Peel Hotels : R & A Report 2016

Rep. & Acc. 2006 C O N T E N T S

Page No.

Chairman's Statement 2

Directors and Advisers 3

Strategic Report 4

Directors' Report 6

Corporate governance 10

Directors' remuneration report 13

Independent auditor's report to the members of Peel Hotels plc 15

Consolidated Statement of Comprehensive Income 17

Consolidated Statement of changes in equity 18

Company Statement of changes in equity 19

Consolidated Balance Sheet 20

Company Balance Sheet 21

Consolidated Cash Flow Statement 22

Company Cash Flow Statement 23

Notes relating to the Financial Statements 24

Hotel Directory 43

Shareholder Information 44

C H A I R M A N ' S S TAT E M E N T

I am pleased to report that the Group continued the EBITDA improvement in the Financial Year ended 31 January 2016 that we had hoped to achieve when I wrote my Statement for the 28 weeks ended 16 August 2015. EBITDA improved 3.9% in the Financial Year in comparison to an improvement of 0.5% at the Interim. It is worth pointing out that profit before tax excluding the previous year's fair value movement on the derivative increased from £800,342 to £993,607, an increase of 24%.

Highlights

• Turnover increased 3.4% to £17,011,472 (2015: £16,454,241)

• EBITDA increased 3.9% to £2,570,818 (2015: £2,473,196)

• Operating profit up 7.2% to £1,559,614 (2015: £1,454,481)

• Net debt decreased £752,888

  • Profit before tax increased 3.6% to £993,607 (2015: £959,403)

• Earnings per share basic and diluted 5.70p (2015: 5.24p)

The Board would like to take this opportunity of thanking the management and staff of Peel Hotels for their contribution to the business and for the safety and wellbeing of their guests. I am delighted to report to Shareholders that, on the back of the further improvement in

profitability, the Board feel able to recommend a Dividend of 2.0p (2015: 1.5p) in respect of

the Financial Year ended 31 January 2016. An appropriate Resolution will be put to Shareholders at the AGM on 1 June 2016 and, if approved, the Dividend will be paid on the same day.

We are always delighted to welcome Shareholders to our hotels where they can see for themselves the progress we continue to make, whilst enjoying a beneficial discount. The discount for Shareholders is 50% of our rack rate tariff using the special reservation number 0207 266 1100 or [e-mail] . Shareholders can also keep in touch with progress in the Group and various promotional activities by visiting our website www.peelhotels.co.uk

John Govett, who chaired the Audit Committee from 23 February 1998, retired with effect from the publication of the half year results on 29 September 2015. John's contribution to Peel Hotels over the years has been exceptional and we all miss him greatly and wish him a healthy and happy retirement. We expect to appoint a new Non-executive Director after the AGM and furthermore, a replacement for Keith Benham, who feels he should retire at the end of the current Financial Year.

Our results continue to improve on the back of continuing Revpar growth and a lessening overall cost of finance due to sustained repayment of debt. Satisfactory progress has continued into the new financial year, however we are mindful of the uncertainties in regard to the Referendum on Europe and the increased costs applicable from the 'Living Wage' will have to be absorbed. Our cash resources allow continued investment in our product and this gives us confidence for further growth in the current year.

Robert Peel Chairman

28 April 2016

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D I R E C T O R S A N D A DV I S E R S Directors

Robert Edmund Guy Peel Executive Chairman Nicholas David Lawton Parrish Financial 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

5thFloor, 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

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S T R AT E G I C R E P O R T

The Directors present the Strategic Report of the Group for the year ended 31 January 2016.

Review of the business



The Group achieved a creditable improvement in the Financial Year ended 31 January 2016 with hotel revenues increasing by 3.4% to £17,011,472 (2015: £16,454,241). Hotel gross profit before depreciation and Group administration increased 1.5% to £3,244,401 (2015:

£3,196,325). EBITDA increased 3.9% to £2,570,818 (2015: £2,473,196).

Profit before tax was £993,607 (2015: £800,342 excluding the fair value movement on derivative).

Revpar (accommodation revenue per available room) increased 5.6% with occupancy up 0.8% and average room rate up 4.7%

Administration expenses decreased 6.9%. Depreciation and amortisation decreased 0.7%.



As at 31 January 2016 net debt stood at £10,134,856 (2015: £10,887,744) representing loans totalling £10,196,846 (2015: £10,839,915) and an overdraft of £220,776 (2015: £194,659) less £282,766 (2015: £146,830) cash at bank. Gearing on Shareholders' funds was 42.1% with interest covered 2.8 times. Net debt decreased by £752,888 compared with the previous year.

The reduction in overall debt resulted in £88,132 less finance expense compared with the previous year.

 

£690,900 (2015: £603,295) was spent in the year. We are in the process of changing our central accounting system to a seamless Windows-based system fully integrated to each one of our hotels and this will go live in May 2016. External refurbishment continued at the Midland Hotel. Refurbishment was ongoing at the Crown and Mitre Hotel with the renovation of the front hall areas. Improvements were made to the furnishings in the lobbies of the Bull and Cosmopolitan Hotels. Bedroom refurbishment was ongoing at the George, The Norfolk and the Caledonian Hotels. We are shortly to open Bistro George at the George Hotel, a new food operation aimed at the patronage of local people as well as our residents.

We continue to invest in our internet access throughout all our Hotels giving our Guests faster connection. This service is absolutely free to our Guests and is a vital component to their having a satisfactory stay with us.

In addition to Capital Expenditure £671,791 (2015: £646,520) was spent on repairs and renewals which help us ensure that we are constantly and consistently maintaining and improving our product.

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