30th Jun 2005 15:31
Whitbread Hotel Company Limited30 June 2005 WHITBREAD HOTEL COMPANY LIMITED30 June 2005 Whitbread Hotel Company Limited - Preliminary announcement of results for theyear ending 3 March 2005 This preliminary announcement has been prepared for the benefit of preferenceshareholders and debenture holders of Whitbread Hotel Company Limited whoseshares and stock remain listed on the London Stock Exchange. Review of the Group's Business The group has been a wholly owned subsidiary of Whitbread PLC throughout theperiod. 2004/5 2003/4 change £ m £ m Group turnover 393.1 394.2 (0.3)%Operating profit of the group, joint venture and 63.5 66.4 (4.4)%associateProfit before tax 65.1 46.8 39.1%Retained profit for the year 54.2 36.5 48.5% With the full service hotels market in gradual recovery, Marriott delivered likefor like sales growth for the first time since 2000/1. However, with theCourtyard by Marriott disposal leading to a reduction in the size of the estate,operating profits fell by 4.4%. A sale agreement of £79m for the Courtyard hotels was announced in November2004. This disposal during the year was the main contributory factor in anexceptional gain on disposal of fixed assets during the year of £25.9m, whichhas lead to an increase in profit before tax of 39.1% and an increase inretained profit for the year of 48.5%. Underlying growth in profit, excluding the contribution from the disposed hotelswas flat and Marriott's London hotels have been affected by the weakness of theUS dollar, which appears to be stifling a full recovery of the North Americanbusiness traveller market. An effective leisure breaks marketing campaign run over December and January anda good performance in the conference market gave us a strong finish to the year. Whitbread PLC announced in March 2005 its intention to exit from the operationand ownership of the franchised Marriott hotels business. The details of thedisposal were sent by Whitbread PLC to its shareholders on 5 April 2005 and thetransaction was approved at an Extraordinary General Meeting of Whitbread PLC on22 April 2005. On 5 May 2005, 46 Marriott hotels were sold into a joint venturewith Marriott International and the operation of the hotels was transferred toMarriott. The audited consolidated report and accounts of the Whitbread Hotel CompanyLimited will be circulated to preference shareholders and debenture holders ofthe Group as soon as is practicable. International Financial Reporting Standards (IFRS) Whitbread Hotel Company Limited is required to adopt IFRS for financialreporting from 2005 onwards. Comparative information will be restated under IFRSwith reconciliations provided between the results under IFRS compared to UK GAAPresults previously published. WHITBREAD HOTEL COMPANY LIMITED Year ended 3 March 2005 2004/5 2003/4 Before Exceptional After Before Exceptional After exceptional items (note exceptional exceptional items (note exceptional items 2) items items 2) items Notes £m £m £m £m £m £mTURNOVERGroup and share of joint venture Continuing operations 27.7 - 27.7 25.9 - 25.9 Discontinued operations 369.2 - 369.2 371.9 - 371.9 396.9 - 396.9 397.8 - 397.8Less: Share of joint venture turnover (3.8) - (3.8) (3.6) - (3.6)GROUP TURNOVER 393.1 - 393.1 394.2 - 394.2 Net operating expenses (326.3) (4.3) (330.6) (324.4) (4.4) (328.8)GROUP OPERATING PROFIT 66.8 (4.3) 62.5 69.8 (4.4) 65.4Share of operating profit in joint 0.9 - 0.9 0.9 - 0.9ventureShare of operating profit in 0.1 - 0.1 0.1 - 0.1associate Continuing operations 5.9 - 5.9 5.3 - 5.3 Discontinued operations 61.9 (4.3) 57.6 65.5 (4.4) 61.1 OPERATING PROFIT OF THE GROUP, JOINT 67.8 (4.3) 63.5 70.8 (4.4) 66.4VENTURE AND ASSOCIATE NON-OPERATING ITEMSNet profit/(loss) on disposal offixed assets Continuing operations - - - - - - Discontinued operations - 25.9 25.9 - (7.1) (7.1) - 25.9 25.9 - (7.1) (7.1) PROFIT BEFORE INTEREST 67.8 21.6 89.4 70.8 (11.5) 59.3Interest 3 (24.3) - (24.3) (12.5) - (12.5)PROFIT BEFORE TAX 43.5 21.6 65.1 58.3 (11.5) 46.8Taxation 4 (15.2) 4.6 (10.6) (13.2) 3.3 (9.9)PROFIT AFTER TAX 28.3 26.2 54.5 45.1 (8.2) 36.9Equity minority interests (0.1) - (0.1) (0.2) - (0.2)Preference dividends (0.2) - (0.2) (0.2) - (0.2)RETAINED PROFIT FOR THE YEAR 28.0 26.2 54.2 44.7 (8.2) 36.5 EARNINGS PER ORDINARY SHARE (pence) 5Basic and diluted earnings per 36.24 24.40ordinary shareAdjusted basic and adjusted diluted 18.12 29.28earnings per ordinary share WHITBREAD HOTEL COMPANY LIMITEDGroup Statement of total recognised gains and losses Year ended 3 March 2005 2004/5 2003/4 £m £mProfit earned for ordinary shareholdersGroup excluding joint venture and associate 54.0 36.1Joint venture 0.2 0.4Associate - -Total gains and losses recognised for the year 54.2 36.5 The historical cost profit and loss for the period is not materially differentfrom the results reported above. WHITBREAD HOTEL COMPANY LIMITEDGroup balance sheet 3 March 2005 Notes 2005 2004 £m £mFixed assetsIntangible assets (14.3) (15.2)Tangible assets 951.9 996.3Investments in joint venture- Share of joint ventures' gross assets 12.4 11.4- Share of joint ventures' gross liabilities (8.6) (7.8)- Loans to joint ventures 1.8 1.8 5.6 5.4Investments in associate 2.5 2.5 945.7 989.0Current assets and liabilitiesStocks 2.4 2.4Debtors 83.5 50.3Cash at bank and in hand 17.3 52.9 103.2 105.6 Creditors - amounts falling due within one year (219.9) (312.9) Net current liabilities (116.7) (207.3) Total assets less current liabilities 829.0 781.7 Creditors - amounts falling due after more than one yearLoan capital (118.3) (122.3) Provisions for liabilities and charges (56.2) (57.8) 654.5 601.6Capital and reservesCalled up share capital 18.1 18.1Share premium account 126.2 126.2Revaluation reserve 36.8 37.9Other reserves 0.9 0.7Profit and loss account 469.8 414.7 Shareholders' funds 8 651.8 597.6 Equity minority interests 2.7 4.0 654.5 601.6 Shareholders' fundsEquity shareholders 648.7 594.5Non equity shareholders 3.1 3.1 651.8 597.6 WHITBREAD HOTEL COMPANY LIMITEDGroup cash flow statement Year ended 3 March 2005 Notes 2004/5 2003/4 £m £m £m £m Cash flow from operating activities 6 1.2 439.5 Returns on investments and servicing of financeInterest received 0.9 0.4Interest paid (13.2) (12.9)Inter-company interest paid (11.7) -Preference dividends paid (0.2) (0.2)Net cash outflow from returns on investments and (24.2) (12.7)servicing of finance TaxUK Corporation Tax paid (17.0) (6.0) Capital expenditure and financial investmentProperty and plant purchased (40.9) (158.0)Property and plant sold 52.0 45.0 Net cash outflow from capital expenditure andfinancial investment 11.1 (113.0) Acquisitions and disposalsNew businesses acquired - (274.5) Net cash outflow from acquisitions and disposals - (274.5) Net cash outflow before financing (28.9) 33.3 FinancingLoan capital repaid (3.4) (0.6) Net cash outflow from financing (3.4) (0.6) Movement in cash 7 (32.3) 32.7 The financial statements were approved by the directors on 29 June 2005 and aresigned on their behalf by: A D Pellington29 June 2005 WHITBREAD HOTEL COMPANY LIMITED 1. Segmental analysis of turnover, profit and net assets Turnover, profit and net assets are primarily within the United Kingdom both bysource and destination. All activity relates to the ownership and operation of hotels. 2. Exceptional items 2004/5 2003/4 £m £mOperating itemsImpairment of property (4.3) (4.4) Charged against operating profit (4.3) (4.4) Non-operating itemsNet profit/(loss) on disposal of fixed assets Group excluding joint ventures and associates 25.9 (7.1) 21.6 (11.5) The impairment of property in 2004/5 relates to Marriott head office assets(2003/4 relates to a site held for development). The impairment was calculatedby reference to estimated net realisable value. The net profit of £25.9m on the disposal of fixed assets, for the groupexcluding joint ventures and associates, relates primarily to the profit on thedisposal of the 11 Courtyard hotels. The 2003/4 net loss of £7.1m relatesprimarily to book losses on the sales of Swallow hotels. 3. Interest 2004/5 2003/4 £m £mInterest payable: Loans 12.3 12.3 Inter-company with Whitbread 11.7 - Bank overdrafts 0.9 0.4 24.9 12.7Deduct: Interest receivable on short term deposits (0.9) (0.4) Interest capitalised (0.2) (0.3) 23.8 12.0Interest payable by: Joint ventures 0.4 0.4 Associates 0.1 0.1 Total interest 24.3 12.5 WHITBREAD HOTEL COMPANY LIMITED 4. Tax 2004/5 2003/4 £m £mCurrent tax on profits for the yearUK Corporation Tax 10.1 12.4Adjustments to UK Corporation tax for earlier periods 0.6 (1.1) 10.7 11.3 Joint ventures 0.2 0.1Exceptional current UK tax adjustments: Current UK tax on operating exceptional items 0.7 - Total current tax 11.6 11.4 Deferred tax on profitTiming differences - Group 4.2 5.9 - Joint ventures 0.1 -Deferred tax on exceptional items* (5.3) (3.3)Adjustments to deferred tax for earlier periods - (4.1)Total deferred tax (1.0) (1.5) Total tax charge 10.6 9.9 * The tax effect of non-operating exceptional profit of £25.9m (2003/4 costs of£7.1m) is a tax charge of £0.7m (2003/4 credit of £3.3m). 5. Earnings per share Basic earnings per share is calculated by dividing earnings for ordinaryshareholders of £54.2m (2003/4 - £36.5m) by the weighted average number ofordinary shares in issue during the year, 149,570,000 (2003/4 - 149,570,000). Earnings (£m) Earnings per share (p) 2004/5 2003/4 2004/5 2003/4 Earnings and basic earnings per share 54.2 36.5 36.24 24.40Earnings and basic earnings per share attributableto: Goodwill amortisation (0.9) (0.9) (0.60) (0.60)Non operating items, net of tax (26.2) 8.2 (17.52) 5.48Adjusted earnings and adjusted basic earnings pershare 27.1 43.8 18.12 29.28 WHITBREAD HOTEL COMPANY LIMITED 6. Cash flow from operating activities 2004/5 2004/5 £m £mGroup operating profit 62.5 65.4Depreciation 32.3 35.3Amortisation (0.9) (0.9)Exceptional items 4.3 -Payments against provisions (0.5) (0.1)Other non-cash items (1.0) 5.1(Increase)/decrease in stocks - 0.9(Increase)/decrease in debtors (11.8) (13.6)Increase/(decrease) in net creditor balances with the Whitbread Group (98.5) 338.9Increase/(decrease) in creditors 14.8 8.5 Cash flow from operating activities 1.2 439.5 7. Reconciliation of net cash flow to movement in net debt 2004/5 2003/4 £m £mIncrease/(decrease) in cash in the year (32.3) 32.7Cash outflow from decrease in debt 3.4 0.6Loan capital acquired with acquisitions - (2.5) Movement in net debt in the year (28.9) 30.8Net debt at 1 March 2003 (73.4) (104.2) Net debt at 4 March 2004 (102.3) (73.4) 8. Shareholders' funds 2005 2004 £m £mMovements in shareholders' fundsShareholders' funds at 1 March 2003 597.6 561.1Profit earned for ordinary shareholders 54.2 36.5 Shareholders' funds at 4 March 2004 651.8 597.6 9. Accounts The financial information above, which has been prepared on the same basis asset out in the 2004/5 financial statements does not constitute statutoryaccounts as defined in the Companies Act 1985. The financial information forthe year ended 3 March 2005 has been extracted from the statutory accounts onwhich an unqualified audit opinion has been issued. Statutory accounts for theyear ended 3 March 2005, will be delivered to the Registrar in due course. The comparativefinancial information is based on the statutory accounts for the financial yearended 4 March 2004. Those accounts, upon which the auditors issued anunqualified opinion, have been delivered to the Registrar of Companies. WHITBREAD HOTEL COMPANY LIMITED 10. Post balance sheet event On 14 March 2005 Whitbread PLC announced its intention to exit from theoperation and ownership of its franchised Marriott hotels business. The detailsof the disposal were sent by Whitbread PLC to its shareholders on 5 April 2005and the transaction was approved at an Extraordinary General Meeting ofWhitbread PLC on 22 April 2005. On 5 May 2005, 46 Marriott hotels were sold into a joint venture with MarriottInternational (transferring the operation of the hotels to Marriott). This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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