Peel Hotels : R & A Report 2017

C O N T E N T S

Page No.

Chairman's Statement 2

Directors and Advisers 4

Strategic Report 5

Directors' Report 7

Corporate Governance 11

Directors' Remuneration Report 14

Independent Auditor's Report to the Members of Peel Hotels plc 16

Consolidated Statement of Comprehensive Income 18

Consolidated Statement of Changes in Equity 19

Company Statement of Changes in Equity 20

Consolidated Balance Sheet 21

Company Balance Sheet 22

Consolidated Cash Flow Statement 23

Company Cash Flow Statement 24

Notes relating to the Financial Statements 25

Hotel Directory 44

Shareholder Information 45

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

The Group was unable to maintain the improvements in performance experienced earlier in the year and in the second half of the Financial Year trading slowed. In particular EBITDA (earnings before interest, tax, depreciation and amortisation), before exceptional expense was comparatively £320,484 lower in the last four periods of the year. A poor winter conference season in Bournemouth impacted the Norfolk Royale Hotel and the flooding in Carlisle had enabled the Crown and Mitre to achieve a very high occupancy in the previous year.

The Brexit decision understandably created a temporary slowdown in commercial activity throughout our Estate.

An exceptional expense of £170,500 has been made to provide for the balance of the back rent due by the Strathdon Hotel, Nottingham, following the determination by arbitration of a long running ground rent review dating back five years between the freeholder and the head lessor.

On a positive note we maintained our REVPAR (accommodation revenue per available room) and net debt decreased £580,087.

Highlights

• Turnover decreased 1.3% to £16,790,320 (2016: £17,011,472)

• EBITDA before exceptional expense decreased 12.5% to £2,250,328 (2016: £2,570,818). This represents operating profit of £1,098,234 adding back exceptional expenses of

  £170,500 and depreciation of £981,594.

• Operating profit before exceptional expense down 18.7% to £1,268,734 (2016:

  £1,559,614)

• Net debt decreased £580,087

• Profit before tax, (including the exceptional expense £170,500 re the Strathdon Hotel) was £575,387 (2016: £993,607)

• Earnings per share basic and diluted 3.1p (2016: 5.7p)

Subsequent to the Financial Year End the Company has negotiated a new long term financing facility with Allied Irish Bank. The terms of this new facility, which will enable the Company to repay the outstanding Loan Notes and Director's loan, will result in a significant reduction in our financial charges going forward.

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.

Regrettably the Board feel unable to recommend a dividend in respect of the Financial Year ended 29 January 2017 (2016: 2.0p). They believe Shareholders will derive a greater benefit through the significant financial charge savings by the Company repaying the Director's Loan and the Loan Note Holders.

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 [e-mail] . Shareholders can also keep in touch

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

with progress in the Group and various promotional activities by visiting our website www.peelhotels.co.uk

We are delighted to welcome Haydn Fentum to the Board of Directors, and Shareholders will be pleased to note that he brings a wealth of hotel experience to the Company. He is co-founder and Chief Executive of Bespoke Hotels - a very successful Hotel Management and Marketing Company.

Having been appointed by the Board Haydn's Directorship will be put to the Shareholders for approval at the 2017 Annual General Meeting.

Keith Benham, as indicated last year, will retire at the AGM. Keith's contribution to Peel Hotels over the years has been exceptional and he will be greatly missed. We wish him a healthy and happy retirement.

It is very difficult to forecast the outcome for financial year 2017/18 as so much depends on staycation and increased tourist activity stimulated by the weak pound. However our refinancing with Allied Irish Bank and the repayment of the Director's Loan and Loan Notes will provide significant savings in the costs of finance and the subsequent benefits of improved cash flow and lessening net debt. Savings in the financial year 2018/19 are estimated to be not less than £160,000, providing that interest rates remain unchanged.

Robert Peel Chairman 19July 2017

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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 Haydn Herbert James Fentum 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

Allied Irish Bank Plc

Registrars

Computershare Investor Services Plc

The Pavilions, Bridgewater Road, Bristol BS13 8AE

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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