On 23 February, Island Hotels Group Holdings plc published its preliminary financial statements covering the financial year ended 31 October 2011. The results for the financial year under review were similar to those achieved in the previous year. In fact, Island Hotels Group again faced a difficult vacation ownership market. During the year under review, the Group managed to conclude a considerable number of vacation ownership sales on a trade-in basis where only the incremental value of the upgraded sale is taken in the income statement. Moreover, the traded in value is not accounted for in the balance but is nonetheless available to the Group for resale in future years. This overshadowed the regular tourism business which generally exceeded expectations during the twelve months ended 31 October 2011.
During the year under review, the Group also concluded the acquisition of 50% of Buttigieg Holdings through the issuance of 1,070,960 new shares at €1 each. This acquisition, which helped the Group extend its event catering business, was made in the latter part of the year and therefore its full benefits will only be registered as from the 2011/12 financial year as well as in future years.
Overall revenue during the 12 months to 31 October 2011 increased by 5.2% to €30.3 million but the operational cost base also rose by 6.7% to €24.8 million. As a result, the Group’s earnings before interest, depreciation and amortisation declined by 1.1% to €5.5 million. After accounting for depreciation and net finance expenses (which were marginally below the figures incurred in the previous year), the Island Hotels Group registered a pre-tax loss of €0.6 million compared to the €0.62 million loss incurred in the previous financial year ended 31 October 2010. After accounting for the tax credit of €0.36 million, the Group registered a net loss of €0.24 million for the year, slightly higher than the previous year’s loss of €0.2 million (excluding the loss of €0.45 million related to discounted operations).
The Directors did not recommend a final dividend to shareholders as a result of the loss incurred.
Looking forward, the Directors explained that the Group is expected to continue facing difficult business conditions in the foreseeable future. Nonetheless, the Island Hotels Group will maintain its focus on vacation ownership sales, improve operational efficiency and seek further business opportunities. With regards to the Hal Ferh site, the announcement revealed that the Group is actively seeking fresh external equity to finance this development which will commence once the various permits required are obtained. In the meantime, the Group will also continue to leverage on its leadership position in the event catering business which should be enhanced with the new exclusive venues signed up in the coming year.