International Hotel Investments plc - Interim Results

On 24 June, Island Hotels Group Holdings plc published its interim results covering the six months ended 30 April 2014.

It important to highlight that the figures for the period under review and those for the previous comparable period have been restated to account for the reclassification of the Coastline Hotel to a discounted operation since the property was sold after the end of the reporting period (as detailed hereunder).

Performance Overview

During the period under review, the Island Hotels Group registered a 12.2% increase in revenue to €12.1 million while operating expenses increased by 5.1% to €11.1 million. As a result, most of the increase in revenue filtered through to earnings before interests, tax, depreciation and amortisation (EBITDA) as this figure improved significantly to €0.94 million compared to €0.16 million in the first six months of the previous financial year.

Although depreciation also increased by 7.3% to €1.49 million, the Group still reported a reduced operating loss of €0.55 million compared to the operating loss of €1.2 million incurred during the six months ended 30 April 2013.

Meanwhile, net finance costs were largely unchanged at €1.2 million leading to a reduced pre-tax loss of €1.7 million, representing a 29.8% improvement over the previous period’s pre-tax loss. After accounting for a tax credit of €0.61 million, the Group’s loss from continuing operations amounted to €1.13 million representing an improvement of €0.67 million over the previous comparable figure. This translates into a negative earnings per share of €0.031 (H1 2013: €0.049).

During the period under review, the Group also incurred a €0.54 million (H1 2013: €0.24 million) loss from the operation of the Coastline Hotel which was sold after the reporting date as detailed below. This inflated the period’s loss to €1.67 million compared to €2.03 million in the previous period.

The most notable movement on the statement of financial position was the reclassification of €15 million in assets and €12.2 million in liabilities related to the Coastline Hotel which was sold after the end of the reporting period. Shareholders’ funds as at 30 April 2014 amounted to €35.1 million which translates into a net asset value per share of €0.965.

Events after reporting period

• Disposal of subsidiary

On 2 May 2014, Island Hotels Group Holdings plc completed the sale of its 100% shareholding in Coastline Hotel Limited, a subsidiary which owns and operates the 4-star Coastline Hotel located at Salina Bay. The net proceeds from the sale of this property amounted to €4.9 million compared to the value of the net assets disposed (including the reversal of a deferred tax provision) of €2.8 million resulting in a profit on disposal of the subsidiary of €2.1 million. This profit is not included in the figures for the period under review but will show up in the full-year financial statements to 31 October 2014.

• Bond Issue

In May 2014, the Group successfully issued a €35 million 6% bond maturing in 2024. The net proceeds from the issue of bonds will be used for the refurbishment and construction works at the Radisson Blu Resort St. Julian’s; the development and operation of the COSTA Coffee brand in the East coast of Spain, the Balearic Islands and the Canary Islands; as well as for general corporate funding purposes.

Downloads

Island Hotels Group Holdings plc – Interim Report for the six-month period ending 30 April 2014.