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City Lodge Hotels Limited -
City Lodge Hotels Limited
Registration number 1986/002864/06
Share code : CLH
ISIN : ZAE000001483
Reviewed group preliminary results for the year ended 30 June 2003
Average occupancies 76%
EBITDA R153 million
EPS up 56%
Dividends up 56%
Income statement
R 000"s Year Year
ended ended
30 June 30 June
2003 % change 2002
Revenue 292,910 26 231,878
EBITDA 152,825 35 113,519
Depreciation & amortisation (22,351) (21,659)
Operating profit 130,474 42 91,860
Pre-opening expenses (314) (753)
Interest income 7,827 3,810
Interest expense (9,775) (12,430)
Income from joint venture 3,501 949
Profit before taxation 131,713 58 83,436
Taxation (44,261) (27,988)
Net profit 87,452 58 55,448
Number of shares in
issue (000"s) 41,962 41,910
Weighted average number of
shares in issue (000"s) 41,939 40,752
Weighted average number of
convertible debentures in
issue (000"s) - 1,158
Basic and headline earnings
per share (cents)
- fully diluted 207.0 56 132.8
- undiluted 208.5 53 136.1
Dividends per ordinary
share (cents) 122.0 56 78.0
Effective tax rate (%) 33.6% 33.5%
NOTE : Net profit equates to headline earnings and therefore no reconciliation
is required.
Balance sheet
R 000"s Year Year
ended ended
30 June 30 June
2003 2002
ASSETS
Non current assets 426,953 395,582
Operating assets 386,665 352,760
Investments and loan 36,524 39,317
Deferred taxation 3,764 3,505
Current assets 56,565 38,001
Trade receivables 15,100 12,885
Cash 33,557 17,362
Other 7,908 7,754
Total assets 483,518 433,583
EQUITY AND LIABILITIES
Shareholders" funds 345,026 306,086
Ordinary share capital
and premium 131,836 131,425
Retained earnings 213,190 174,661
Non current liabilities 101,000 90,758
Deferred taxation 34,063 32,258
Borrowings 66,937 58,500
Current liabilities 37,492 36,739
Accounts payable and accruals 24,042 27,994
Taxation 13,450 8,745
Total equity and liabilities 483,518 433,583
Interest bearing debt to total
shareholders" funds (%) 19% 19%
Net asset value per
share (cents) 822 730
Note : The company has authorised capital commitments of R75.0 million of which
R37.0 million has been contracted for and approximately R73.0 million will be
spent by 30 June 2004.
Summarised Cash Flow Statement
R 000"s Year Year
ended ended
30 June 30 June
2003 2002
Cash generated by operations 149,529 118,342
Net interest paid (5,798) (8,620)
Dividends paid (37,314) (22,206)
Taxation paid (34,539) (16,247)
Net cash inflow from
operating activities 71,878 71,269
Cash utilised in investing
Activities (56,094) (44,020)
-investment to maintain
operations (24,099) (17,012)
-investment to expand
operations (31,995) (27,008)
Cash effects of financing
Activities 411 (9,887)
Net increase in cash 16,195 17,362
Statement of changes in equity
Share capital Retained
R000"s and premium earnings Total
Balance at 30 June 2002 131,425 174,661 306,086
Adoption of AC 133 - (11,609) (11,609)
Issue of new ordinary
Shares 411 - 411
Net profit for the
period - 87,452 87,452
Dividends paid - (37,314) (37,314)
Balance at 30 June 2003 131,836 213,190 345,026
COMMENTS
Outstanding results were achieved in the 12 months to 30 June 2003. Average
occupancies at 76%, were four percentage points higher than the previous year.
These occupancies were driven by strong demand from business and domestic
leisure travellers, by improved inbound tourism and were boosted by one-off
events such as the World Summit on Sustainable Development and the Cricket World
Cup.
This increased demand together with full period contributions from Town Lodge
Polokwane and Road Lodge Kimberley, as well as nine months from Road Lodge Cape
Town International Airport resulted in an increase of 12% in rooms nights sold.
A five-month contribution from 44 new rooms at City Lodge V&A Waterfront also
contributed to this increase.
On 18 June, the group sold its millionth room night for the first time in a
single financial year. Since its inception in 1985, the group has sold more than
nine million room nights.
Turnover for the year increased 26% to R293 million and EBITDA rose 35% to R153
million. Operating profit margins improved by 4.9 percentage points to 44.5%
resulting in a 42% increase in operating profit.
The net interest expense decreased by 77% to R1.9 million due to higher average
cash balances and a notional credit of R3.9 million as a result of the adoption
of Accounting Standard AC 133.
The Courtyard Joint Venture performed strongly and generated profits of R3.5
million compared to R950,000 in the prior period.
Net profit was up 58% to R87.5 million and fully diluted headline earnings per
share increased by 56% to 207 cents. A final dividend of 85 cents per share has
been declared. Total dividends for the year amounted to 122 cents per share
(2002-78 cents), an increase of 56%.
Cash generated by operations rose by 26% to R150 million of which R56 million
was used to fund capital expenditure. An amount of R32 million was spent on new
hotels and R24 million on the upgrading and replacement of operating assets.
Construction of the 168-room City Lodge Umhlanga Ridge is under way and the
hotel is scheduled to open in time for the December holiday season. Earthworks
will soon begin in Rustenburg for the development of a 90-room Road Lodge, which
is expected to be completed in the second quarter of 2004.
OUTLOOK
The current year will benefit from full year contributions from Road Lodge Cape
Town International Airport and City Lodge V&A Waterfront"s additional rooms.
There will also be a partial contribution from City Lodge Umhlanga Ridge and
Road Lodge Rustenburg.
The projected growth in the economy and the country"s status as an increasingly
popular international tourist destination will be positive for the hospitality
industry and the group"s earnings prospects.
ACCOUNTING POLICIES
These preliminary 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 reducing opening retained earnings
by R11.6 million and resulted in a notional credit to net interest paid in the
current year of R3.9 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 results have been restated accordingly.
AUDIT REVIEW
These preliminary financial statements have been reviewed by the company"s
auditors, KPMG Inc. Their unqualified review opinion is available for inspection
at the company"s registered office.
DECLARATION OF DIVIDEND
Notice is hereby given that ordinary dividend no.29 of 85.0 cents per share for
the year ended 30 June 2003 (2002 - 52.0 cents) has been declared.
Shareholders are advised that the
last day to trade cum dividend will be Friday, 12 September 2003
The shares will trade ex dividend as from Monday, 15 September 2003
and the record date will be Friday, 19 September 2003
The dividend is payable on Monday 22 September 2003.
Share certificates may not be dematerialised or rematerialised between Monday,
15 September 2003 and Friday, 19 September 2003, both days inclusive.
For and on behalf of the board
Hans R Enderle
Chairman
Clifford Ross
Chief executive
14 August 2003
Registered office
38 Wierda Road West
Wierda Valley
Sandton, 2196
Transfer secretaries
Computershare Limited, Investor Services Division
70 Marshall Street
Johannesburg, 2001
Directors: HR Enderle (Chairman), C Ross (Chief executive), DC Coutts-Trotter,DA
Hawton, FWJ Kilbourn, IN Matthews, Dr KIM Shongwe , AC Widegger.
Company Secretary: AC Widegger
Date: 14/08/2003 12:18:16 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
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