27th Mar 2008 07:02
Park Plaza Hotels Limited27 March 2008 27 March 2008 PARK PLAZA HOTELS LIMITED ("Park Plaza" or the "Group") Preliminary Results for the year ended 31 December 2007 Park Plaza Hotels Limited, an owner, operator and franchisor of hotels inEurope, the Middle East and North Africa, today reports results for the 12months ended 31 December 2007. Highlights Unaudited Financial Proforma Statistics for the year ended 31 December 20071 2007 2006 % change Occupancy 82.4% 80.7% +1.7%Average Room Rate €118.8 €115.1 +3.2%Revpar €97.1 €91.6 +6.1%Total Revenue €97.0 million €88.2 million +10.0%EBITDA2 €28.4 million €22.8 million +24.4% • Group revenues up 10.0% to €97.0 million, with occupancy, average room rates and RevPAR in the hotel business all increasing • 24.4% increase in EBITDA to €28.4 million (2006: €22.8 million), driven primarily by strong performances in the UK and hotel management operations • Successful admission of shares to AIM in July, raising £85 million • Existing hotel portfolio enhanced by refurbishments completed at art'otel Ku'damm (Berlin) and Park Plaza Mandarin (Eindhoven), with Park Plaza Vondel (Amsterdam) and art'otel Berlin Mitte refurbishments due for completion in 2008 • Significant strategic progress made towards expanding the Group's portfolio to over 8,000 rooms by 2010, including: - Opening of Park Plaza County Hall (London) in February 2008 - Franchise agreements signed for a Park Plaza hotel in Doha (Qatar) and a Park Plaza hotel and art'otel in Marrakech (Morocco) - Increase in shareholding in Park Plaza Westminster Bridge project to 100% and obtaining of planning permission for an additional floor - 50% joint venture agreement with the Reuben Brothers to build London's first art'otel in Hoxton, London • Cash or cash equivalents at 31 December 2007 of €120 million, giving the Group the flexibility to capitalise on further growth opportunities. Commenting on the results, Boris Ivesha, Chief Executive Officer of Park Plazasaid, "We are extremely pleased to report such good progress during 2007, bothwith regards to our successful admission to AIM in July and the performance ofour hotels and management operations. In addition to ongoing refurbishments inour current estate, the funds raised will support our goal of doubling thenumber of rooms in our portfolio to over 8,000 by 2010. Although it is still early in the year and there are uncertainties in theeconomic environment, we are confident that our current portfolio of hotels andpipeline of opportunities leave the Group well positioned to achieve furthergrowth in 2008 and beyond." 1. Park Plaza Hotels Limited was incorporated and registered in Guernsey on 14 June 2007, however the merger of Euro Sea Group and acquisition of Park Plaza Group did not take place until 17 July 2007. Except where otherwise indicated, all 2007 and 2006 unaudited proforma financial figures in this statement have been calculated as if the company had been incorporated and the merger and acquisition taken place in December 2005. Figures for 2006 are unaudited proforma financial figures calculated as if these events had taken place at 31 December 2005. 2. Earnings before interest, tax, depreciation and amortisation. Enquiries: Park Plaza HotelsBoris Ivesha/ Tel: +44 (0)20 7034 4800Chen Moravsky Tel: +31 (0)20 305 8351 Hudson Sandler Tel: +44 (0)20 7796 4133Jessica Rouleau / Amy Faulconbridge Overview 2007 was a busy year for the Group. On 17 July 2007, Park Plaza HotelsLimited's shares were admitted to trading on the Alternative Investment Market(AIM) of the London Stock Exchange, raising £85 million before costs through aplacing with new institutional investors. The Group's objective is to become one of the leading hotel owner/operators inthe mid to upscale segment and trendy boutique hotel markets in Europe, theMiddle East and North Africa. To achieve this, the Group intends to grow bothorganically and through the acquisition and development of new hotels. We havemade significant progress on both of these fronts since our admission to AIM.The Group's EBITDA increased by 24.4% in 2007, to €28.4 million reflectingstrong performance from our existing hotel portfolio. The Group also has anumber of development projects underway, many of them signed in the past 6months, which will help us achieve our goal of increasing the number of rooms inour portfolio to over 8,000 by 2010. These include the development of newhotels in London (UK), Nuremberg and Cologne (Germany), as well as new franchiseagreements for hotels in Doha (Qatar) and Marrakech (Morocco). The additionalequity capital raised at the time of admission to AIM gives the Group thefinancial flexibility to capitalise on growth opportunities beyond its currentcommitted projects. Financial Performance All 2007 and 2006 unaudited proforma financial figures in this statement havebeen calculated as if Park Plaza had been incorporated on 31 December 2005 and31 December 2006. Total revenue for the year increased by 10% to €97.0 million (2006: €88.2million), reflecting good performances across the Group. Group RevPAR for theyear increased by 6.1% to €97.1 (2006: €91.6) driven primarily by improvementsin average room rates in the Group's properties in the UK and The Netherlands. In the UK, the Group's hotels achieved RevPAR of €144.6 for the full year, a13.7% increase over the previous year (2006: €127.3). The Group's hotels in TheNetherlands achieved RevPAR of Euro 112.5 for the year, an increase of 8.4%(2006: €103.8), primarily driven by a 6.8% increase in average room rate duringthe period whilst maintaining 90% occupancy. The German and Hungarian marketscontinued to be very competitive, reflected in a small reduction in RevPARduring the year to €51.7 (2006: €52.4). Group EBITDA increased by 24.4% to €28.4 million (2006: €22.8 million) as aresult of strong performances from the Group's hotels in the UK and its hotelmanagement operations. This result was achieved despite a challenging year inGermany and Hungary. Profit before tax was €22.1 million (2006: loss of €4.7 million). This figureincludes a profit of €9.2 million from the sale of Park Plaza's 50% shareholdingin Andrassy, a joint venture owning one property in Hungary, and a negativegoodwill adjustment of €13.0 million resulting from the difference in the saleand purchase price of the Park Plaza Group prior to the Initial Public Offeringand the value of the Group at flotation. Excluding these items, the Group wouldhave reported a marginal loss before tax. Following completion of its IPO, Park Plaza's balance sheet provides a strongplatform from which to grow its portfolio. As at 31 December 2007, net debt was€86.5 million, with cash and cash equivalents of €120.0 million. As we indicated at the time of the Group's admission to AIM, the Group intendsto retain its earnings for use in, and to grow, the business and does notenvisage paying any dividends for at least the first 18 months following theGroup's admission to AIM. The Board will keep this policy under review inlight of the growth opportunities available to the Group. Review of Operations Overview The Group operates under two distinct brands which appeal to different targetcustomers: Park Plaza Hotels & Resorts (part of Carlson Hotels Worldwide), overwhich the Group has exclusive rights in 55 countries in Europe, the Middle Eastand North Africa, and art'otel, a brand owned by the Group. The Park Plazabrand is positioned in the mid to upscale segment of full-service hotels andoffers both business and leisure travellers' high quality standard rooms atattractive rates. The art'otel brand, which also operates in the mid to upscalesegment, is built on the concept of individually themed boutique hotels, each ofwhich is dedicated to a well-known modern artist. The Group's strategic partnership with Carlson, one of the world's largesttravel and hospitality companies, provides Park Plaza with access to Carlson'slarge-scale and effective reservation and distribution system. Through thispartnership, the Group benefits from the economies of scale, extensive operatingexperience and the significant negotiating power of Carlson whilst retaining theflexibility and speed of reaction associated with a much smaller organisation. During the year, the Group continued to make good progress, developing a numberof projects in order to expand its hotel portfolio to over 8,000 rooms by 2010.These include obtaining planning permission for an additional floor and ongoingconstruction of the Park Plaza Westminster Bridge hotel in London, startingconstruction of a new build art'otel in Cologne (Germany) and the development ofan existing property in Nuremberg (Germany). Major refurbishment projects ofexisting hotels which will also enhance the Group's portfolio were started inAmsterdam, Berlin and Eindhoven. Two new franchise agreements, signed inDecember 2007, for hotels in Doha (Qatar) and Marrakech (Morocco) will add anadditional 281 rooms. In addition to investment opportunities, the Group willcontinue to look at further options to expand its brands through franchise andmanagement agreements in selected markets. During the year, the Group also successfully implemented a new yield managementsystem across the portfolio. This system allows Park Plaza to take account ofdemand from both the Carlson Central Reservation System and its own internetbookings in real time, assisting managers to maximise room rates and drive topline growth. It will also enable the Group to take full advantage of itsmembership in the new Carlson goldpointsplusSM programme, which covers 965locations in 71 countries. Our Markets The UK, The Netherlands and Germany are currently the principal markets in whichPark Plaza operates. Overview of Hotel Operating Results for the year to 31 December 2007 The following is a discussion of certain summary operating statistics for ParkPlaza's owned/co-owned, operated and managed hotels for the periods indicated.These figures have been extracted from Park Plaza's unaudited managementaccounts and may therefore not be comparable with Park Plaza's audited resultsover the periods shown or any future period. UK Hotel Operations: Key Operating Statistics Year ended 31 December 2007 Year ended 31 December 2006 (Unaudited proforma) (Unaudited proforma) Occupancy 84.8% 80.9%Average Room Rate • 173.6 • 161.9RevPAR • 144.6 • 127.3Total Revenue • 37.7 million • 34.1 millionEBITDA • 12.7 million • 10.5 million The London market as a whole remained strong during the period, albeit slowingslightly in the second half of the year. The Group's owned and co-owned hotelsin London achieved RevPAR growth of 13.7% to €144.6 (2006: €127.3) reflectingincreased market share and higher room rates. Improvements to our Londoncentral reservations office increased the level of direct, non-commissionablebusiness and we also achieved growth in week-end occupancy rates as a result ofstrategic use of third party websites, such as Expedia.com. The Group's conferencing and banqueting business, which accounts for over aquarter of UK revenues, experienced a slower rate of corporate bookings thananticipated in the important pre-Christmas period. Actions have been taken toimprove this performance, including the appointment of a new management team,and this area of our UK business is on track to deliver a stronger performancein 2008. The Netherlands Hotel Operations: Key Operating Statistics Year ended 31 December 2007 Year ended 31 December 2006 • (Unaudited proforma) • (Unaudited proforma) Occupancy 88.9% 87.4%Average Room Rate • 126.8 • 118.7RevPAR • 112.5 • 103.8Total Revenue • 22.4 million • 20.8 millionEBITDA • 8.2 million • 8.0 million The Dutch market remained strong throughout 2007 and Amsterdam continues to beone of the best performing hotel markets in Europe. The Group's hotels achievedRevPAR growth of 8.4% during the year, primarily driven by a 6.8% increase inaverage room rate to €126.8 (2006: €118.7). Despite already having occupancylevels above the market average as a result of the quality of our productoffering, we were able to increase occupancy to 88.9% for the year. In additionto good market conditions, our team's longstanding expertise in revenuemanagement contributed to this result. Park Plaza Victoria (Amsterdam) performed particularly well during the period,gaining market share and benefiting from increased occupancy and higher roomrates. Profitability at Park Plaza Vondel (Amsterdam), which is undergoing amajor refurbishment programme, was adversely impacted by the closure ofone-third of its rooms during the summer. This first phase of the refurbishmentwas completed in September and work on the final phase, including therefurbishment of the remaining rooms and public areas, started in February 2008. In November 2007, the Group started refurbishment of 60 rooms and all the publicareas at Park Plaza Mandarin in Eindhoven. This was completed in February 2008and the benefits of the project are expected to come through during the year. Germany and Hungary Hotel Operations: Key Operating Statistics Year ended 31 December 2007 Year ended 31 December 2006 • (Unaudited proforma) • (Unaudited proforma) Occupancy 76.9% 76.2%Average Room Rate • 67.2 • 68.6RevPAR • 51.7 • 52.4Total Revenue • 29.6 million • 26.2 millionEBITDA • (293,000) • (792,000) The German market remains challenging. In Berlin, some 2,000 rooms were openedin the upscale segment during the year, leading to an over-supply of highquality hotel rooms and high levels of competition. Market occupancy rates inEast and Central Berlin remained stable during the period, with West Berlinbeing most heavily affected by the competitive situation. The high levels ofcompetition have meant that any increase in room rates has tended to have animmediate impact on occupancy. In this market, our strategy is to grow ourcorporate business and decrease our exposure to discounted pricing in theleisure travel market. During the year, the performance of the Group's Berlin hotels was broadly inline with 2006. A small increase in occupancy rates was off-set by a smalldecline in average room rates. As a result, RevPAR for the period reducedslightly, primarily as a result of the competitive nature of the market. TheGroup has taken a number of steps to improve its performance in Germany,including hotel refurbishments, tighter cost controls and the appointment of newmanagement. While the business again made a loss in 2007, tighter management ofcosts and the first full year contribution from Park Plaza Wallstreet had apositive impact on EBITDA, which improved to a loss of €0.29 million (2006: lossof €0.79 million). Modernisation of 133 rooms and all the public areas at art'otel Kudamm in Berlinwas completed in August 2007. These changes will enable the hotel to competemore effectively. Refurbishment at art'otel Berlin Mitte, located in the heartof Berlin's historic centre, commenced in November 2007. It will involverenovation of 109 rooms, including suites, banqueting facilities and meetingrooms, and is scheduled to be completed during the first half of 2008. The Group's art'otel in Budapest, Hungary has shown further signs of recovery inthe second half of the year. This performance has been achieved notwithstandinga very competitive market. Management and Holdings Operation Year ended 31 December 2007 Year ended 31 December 2006 • (Unaudited proforma) • (Unaudited proforma) Total Revenue • 7.4 million €6.3 millionEBITDA €7.7 million €5.3 million EBITDA for our Management and Holdings operation increased by 46.9% to €7.7million reflecting increases in revenue and gross operating profit from ourmanaged hotels. This figure also includes EBITDA generated from intra-groupmanagement fees. Development pipeline During the year, the Group has continued to work towards its goal of more thandoubling the number of rooms in its portfolio to over 8,000 by 2010. InGermany, two projects are underway in Nuremberg and Cologne. In Nuremberg, wehave applied for planning permission to refurbish a former hotel, owned by theGroup, transforming it into a 175 room Park Plaza hotel. The property islocated in the bustling shopping and business centre of Nuremberg and close topublic transportation. Construction of a new build art'otel in Cologne began in October 2007. This 220room development, which Park Plaza will also manage, is located in the city'smidtown Reinau Port development, on the banks of the River Rhine. Whencompleted in 2009, the hotel will feature impressive artwork and will offer itscustomers high quality facilities in an attractive Cologne Old Town location. The refurbishment of an extension to the Park Plaza Victoria (Amsterdam) willadd a further 100 rooms to the Group's portfolio through the conversion of anadjacent office building. The refurbishment is awaiting zoning consent. In December 2007, the Group announced that it had signed two franchiseagreements with Global V Hospitality Inc.. The Park Plaza in Doha (Qatar)opened in January 2008 and North Africa's first Park Plaza, located in Marrakech(Morocco), is due to open in mid 2009. These hotels will add an additional281 rooms. Several portfolio developments have occurred since the year end: In February, the Group announced the acquisition of the remaining 66% ofMarlbray Limited that it did not already own for £10.27 million in cash and theissue of 735,000 new ordinary shares in Park Plaza. As a result, Park Plaza hasincreased its ownership interest in the Park Plaza Westminster Bridge project to100%. This prestigious development, situated at the southern end of WestminsterBridge, will also be managed by Park Plaza when it opens, expected to be in2010. The hotel will have 1,037 apartments when completed, almost 80% of whichhave already been pre-sold. The Park Plaza County Hall (London), a managed property with 398 rooms, openedon 1 February 2008. The hotel's occupancy rates since opening have beenencouraging and customer feedback has been extremely positive. On 6 March 2008, the Group announced a further franchise agreement with Global VHospitality Inc to open the first art'otel in Marrakech. The hotel will have 70rooms and is expected to open in mid 2009. On 14 March 2008, we announced a joint venture agreement with AldersgateInvestments Limited, the property vehicle of the Reuben Brothers, to develop andmanage London's first art'otel located in the trendy area of Hoxton, on the edgeof the City of London. It is expected that the proposed hotel will consist ofseveral hundred rooms and suites, a choice of restaurants and bars, an artgallery and two auditoriums, which will show cult films. A planning applicationfor the project is expected to be submitted later this year. Current Trading and Outlook Trading across our portfolio for the first 12 weeks of 2008, has been in linewith our expectations and to date we have not experienced any significant impactfrom the widely publicised general economic slowdown. In the UK, we have achieved underlying revenue and EBITDA growth in the mid tohigh single digit range in the first 12 weeks of the year and bookings for theremainder of 2008 are encouraging. However, reported profitability in the UK,which accounted for over 40% of the Group's EBITDA in 2007, will potentially beaffected by adverse movements in the GBP to Euro exchange rates. The averageGBP to Euro exchange rate for the first 12 weeks of the year was 11% lower thanfor the comparable period in 2007. In The Netherlands, our operations have delivered high single digit revenuegrowth and similar levels of EBITDA growth in the first 12 weeks of the year.The major refurbishment programme at the Park Plaza Vondel (Amsterdam) and ParkPlaza Mandarin (Eindhoven) are expected to contribute to a continued strongperformance in 2008. In Germany and Hungary, markets are likely to remain challenging throughout theyear, but we expect the steps we have taken to improve the performance of ourhotels to deliver progress in both revenue and EBITDA. Our management operations have also been performing in line with ourexpectations. Although it is still early in the year and there are uncertainties in theeconomic environment, we believe that our current portfolio of hotels andpipeline of opportunities leave the Group well positioned to achieve furthergrowth in 2008 and beyond. Owned / co-owned Hotels - Selected Unaudited Operational and FinancialStatistics * The following table provides certain summary operating statistics for ParkPlaza's owned/co-owned, operated and managed hotels for the periods indicated.These data have been extracted from Park Plaza's unaudited management accountsand may therefore not be comparable to Park Plaza's audited results over theperiods shown or to be expected for any future period. No. of Occupancy ARR RevPAR rooms Jul- Dec Jul- Dec Jan- Jun Jul- Dec Jul- Dec Jan- Jun Jul- Dec Jul- Dec Jan- Jun 2007 2006 2007 2007 2006 2007 2007 2006 2007 • • • • • •Park Plaza Victoria 306 96% 95% 95% 151 146 147 145 139 139Amsterdam Vondel Park Plaza 143 85% 85% 78% 108 94 102 88 80 76(Amsterdam) Park Plaza Utrecht 120 85% 83% 81% 102 93 108 88 80 87(Utrecht) Park Plaza Mandarin 102 85% 77% 86% 98 90 102 84 69 87EindhovenPark Plaza 394 83% 83% 80% 153 153 151 124 121 121Riverbank(London)Plaza on the River 66 82% 85% 76% 336 303 285 272 250 217(London)Park Plaza Victoria 299 89% 90% 88% 170 157 168 148 139 148(London)Park Plaza Sherlock 119 90% 90% 88% 183 173 181 163 153 159Holmes(London) Owned / co-owned Hotels - Selected Unaudited Operational and Financial Statistics * The following table provides certain summary operating statistics for ParkPlaza's owned/co-owned, operated and managed hotels for the periods indicated.These data have been extracted from Park Plaza's unaudited management accountsand are not comparable to Park Plaza's audited results over the periods shown orto be expected for any future period. Total Revenue GOP EBITDA Jul- Dec Jul- Dec Jan- Jun Jul- Dec Jul- Dec Jan- Jun Jul- Dec Jul- Dec Jan- Jun 2007 2006 2007 2007 2006 2007 2007 2006 2007 • '000 • '000 • '000 • '000 • '000 • '000 • '000 • '000 • '000Park Plaza Victoria 5,440 5,193 5,480 2,545 2,468 2,415 2,183 1,953 1,923(Amsterdam)Vondel Park Plaza 2,104 2,399 1,929 933 1,177 697 749 1,213 353(Amsterdam)Park Plaza (Utrecht) 1,580 1,473 1,675 733 670 805 629 580 689Park Plaza Mandarin 2,007 1,782 2,166 915 911 1,085 770 763 919(Eindhoven)Park Plaza 8,859 8,719 8,094 3,908 3,602 3,148 2,960 2,645 1,699Riverbank(London)Plaza on the River 1,904 1,620 1,421 1,369 1,221 952 1,458 1,093 829(London)Park Plaza Victoria 6,069 5,785 6,209 2,836 2,689 2,884 2,290 2,050 2,193(London)Park Plaza Sherlock 2,622 2,499 2,495 1,215 1,204 1,109 751 656 565Holmes(London) Owned / co-owned Hotels - Selected Unaudited Operational and Financial Statistics * The following table provides certain summary operating statistics for ParkPlaza's owned/co-owned, operated and managed hotels for the periods indicated.These data have been extracted from Park Plaza's unaudited management accountsand may therefore not be comparable to Park Plaza's audited results over theperiods shown or to be expected for any future period. No. of rooms Occupancy ARR RevPAR Jan- Dec Jan- Dec Jan- Dec Jan- Dec Jan- Dec Jan- Dec 2007 2006 2007 2006 2007 2006 • • • •Park Plaza Victoria Amsterdam 306 96% 95% 149 144 142 137 Vondel Park Plaza 143 81% 81% 105 95 82 96(Amsterdam)Park Plaza Utrecht 120 83% 83% 105 93 89 79(Utrecht)Park Plaza Mandarin Eindhoven 102 85% 78% 100 93 86 72Park Plaza Riverbank 394 82% 76% 152 151 122 109(London)Plaza on the River 66 79% 72% 311 281 241 192(London)Park Plaza Victoria 299 88% 88% 169 152 147 131(London)Park Plaza Sherlock Holmes 119 89% 86% 182 167 159 140(London) Owned / co-owned Hotels - Selected Unaudited Operational and Financial Statistics * The following table provides certain summary operating statistics for ParkPlaza's owned/co-owned, operated and managed hotels for the periods indicated.These data have been extracted from Park Plaza's unaudited management accountsand may therefore not be comparable to Park Plaza's audited results over theperiods shown or to be expected for any future period. No. of rooms Total Revenue GOP EBITDA Jan- Dec Jan- Dec Jan- Dec Jan- Dec Jan- Dec Jan- Dec 2007 2006 2007 2006 2007 2006 • '000 • '000 • '000 • '000 • '000 • '000Park Plaza Victoria 306 10,920 9,933 4,960 4,525 4,106 3,682AmsterdamVondel Park Plaza 143 4,033 4,283 1,630 2,118 1,102 1,729(Amsterdam)Park Plaza Utrecht 120 3,255 2,942 1,538 1,295 1,318 1,106(Utrecht)Park Plaza Mandarin 102 4,173 3,688 2,000 1,766 1,689 1,463EindhovenPark Plaza Riverbank 394 16,953 15,890 7,056 6,194 4,659 4,089(London)Plaza on the River 66 3,325 2,545 2,321 1,761 2,288 1,537(London)Park Plaza Victoria 299 12,278 11,120 5,720 5,160 4,483 3,895(London)Park Plaza Sherlock Holmes 119 5,117 4,584 2,323 2,085 1,316 1,024(London) PRO-FORMA PROFIT & LOSS STATEMENT The following profit and loss statement presents the 2007 unaudited proformaprofit and loss for the Group as if the business combination of Euro Sea Groupand Park Plaza had taken place at the beginning of the year. The figures shownfor 2006 reflect the unaudited pro-forma statement of operations as disclosed inthe Group's AIM Admission Document and prepared on the basis of the assumptionsdisclosed in the notes to that statement 2007 2006 • '000 • '000 Revenues 97,058 88,213Operating expenses (57,677) (56,490) EBITDAR 39,381 31,723Rental expenses (11,006) (8,916) EBITDA 28,374 22,807Depreciation and amortisation (9,353) (9,235) EBIT 19,021 13,572 Finance expenses net (19,025) (18,329)Share in loss of associate (40) 85Other income 22,184 - PROFIT BEFORE TAX 22,140 (4,672)Income taxes 923 (930) Net profit for the year 23,063 (5,602) AUDITED CONSOLIDATED INCOME STATEMENT Year ended 31 December 2007 2006 • '000 (Except earning per share) Revenues 75,039 48,852Operating expenses (44,503) (35,770) EBITDAR 30,536 13,082Rental expenses (6,102) (1,165) EBITDA 24,434 11,917Depreciation and amortisation (7,252) (5,180) EBIT 17,182 6,737 Financial expenses (20,831) (14,491)Financial income 3,782 1,321Share in profit (loss) of associate (40) 85Other income 22,184 - Profit (loss) before tax 22,277 (6,348)Income tax expense (benefits) (21) 1,555 Profit (loss) for the year 22,298 (7,903) Basic and diluted earnings (loss) per share (In Euro) 0.54 (0.45) AUDITED CONSOLIDATED BALANCE SHEET 31 December 2007 2006 • '000 ASSETS NON-CURRENT ASSETS: Intangible assets 56,993 -Property, plant and equipment 170,848 134,443Prepaid leasehold payments 20,621 18,678Investment in associate 9,109 10,028Other financial assets 3,707 4,346 261,278 167,495 CURRENT ASSETS: Inventories 578 276Trade receivables 10,634 3,273Other receivables and prepayments 4,161 1,574Short-term deposits - 1,564Restricted cash 646 1,021Cash and cash equivalents 119,376 6,212 135,395 13,920 Total assets 396,673 181,415 AUDITED CONSOLIDATED BALANCE SHEET 31 December 2007 2006 • '000EQUITY AND LIABILITIES EQUITY: Issued capital - -Share premium 195,894 14,401Foreign currency translation reserve (11,009) (3,332)Hedging reserve 1,759 4,349Accumulated deficit (21,377) (28,675) Total equity 165,267 (13,257) NON-CURRENT LIABILITIES: Bank borrowings 177,912 169.020Other financial liabilities 2,607 618Deferred income taxes 2,061 1,192 182,992 170,830 CURRENT LIABILITIES: Trade payables 4,502 4,903Other payables and accruals 15,668 9,825Bank borrowings 28,656 9,114 48,826 23,842 Total liabilities 213,818 194,672 Total equity and liabilities 396,673 181,415 AUDITED CONSOLIDATED CASH FLOW STATEMENT Year ended 31 December 2007 2006 • '000Cash flows from operating activities: Profit (loss) for the year 22,298 (7,903)Adjustment to reconcile net profit (loss) to cash provided by operating (17,466) 5,407activities (a) Net cash provided by operating activities 4,832 (2,496) Cash flows from investing activities: Purchase of property, plant and equipment (8,637) (11,797)Net change in cash upon acquisition of the Park Plaza Group (b) 6,735 -Net change in cash upon disposal of subsidiary (c) 14,930 (1,628)Decrease (increase) in short-term deposits, net 3,459 (989)Decrease (increase) in restricted cash 375 (117)Collection of loans to jointly controlled entities - 4,501Loans to related parties - (8,686) Net cash provided by (used in) investing activities 16,862 (18,716) Cash flows from financing activities: Proceeds from issuance of new shares 116,490 -Dividend distribution (15,000) -Proceeds from long-term loans 720 134,997Repayment of long-term loans (3,068) (116,251)Increase (decrease) in short-term credit, net 67 (807)Increase (decrease) in loans from related parties 687 (247) Net cash provided by financing activities 99,896 17,692 Increase (decrease) in cash and cash equivalents 121,590 (3,520)Net foreign exchange differences (8,426) 379Cash and cash equivalents at beginning of year 6,212 9,353 Cash and cash equivalents at end of year 119,376 6,212 Year ended 31 December 2007 2006 • '000 (a) Adjustment to reconcile profit (loss) to net cash provided by operating activities: Gain on sale of investments (9,148) - Negative goodwill on acquisition of Park Plaza Group (13,036) Share in loss (profit) of associate 40 (85) Provision for impairment - 1,404 Deferred income taxes 682 (29) Depreciation and amortisation 9,360 5,820 Changes in operating assets and liabilities: Decrease in other assets - 676 Increase in inventories (65) (6) Share based payments 68 - Decrease (increase) in trade and other receivables 199 (466) Decrease in trade and other payables (5,566) (1,907) (17,466) 5,407 (b) Net change in cash upon acquisition of the Park Plaza Group: Current assets (except cash) (12,922) - Current liabilities 29,889 - Long-term assets (112,734) - Long-term liabilities 28,531 - Premium on shares issued as consideration for acquisition 60,935 - Negative goodwill 13,036 - 6,735 - Year ended 31 December 2007 2006 • '000 (c) Net change in cash upon disposal of subsidiary: Current assets (except cash) 307 11 Current liabilities (104) (1,096) Property 5,579 - Long-term liabilities - (543) Gain on sale 9,148 - 14,930 (1,628) (d) Supplemental disclosure of cash flows: Cash paid during the year: Income taxes 294 259 Cash received during the year: Interest received 2,996 - (e) Significant non-cash transactions: Shares issued to acquire the Park Plaza Group 60,935 - Shares issued to acquire intangibles 4,000 - NOTE 1: GENERAL Description of business and formation of the Company: The Company was incorporated and registered in Guernsey on 14 June 2007. The Company through its subsidiaries owns, operates and manages hotels inEurope, Middle East and Africa under two primary brands: Park Plaza andart'otel. On 14 July 2007, the Company entered into an agreement to acquire the Euro SeaGroup. For periods prior to the legal formation of the Company, the assets,liabilities, revenues and expenses of Euro Sea Group were consolidated inpreparing the financial statements. Also on 14 July 2007, as part of the Group'sIPO it acquired 100% of the voting shares of Park Plaza Hotels Europe HoldingB.V., its subsidiaries and other investments ("Park Plaza Group"). As of thisdate the assets, liabilities, revenues and expenses of the Park Plaza Group wereincluded in the consolidated financial statements. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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