Interim Results

· Sales up to £8,228,186 (2012: £8,214,828)

· Operating Profit up 27.2% to £536,982 (2012: £422,230)

· EBITDA up 6.4% to £1,095,519 (2012: £1,029,823)

· Profit before tax up to £202,136 (2012: £45,049)

· Net Debt decreased by £366,066

· Earnings per share

Basic 1.1p (2012: 0.2p)

Diluted 1.1p (2012: 0.2P)

Chairman Robert Peel said: In spite of flat Sales we have managed to produce solid EBITDA improvement, REVPAR growth and a modest decrease in finance costs with net debt continuing to decrease. We hope to continue this improvement over the remaining trading periods of the year.

Press enquiries: 0207 266 1100

Nominated advisor and Broker: 0207 418 8900

Peel Hunt LLP

Capel Irwin

CHAIRMAN'S STATEMENT

In the 28 weeks to 18 August 2013 turnover was £8,228,186 (2012: £8,214,828). Over the same period operating profit increased 27.2% to £536,982. EBITDA (earnings before interest, tax and depreciation) increased 6.4% to £1,095,519.

Revpar (accommodation revenue per available room) increased 1.7% with occupancy up 2.0% and average room rate down 0.3%.

Group Overheads decreased 26.5% reflecting in part previous year adjustments on business rates and depreciation and amortisation that decreased by 8.1%.

Profit before tax was £202,136 compared to a profit of £45,049 in the same period last year.

Corporation tax has been provided at an effective rate of 25%. Basic earnings per share were 1.1p compared with 0.2p in the equivalent period in the previous year on 14,012,123 (14,012,123) shares in issue.

FINANCE

On 18 August 2013 net debt stood at £12,000,235 representing loans totalling £11,783,536 and an overdraft of £338,596 less £121,897 cash at bank. Gearing on Shareholders' funds was 54.3% with interest covered 1.1 times. Net debt decreased by £366,066 compared with the previous year end.

The cost of buying out the swap on 18 August 2013 was £329,871 and the Board's view is still that it would make little economic sense to do this bearing in mind that the agreement expires on 11 April 2014

CAPITAL EXPENDITURE

We spent £276,226 in the period (2012: £172,332) mainly in refurbishing the public areas of the Caledonian Hotel in Newcastle, bedroom refurbishment at the Cosmopolitan in Leeds and Bull Hotel in Peterborough. Our strategy is to continue to improve the fabric of our product and we expect to spend more capital expenditure in the current financial year than the £439,308 that was spent in the previous year.

SHAREHOLDERS

We are always delighted to welcome Shareholders to our Hotels where they can see for themselves the progress we have made, whilst enjoying a beneficial discount of 50% of our rack rate tariff, using a special reservations number 0207 266 1100 or e-mail [email protected] . Shareholders can keep in touch with progress in the company and various promotional activities by visiting our website www.peelhotels.co.uk

THE FUTURE

In spite of flat sales we have managed to produce solid EBITDA improvement together with a modest decrease in finance costs. We hope to continue this improvement over the remaining trading periods of the year.

Robert Peel

Chairman

14 October 2013

DIRECTORS AND ADVISORS

Directors

Robert Edmund Guy Peel Executive Chairman

Nicholas David Lawton Parrish Financial Director

Clement John Govett Non-executive Director

Keith Peter Benham Non-executive Director

Norbert Paul Gottfried Petersen Non-executive Director

Secretary

Thrings LLP

Kinnaird House, 1 Pall Mall East, London SW1Y 5AU

Registered Office

5th Floor, Kinnaird House, 1 Pall Mall East, London SW1Y 5AU

Company registration number 3473990

Auditor

Grant Thornton UK LLP

No. 1 Whitehall Riverside, Leeds, LS1 4BN

Bankers

Royal Bank of Scotland Plc

280 Bishopsgate, London EC2M 4RB

Registrars

Computershare Services Plc

PO Box No 82, The Pavilions, Bridgewater Road, Bristol BS99 7NH

Solicitors

Thrings LLP

Kinnaird House, 1 Pall Mall East, London SW1Y 5AU

Stockbroker

Peel Hunt LLP

Moor House, 120, London Wall, London EC2Y 5ET

GROUP STATEMENT OF COMPREHENSIVE INCOME

for the period ended 18 August 2013

Unaudited Unaudited Audited

28 weeks ended 28 weeks ended Year ended

18/08/2013 19/08/2012 03/02/2013

Note £ £ £

Revenue 8,228,186 8,214,828 15,233,026

Cost of sales (6,869,472) (6,826,912) (12,822,715)

Gross profit 1,358,714 1,387,916 2,410,311 

Administration expenses (263,195)  (358,093) (712,251)

Depreciation (558,537) (607,593) (1,137,081)

Operating profit 536,982 422,230 560,979

Finance income - - 318

Finance expense (508,680) (524,424) (961,444)

Fair value movement on derivative 173,834 147,243 302,736

Profit /(loss) before tax 202,136 45,049 (97,411)

Income tax 2 (50,534) (11,262) 101,563

Profit and total comprehensiveincome for the period attributableto owners 151,602  33,787 4,152

Earnings per share

Basic & diluted (pence) 3 1.1 0.2 0.03

GROUP STATEMENT OF CHANGES IN EQUITY

for the period ended 18 August 2013

28 weeks ended 19 August 2012

Unaudited Share Profit

Share premium and loss

Capital account account Total

£ £ £ £

Balance brought forward

at 6 February 2012 1,401,213 9,743,495 10,904,734 22,049,442

Profit and total comprehensive

income for the period - - 33,787 33,787

Balance at 19 August 2012 1,401,213 9,743,495 10,938,521 22,083,229

12 months ended 3 February 2013

Share Profit

Audited Share premium and loss

Capital account account Total

£ £ £ £

Balance brought forward

at 6 February 2012 1,401,213 9,743,495 10,904,734 22,049,442

Profit and total comprehensive

income for the period - - 4,152 4,152

Balance at 3 February 2013 1,401,213 9,743,495 10,908,886 22,053,594

28 weeks ended 18 August 2013

Share Profit

Unaudited Share premium and loss

Capital account account Total

£ £ £ £

Balance brought forward

at 4 February 2013 1,401,213 9,743,495 10,908,886 22,053,594

Profit and total comprehensive

income for the period - - 151,602 151,602

Balance at 18 August 2013 1,401,213 9,743,495 11,060,488 22,205,196

GROUP BALANCE SHEET

at 18 August 2013

18/08/2013 19/08/2012 03/02/2013

Unaudited Unaudited Audited

£ £ £

Assets

Non-current assets

Property, plant and equipment 36,755,235 37,300,058 37,037,546

Deferred tax asset 115,852 201,610 115,852

Total non-current assets 36,871,087 37,501,668 37,153,398

Current assets

Inventories 107,377 106,393 99,529

Trade and other receivables 486,768 580,675 404,449

Prepayments 814,370 796,019 732,105

Current tax asset - 28,275 -

Cash at bank and in hand 121,897 102,342 116,554

Total current assets 1,530,412 1,613,704 1,352,637

Total assets 38,401,499 39,115,372 38,506,035

Equity and liabilities

Equity attributable to owners

Share capital 1,401,213 1,401,213 1,401,213

Share premium 9,743,495 9,743,495 9,743,495

Retained earnings 11,060,488 10,938,521 10,908,886

Total equity 22,205,196 22,083,229 22,053,594

Liabilities

Non-current

Borrowings (due after one year) 11,207,482 10,393,975 9,324,716

Deferred tax liabilities  1,182,914 1,417,523 1,182,914

Derivative financial instruments -  344,812 71,958

Non-current liabilities 12,390,396 12,156,310 10,579,588

Current

Trade and other payables 2,459,160 2,434,337 2,231,275

Borrowings (due within one year) 914,650 2,127,110 3,158,139

Current tax liabilities 102,226 - 51,692

Derivative financial instruments 329,871 314,386 431,747

Current liabilities 3,805,907 4,875,833 5,872,853

Total liabilities and equity 38,401,499 39,115,372 38,506,035

GROUP CASH FLOW STATEMENT

for the Period ended 18 August 2013

Unaudtied Unaudited Audited

18/08/2013 19/08/2012 03/02/2013

£ £ £

Cash flows from operating activities

Profit for the period 151,602 33,787 4,152

Adjustments for:

Financial income - - (318)

Financial expense 08,680 524,424 961,444

Fair value movement on derivative (173,834) (147,243) (302,736)

Income tax income 50,534 11,262 (101,563)

Depreciation  558,537 607,593 1,137,081

Operating profit before changes in

working capital and provisions 1,095,519 1,029,823 1,698,060

UK corporation tax received - - 43,941

(Increase)/decrease in trade and other receivables (161,812) (171,922) 78,609

Increase in trade and other payables 205,919 272,155 95,145

(Increase)/decrease in inventories (7,848) (4,087) 2,777

Net cash from operating activities 1,131,778 1,125,969 1,918,532

Cash flows from investing activities

Interest paid (513,693) (524,424) (1,001,966)

Acquisition of property, plant and equipment (276,226) (172,332) (439,308)

Net cash from investing activities (789,919) (696,756) (1,441,274)

Cash flows from financing activities

New loans - 585,000 585,000

Loan repayments (283,027) (223,027) (467,889)

Net cash from financing activities (283,027) 361,973 117,111

Net increase /(decrease) in cash

and cash equivalents 58,832 791,186 594,369

Cash and cash equivalents at the

beginning of the period (275,531) (869,900) (869,900)

Cash and cash equivalents at the

end of the period (216,699) (78,714) (275,531)

For the purposes of the cash flow statement,

cash and cash equivalents comprise:

Cash and bank balances 121,897 102,342 116,554

Bank overdraft (338,596) (181,056) (392,085)

NOTES TO THE INTERIM RESULTS

for the period ended 18 August 2013

1. Basis of accounting

The interim financial information has been prepared on the basis of the recognition and measurement requirements of adopted IFRSs as at 18 August 2013 that are effective (or available for early adoption) at 2 February 2014. Based on these adopted IFRSs, the Directors have applied the accounting policies, which they expect to apply when the annual IFRS financial statements are prepared for the year ending 2 February 2014.

The group has chosen not to adopt IAS 34 (Interim Financial Statements) in preparing these interim financial statements and therefore the interim financial information is not in full compliance with International Financial Reporting Standards.

The financial information set out in this interim report does not constitute statutory accounts as defined in sections 434 and 435 of the Companies Act 2006. The figures for the year ended 3 February 2013 have been extracted from the statutory financial statements which have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain a statement under section 498(2) and 498(3) of the Companies Act 2006.

The group's accounting policies remain as stated in the group's full annual accounts for the year ended 3 February 2013.

2. Taxation

Tax has been provided at a rate of 25% which represents the expected effective rate for the full year.

3. Earnings per share

Earnings per share are based on the profit after taxation and on the weighted average number of shares in issue during the period.

2 8 weeks 28 weeks Year

ended ended ended

18/8/2013 19/8/2012 3/2/2013

Unaudited Unaudited Audited

Average No. shares - Basic 14,012,123 14,012,123 14,012,123

- Diluted 14,012,123 14,012,123 14,012,123

Independent review report to Peel Hotels plc

Introduction

We have been engaged by the company to review the financial information in the half-yearly financial report for the 28 weeks ended 18 August 2013 which comprises the Group Statement of Comprehensive Income, the Group Balance Sheet, the Group Cash Flow Statement, the Group Statement of Changes in Equity and the related notes.

We have read the other information contained in the half yearly financial report which comprises only the Chairman's Interim Statement and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the Company's members, as a body, in accordance with guidance contained in ISRE (UK and Ireland) 2410, 'Review of Interim Financial Information performed by the Independent Auditor of the Entity'. Our review work has been undertaken so that we might state to the Company those matters we are required to state to them in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our review work, for this report, or for the conclusion we have formed.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The AIM rules of the London Stock Exchange require that the accounting policies and presentation applied to the financial information in the half-yearly financial report are consistent with those which will be adopted in the annual accounts having regard to the accounting standards applicable for such accounts.

As disclosed in Note 1, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The financial information in the half-yearly financial report has been prepared in accordance with the basis of preparation in Note 1.

Our responsibility

Our responsibility is to express to the Group a conclusion on the financial information in the half-yearly financial report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the financial information in the half-yearly financial report for the 28 weeks ended 18 August 2013 is not prepared, in all material respects, in accordance with the basis of accounting described in Note 1.

GRANT THORNTON UK LLP

AUDITOR

LEEDS