| Fri 12 Aug 2005, 14:08 | | RESULTS FOR THE YEAR ENDED 30 JUNE 2005 |
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City Lodge Hotels Limited - Reviewed Group Preliminary Results For The Year
Ended 30 June 2005
City Lodge Hotels Limited
(Registration number 1986/002864/06)
Share code: CLH
ISIN: ZAE 000001483
REVIEWED GROUP PRELIMINARY RESULTS FOR THE YEAR ENDED 30 JUNE 2005
- 20 years of the fundamentals
- Average occupancies 77%
- Headline earnings per share +21%
- Dividends +21%
- Income statement
(Restated)
Year Year
ended ended
30 June % 30 June
R000`s 2005 change 2004
Revenue 390 934 16 335 844
EBITDA 205 131 18 173 824
Depreciation and amortisation (24 406) (23 157)
Operating profit 180 725 20 150 667
Interest income 7 508 7 447
Interest expense (3 854) (8 012)
Income from joint venture 2 802 2 964
Profit before taxation 187 181 22 153 066
Taxation (64 552) (52 510)
Net profit 122 629 22 100 556
Number of shares in issue (000`s) 42 214 42 125
Weighted average number of
shares in issue (000`s) 42 186 42 033
Basic and headline earnings
per share (cents)
- fully diluted 287,5 21 237,1
- undiluted 290,7 22 239,2
Dividends declared per share (cents) 203,0 21 168,0
Effective tax rate (%) 34,5 34,3
Note: Net profit equates to headline earnings.
Cash flow statement
30 June 30 June
R000`s 2005 2004
Cash generated by operations 198 843 180 299
Net interest received/(paid) 2 679 (1 402)
Dividends paid (92 393) (53 787)
Taxation paid (53 349) (52 658)
Net cash inflow from operating activities 55 780 72 452
Cash utilised in investing activities (21 519) (75 856)
- investment to maintain operations (20 393) (23 765)
- investment to expand operations (1 126) (52 091)
Cash effects of financing activities (5 538) (3 921)
Net increase/(decrease) in cash 28 723 (7 325)
Balance sheet
(Restated)
30 June 30 June
R000`s 2005 2004
ASSETS
Non-current assets 479 443 481 240
Property, plant and equipment 436 970 439 857
Investments and loans 38 336 37 361
Deferred taxation 4 137 4 022
Current assets 82 544 48 986
Trade receivables 19 741 16 540
Cash 54 955 26 232
Other 7 848 6 214
Total assets 561 987 530 226
EQUITY AND LIABILITIES
Shareholders` funds 422 136 390 859
Share capital and premium 134 777 133 736
Accumulated profit 287 359 257 123
Non-current liabilities 103 351 98 637
Deferred taxation 43 774 41 010
Borrowings 54 537 53 027
Other 5 040 4 600
Current liabilities 36 500 40 730
Accounts payable and accruals 22 548 27 243
Borrowings - 8 089
Taxation 13 952 5 398
Total equity and liabilities 561 987 530 226
Interest bearing debt to total
shareholders` funds (%) 13 16
Net asset value per share (cents) 1 000 928
Note: The company has authorised capital commitments of R109 million of which
approximately R42 million has been contracted. It is anticipated that
approximately R93 million will be spent by 30 June 2006.
Statement of changes in equity
Share Accumu-
capital lated
R000`s and premium profit Total
Balance at 30 June 2004 133 736 260 343 394 079
Prior year adjustment - (3 220) (3 220)
Restated balance 133 736 257 123 390 859
Issue of new ordinary shares 1 041 - 1 041
Net profit for the year - 122 629 122 629
Dividends paid - (92 393) (92 393)
Balance at 30 June 2005 134 777 287 359 422 136
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 2004, except for the revised accounting
treatment of operating leases following the release of Circular 7/2005 -
Operating Leases, as detailed below.
Prior year adjustment
Operating leases with fixed rental escalations are now expensed on a straight
line basis over the lease term as opposed to being charged against income on the
basis of the cash flows. This had the effect of reducing the prior year`s fully
diluted headline earnings per share from 238,0 cents to 237,1 cents and the
accumulated profit as at 30 June 2004 by R3,2 million. The current year effect
was to reduce net profit by R359 000 (2004 - R384 000). The 2004 income
statement and balance sheet have been restated to take account of the above.
Audit review
These preliminary results have been reviewed by the company`s auditors, KPMG
Inc. Their unqualified review opinion is available for inspection at the
company`s registered office.
Results
The group benefited from a buoyant domestic economy to achieve another highly
satisfactory operational and earnings performance in the year to 30 June.
Continued demand from local business and leisure travellers and increased
awareness of the group`s value-for-money accommodation offerings led to average
room occupancies rising to 77% from 76% in the previous year.
The number of rooms sold increased as a result of both the higher occupancies
and the inclusion of City Lodge Umhlanga Ridge and Road Lodge Rustenburg for the
full year. This contributed to revenues rising by 16% to R390,9 million, whilst
an improvement in the operating profit margin had the effect of increasing the
operating profit by 20%.
Net interest income of R3,7 million compared to a net interest expense of R0,6
million, was mainly due to the repayment and refinancing of certain of the long
term borrowings, which also gave rise to a once-off credit of R2,3 million.
Earnings from the Courtyard Joint Venture at R2,8 million for the year were
slightly below the previous year.
Despite the lower corporate tax rate and the resultant one-off credit of R1,3
million to the deferred tax charge, the group`s effective tax rate at 34,5% was
0,2 percentage points higher than the prior year due to a 72% higher STC charge
for the year following the change in dividend policy.
Net profit increased by 22% to R122,6 million, which translated into a 21%
increase in fully diluted headline earnings per share to 287,5 cents.
A final dividend of 109 cents per share has been declared, bringing the total
dividends declared for the year to 203 cents, a 21% increase over last year.
Change in shareholding
The attention of shareholders is drawn to the announcement by Sun International
Limited made on 3 August 2005 that it is proceeding with the disposal of its
38,6% stake in City Lodge Hotels Limited.
Outlook
Construction has begun on the 120-room Town Lodge George which is expected to
open in the last quarter of the 2006 financial year. The 106-room Town Lodge
Roodepoort and the 112-room Road Lodge Centurion will commence construction once
the relevant regulatory approvals have been granted. A number of other sites are
under negotiation.
Trading conditions are expected to remain favourable in the year ahead, which
should translate into further earnings growth.
Declaration of dividend
Notice is hereby given that ordinary dividend no. 33 of 109 cents per share for
the year ended 30 June 2005 has been declared.
Shareholders are advised that the last day to trade cum dividend will be Friday,
23 September 2005. The shares will trade ex dividend as from Monday, 26
September 2005 and the record date will be Friday, 30 September 2005. The
dividend is payable on Monday, 3 October 2005.
Share certificates may not be dematerialised or rematerialised between Monday,
26 September 2005 and Friday, 30 September 2005, both days inclusive.
For and on behalf of the board
Hans R Enderle Clifford Ross
Chairman Chief executive
12 August 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*
*Executive
Company secretary
MC van Heerden
Sponsor: JP Morgan Equities Limited
Date: 12/08/2005 02:00:07 PM
Produced by the JSE SENS Department
