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CITY LODGE HOTELS LIMITED - UNAUDITED INTERIM REPORT FOR THE SIX MONTHS ENDED 31
DECEMBER 2004
CITY LODGE HOTELS LIMITED
Registration number 1986/002864/06
Share code: CLH
ISIN: ZAE 000001483
Unaudited interim report for the six months ended 31 December 2004
Average occupancies 77%
Fully diluted headline EPS +22%
Dividend per share +119%
Income statement
(Unaudited) (Unaudited) (Audited)
Six months Six months Year
R000`s ended ended ended
31 December % 31 December 30 June
2004 change 2003 2004
Revenue 194 296 18 164 804 335 844
EBITDA 100 125 21 82 491 174 373
Depreciation and
amortisation (12 666) (11 591) (23 157)
Operating profit 87 459 23 70 900 151 216
Interest income 3 503 4 111 7 447
Interest expense (1 512) (3 952) (8 012)
Income from joint
venture 1 043 1 268 2 964
Profit before
taxation 90 493 25 72 327 153 615
Taxation (33 584) (26 064) (52 675)
Net profit 56 909 23 46 263 100 940
Number of shares
in issue (000`s) 42 194 42 037 42 125
Weighted average
number of shares
in issue (000`s) 42 166 41 983 42 033
Basic and headline
earnings per
share (cents)
- fully diluted 133,5 22 109,0 238,0
- undiluted 135,0 23 110,2 240,1
Dividend declared
per share (cents) 94,0 119 43,0 168,0
Effective tax
rate (%) 37,1 36,0 34,3
Note: Net profit equates to headline earnings and therefore no reconciliation is
required.
Balance sheet
(Unaudited) (Unaudited) (Audited)
R000`s 31 December 31 December 30 June
2004 2003 2004
ASSETS
Non current assets 473 918 452 957 481 240
Property, plant and equipment 431 937 412 137 439 857
Investments and loans 37 830 36 927 37 361
Deferred taxation 4 151 3 893 4 022
Current assets 55 146 34 166 48 986
Trade receivables 17 338 15 838 16 540
Cash 29 233 10 690 26 232
Other 8 575 7 638 6 214
Total assets 529 064 487 123 530 226
EQUITY AND LIABILITIES
Shareholders` funds 399 113 356 310 394 079
Share capital and premium 134 573 132 542 133 736
Accumulated profit 264 540 223 768 260 343
Non current liabilities 98 956 95 539 95 417
Deferred taxation 44 738 38 125 42 390
Borrowings 54 218 57 414 53 027
Current liabilities 30 995 35 274 40 730
Accounts payable and accruals 23 687 21 101 27 243
Borrowings - 7 045 8 089
Taxation 7 308 7 128 5 398
Total equity and liabilities 529 064 487 123 530 226
Interest bearing debt to total
shareholders` funds (%) 14 18 16
Net asset value per
share (cents) 946 848 935
Note: The company has authorised capital commitments of R114,0 million of which
approximately R15 million has been contracted. It is anticipated that
approximately R30 million will be spent by 30 June 2005.
Summarised cash flow
(Unaudited) (Unaudited) (Audited)
R000`s 31 December 31 December 30 June
2004 2003 2004
Cash generated by operations 94 453 80 032 180 299
Net interest received/(paid) 1 522 (244) (1 402)
Dividends paid (52 712) (35 685) (53 787)
Taxation paid (29 455) (28 453) (52 658)
Net cash inflow from operating
activities 13 808 15 650 72 452
Cash utilised in investing
activities (4 746) (36 745) (75 856)
- investment to maintain
operations (4 689) (3 749) (23 765)
- investment to expand
operations (57) (32 996) (52 091)
Cash effects of financing
activities (6 061) (1 772) (3 921)
Net cash increase/(decrease) 3 001 (22 867) (7 325)
Statement of changes in equity
Share capital Accumulated
R000`s and premium profit Total
Balance at 30 June 2004 133 736 260 343 394 079
Issue of new ordinary shares 837 - 837
Net profit for the period - 56 909 56 909
Dividend paid - (52 712) (52 712)
Balance at 31 December 2004 134 573 264 540 399 113
COMMENTS
The group achieved very satisfactory results for the six months ended 31
December 2004 with average occupancies being maintained at the 77% level
recorded in the corresponding period last year.
The number of rooms sold increased, aided by the inclusion of City Lodge
Umhlanga Ridge and Road Lodge Rustenburg. This contributed to revenue increasing
by 18% to R194,3 million, whilst operating profit increased by 23% as a result
of a 2 percentage point improvement in the operating profit margin to 45%.
Net interest income increased to R2 million from R160 000. This was primarily
due to a once off credit to interest paid of R2,3 million which arose on the
repayment and refinancing of certain of the company`s long term borrowings
during the period.
Continued pressure on occupancies in Courtyard`s market resulted in a lower
contribution to the group`s earnings during the period.
Profit before tax was up by 25%. The effective tax rate increased as a result of
the STC on the higher dividend. Net profit was up by 23%, with fully diluted
headline earnings per share 22% higher at 133,5 cents.
The interim dividend has been increased by 119% to 94 cents per share in line
with the group`s new dividend policy of paying out 70% of earnings per reporting
period.
Cash generated by operations grew by 18% to R94,5 million.
OUTLOOK
Construction should begin soon on three new hotels, at a cost of around R93
million - a 120-room Town Lodge in George, a 106-room Town Lodge in Roodepoort
and a 113-room Road Lodge in Centurion. This will take the number of hotels in
the group to 40, offering 4 388 rooms around the country.
Similar trading conditions are anticipated for the remainder of the financial
year which should result in good earnings growth.
ACCOUNTING POLICIES
These unaudited 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 2004.
DECLARATION OF DIVIDEND
Notice is hereby given that ordinary dividend no. 32 of 94,0 cents per share for
the six months ended 31 December 2004 (2003 - 43,0 cents) has been declared.
Shareholders are advised that the last day to trade cum dividend will be Friday,
11 March 2005. The shares will trade ex dividend as from Monday, 14 March 2005
and the record date will be Friday, 18 March 2005. The dividend is payable on
Tuesday, 22 March 2005.
Share certificates may not be dematerialised or rematerialised between Monday,
14 March 2005 and Friday, 18 March 2005, both days inclusive.
For and on behalf of the board
Hans R Enderle
Chairman
Clifford Ross
Chief Executive
11 February 2005
Registered office
38 Wierda Road West
Wierda Valley
Sandton, 2196
Transfer secretaries
Computershare Investor Services 2004 (Pty) Limited
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: M C van Heerden
*Executive
Date: 11/02/2005 01:30:04 PM
Produced by the JSE SENS Department
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