dividend will be Friday,
7 March 2003. The shares will trade ex dividend as from Monday, 10 March 2003
and the record date will be Friday, 14 March 2003 .The dividend is payable on
Monday 17 March 2003.
Share certificates may not be dematerialised or rematerialised between Monday,
10 March 2003 and Friday, 14 March 2003, both days inclusive.
For and on behalf of the board
Hans R Enderle
Executive Chairman
Clifford Ross
Managing Director
13 February 2003
Registered office
38 Wierda Road West
Wierda Valley
Sandton, 2196
Transfer secretaries
Computershare Investor Services Limited
Ground Floor
70 Marshall Street
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,
Dr KIM Shongwe , AC Widegger.
Company Secretary: AC Widegger
Date: 13/02/2003 03:30:21 PM Produced by the JSE SENS Department
