ELEGANT HOTELS GROUP PLC INTERIM RESULTS FOR THE PERIOD ENDED 31 MARCH 2018

Transcription

1 ELEGANT HOTELS GROUP PLC INTERIM RESULTS FOR THE PERIOD ENDED 31 MARCH 2018

2 DISCLAIMER The content of this promotion has not been approved by an authorised person within the meaning of the Financial Services and Markets Act Reliance on this promotion for the purpose of engaging in any investment activity may expose an individual to a significant risk of losing all of the property or other assets invested. This presentation is for information purposes only and no reliance may be placed upon it. No representation or warranty, either expressed or implied, is provided in relation to the accuracy, completeness or reliability of the information contained in this presentation. This presentation does not constitute or form part of any offer or invitation for sale or subscription of, or any solicitation of any offer to buy or subscribe for, any securities of Elegant Hotels Group plc. The making of this presentation does not constitute a recommendation regarding any such securities This presentation contains certain forward-looking statements. Any statement in this presentation that is not a statement of historical fact including, without limitation, those regarding Elegant Hotels Group plc s future business, financial condition, financial performance, operations, prospects or developments is a forward-looking statement. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "anticipates", "believes", "envisages", "estimates", "expects", "intends", "hopes", "may", "plans", "targets", "will", "would", "could" or "should" or, in each case, the negative of those, variations or comparable expressions. By their nature, forward-looking statements involve risk and uncertainty as they relate to events which occur in the future. No representation or warranty is made that any of these statements or forecasts will come to pass or that any forecast results will be achieved. Actual performance or results may differ materially from any future results, performance or achievement expressed or implied by these forward-looking statements. Factors which may give rise to such differences include (but are not limited to) changing business conditions, introduction of competing products by other companies, and changing economic, legal or regulatory conditions. New factors could emerge that could cause Elegant Hotels Group plc s business not to develop as it expects. These and other factors could adversely affect the outcome and financial effects of the events specified in this presentation. The forward-looking statements are made by the Directors of Elegant Hotels Group plc in good faith based on the information available to them at 15 May 2018 and reflect the Directors knowledge and information available at that date and their beliefs and expectations. Elegant Hotels Group plc does not intend to update any forward-looking statements contained in this presentation. Each forwardlooking statement speaks only as at 15 May 2018 and Elegant Hotels Group plc and its advisers expressly disclaim any obligations or undertaking to release any update of, or revisions to, any forward-looking statements in this presentation. No statement in the presentation is intended to be, or intended to be construed as, a profit forecast or profit estimate and no statement in the presentation should be interpreted to mean that earnings per Elegant Hotels Group plc share for the current or future financial years will necessarily match or exceed the historical earnings per Elegant Hotels Group plc share. As a result, you are cautioned not to place any undue reliance on such forward-looking statements. Past performance of securities in Elegant Hotels Group plc cannot be relied upon as a guide to the future performance of such securities. Please note that due to rounding, numbers presented throughout this document may not add up precisely to the totals provided. Percentage changes are calculated on unrounded figures.

3 OPERATIONAL REVIEW SUNIL CHATRANI, CEO

4 WAVES OVERVIEW HOTEL & SPA TIMELINE Good progress on key metrics in the new normal of a challenging market which is stabilising. Occupancy increased to 67% (H1 2017: 66%). Treasure Beach opened mid peak season in December 2017, resulting in a 6% increase in room count to 588. Hodges Bay Antigua due to open under management contract in H The House reopened after a refurbishment of public areas and the addition of a spa. Established a centralised purchasing warehouse in order to increase operational efficiencies and take advantage of direct importation of inventory. Current trading in line with market expectations, with bookings for the peak season in 2018/19 tracking ahead of the same period last year. Implied Net Asset Value (NAV) of 143 pence per share (199 cents per share*). Interim dividend of 1.33 pence per share declared, in line with the Group s revised dividend strategy. * At 1:$1.40 4

5 WAVES MARKET HOTEL CONTEXT & SPA TIMELINE Market conditions in Barbados appear to be stabilising after several challenging years. Sterling/USD exchange rate has improved but the effect on sales will not be seen until the peak 2018/19 tourist season due to the advance booking window for the Group s properties. Arrivals to Barbados in Q were up 1% with the UK market falling 2% (Barbados Tourism Marketing Inc). Arrivals from North America increased by 3% in Q4 2017, now accounting for 17% of the Group s overall room nights (H1 2017: 16%). Airlift continues to be strong out of the UK and North American market. The trend towards the villa and value market continues. The Government of Barbados has increased import taxes. 5

6 WAVES DAY TO HOTEL DAY & OPERATIONAL SPA TIMELINE EXCELLENCE: KEY METRICS USD H H % change Total room count % Occupancy 67% 66% 1 ppt ADR (average daily rate) $433 $425 2% RevPAR (revenue per available room) $292 $279 5% Total revenue $38.8m $35.8m 8% Room revenue from tour operators (%) 78% 77% (1 ppt) Room nights (%): - North America 17% 16% 1 ppts - UK 72% 76% (4 ppts) - Other 11% 8% 3 ppts 6

7 WAVES DAY TO HOTEL DAY & OPERATIONAL SPA TIMELINE EXCELLENCE - HIGHLIGHTS Target markets Increase in North American room nights reflects success of sales and marketing efforts towards the US market, alongside increased arrivals. Waves continues to outperform in this segment. Go to market strategy Focussing on direct business. Website bookings are increasing. Product Targeted improvements of the portfolio continues. Increasing focus on spa products; new spa at the House. Food and beverage outlets being repositioned to improve capture ratios. Service Guest satisfaction continues to be high. Circa 30,000 hours training invested in our people. Cost control - Central warehousing function opened in January 2018 and fully operational from March

8 DEVELOP EXISTING PORTFOLIO The House Extensive renovations on The House in order to drive rate; all public areas renovated and a new spa developed. The House awarded Gold 'Best Small Hotel - Caribbean at the World Travel Market Virgin Holidays Annual Award Dinner and named within the top 25 luxury destinations in the Caribbean by Caribbean Journal. Increase in ADR and occupancy drove 7% revenue increase over the prior period. Other Developing refurbishment plans for the Group s properties. Continuous focus on strategy of refurbishing, repositioning and repricing. 8

9 WAVES EXPANSION HOTEL & STRATEGY SPA TIMELINE Treasure Beach Opened Treasure Beach, a 35 suite hotel, with a focus on art and food. $2.8m invested in refurbishing all public areas and rooms. Hotel opened in mid-december, later than originally planned, missing the peak season. As a result, occupancy lower than anticipated. Expansion Management agreement for Hodges Bay Resort & Spa, a new 122-room luxury hotel in Antigua, is not yet operational, expected to open in H Hodges Bay named by CNN as one of the 14 best new 2018 Caribbean resort openings. Sales and marketing agreement for The Landings Resort & Spa, an 85 villa property in St. Lucia, continues to drive great results for that property. Continually assessing potential acquisition targets throughout the wider Caribbean. Acquisition announced in January delayed as it was not deemed to be sufficiently value enhancing at this time. The Group is focused on balancing its cash and debt needs. 9

10 FINANCIAL REVIEW JEFF SINGLETON, CFO

11 FINANCIAL HIGHLIGHTS USD H % YoY H % YoY H Total room count 588 6% Occupancy 67% 1 ppt 66% (3 ppt) 69% ADR (average daily rate) $433 2% $425 (8%) $464 RevPAR (revenue per available room) $292 5% $279 (13%) $320 Total revenue $38.8m 8% $35.8m (2%) $36.5m Revenue growth excl. PY acquisitions 5% (13%) Adjusted operating profit* $13.1m (2%) $13.3m (12%) $15.1m Adjusted EBITDA* $15.4m 1% $15.3m (9%) $16.7m Adjusted EBITDA margin (%)* 39.6% (3 ppts) 42.7% (3 ppts) 45.8% Adjusted diluted EPS (cents)* 10.5 (5%) 11.0 (15%) 12.9 * Excludes acquisition and other one-off amounts. 11

12 ADJUSTED INCOME STATEMENT: EBITDA USD H % YoY H % YoY H Revenue $38.8m 8% $35.8m (2%) $36.5m Gross profit $25.1m 7% $23.5m (5%) $24.6m Gross margin 64.7% (1 ppts) 65.5% (2 ppts) 67.4% Adjusted operating costs* $(10.2)m 15% $(8.8)m 5% $(8.4)m Adjusted operating costs - % revenue 26.3% 2 ppts 24.7% 2 ppts 23.1% Adjusted EBITDA* $15.4m 1% $15.3m (9%) $16.7m Adjusted EBITDA margin (%)* 39.6% (3 ppts) 42.7% (3 ppts) 45.8% Acquisition and other one-off items $(0.7)m (8%) $(0.7)m n/a $2.6m Reported EBITDA $14.7m 1% $14.6m (25)% $19.3m * Excludes acquisition and other one-off amounts. 12

13 ADJUSTED INCOME STATEMENT: EPS USD H % YoY H % YoY H Adjusted EBITDA * $15.4m 1% $15.3m (9%) $16.7m Depreciation, amortisation and loss on disposal of assets $(2.3)m 17% $(1.9)m 22% $(1.6)m Adjusted operating profit* $13.1m (2%) $13.3m (12%) $15.1m Net finance expenses $(1.6)m 51% $(1.1)m 46% $(0.7)m Adjusted taxation $(2.1)m (14%) $(2.4)m (15%) $(2.9)m Adjusted profit after tax* $9.3m (5%) $9.8m (15%) $11.5m Adjusted diluted EPS (cents)* 10.5 (5%) 11.0 (15%) 12.9 Reported profit after tax $8.8m (4%) $9.2m (2%) $9.4m Reported diluted EPS (cents) 9.9 (4%) 10.3 (3%) 10.6 * Excludes acquisition and other one-off amounts. 13

14 CASH FLOW USD H1 18 % change H1 17 % change H1 16 Operating profit before working capital $14.4m (1%) $14.3m (10%) $15.8m Working capital $(4.8)m - $(4.8)m 20% $(4.0)m Tax paid $(1.0)m (37%) $(1.6)m 161% $(0.6)m Operating cash flow $8.6m 8% $8.0m (29%) $11.2m Capex $(4.1)m 46% $(2.8)m 38% $(2.0)m Free cash flow $4.5m (12%) $5.2m (44%) $9.2m Interest paid $(1.6)m 54% $(1.1)m 47% $(0.7)m Dividends paid $(2.2)m (44%) $(3.9)m (18%) $(4.7)m Net loan (repayments)/receipt $(3.1)m 72% $(1.8)m n/a $4.9m Acquisitions (net of cash acquired) n/a $(3.4)m Net cash (outflow)/inflow $(2.4)m (48%) $(1.6)m n/a $5.2m 14

15 NET DEBT AND NET ASSET VALUE USD 31 Mar Sep Mar 17 Scotiabank term loan (due 2020) $65.2m $67.9m $62.2m Scotiabank revolving facility $4.3m $4.8m - Waves vendor loan $1.0m $1.0m $1.5m Total loans and borrowings $70.6m $73.7m $63.7m Bank overdraft $3.9m $0.4m $0.6m Cash and cash equivalents $(2.1)m $(1.0)m $(2.7m) Net debt $72.3m $73.1m $61.6m Net debt to LTM Adj. EBITDA ratio 4.0 X 4.0 X 3.4 X Implied total property value $249.5m $267.2m $257.5m Net asset value $177.2m $194.1m $195.9m Net asset value per share (cents) Net asset value per share (pence) * 31 Mar 18: 1:$1.40, 30 Sep 17: 1:$1.34, 31 Mar 17: 1:$

16 DIVIDEND AND OUTLOOK SUNIL CHATRANI, CEO

17 SUMMARY WAVES HOTEL & SPA TIMELINE Outlook Stable first half of 2017/18 with over 95% of business on the books for the remainder of the year. Bookings for the peak 2018/19 season currently tracking ahead of the same period last year. As a result, the Group remains comfortable in its prospects for FY18 and beyond. Dividend As disclosed in January 2018, the Group expects to pay a full year dividend of 4.0p for the financial year ending 30 September Interim dividend of 1.33 pence per share has been declared. Investment case US dollar earning, asset backed portfolio. Significant expansion opportunities in the region. 14

18 Q&A SESSION

19 APPENDICES

20 HOTEL OPERATING METRICS Hotel Revenue Occupancy H H H H H H Colony Club % 71% 77% Tamarind % 62% 68% The House % 67% 75% Crystal Cove % 71% 75% Waves n/a 77% 76% n/a Turtle Beach % 58% 60% Treasure Beach 1.1 n/a n/a 46% n/a n/a 20

21 Non-Executive Directors Executive Directors & Chairman BOARD & SENIOR TEAM plc Board SUNIL CHATRANI CEO JEFF SINGLETON CFO SIMON SHERWOOD Non-executive Chairman Became CEO in late 2012 after joining as CFO in 2010 Director of the Barbados Hotel and Tourism Association Chartered Accountant with over 15 years industry experience MBA from the University of Bradford Joined Group in 2016 Formerly of Rocco Forte Hotels and De Vere Group Chartered Accountant with over 20 years experience Joined Elegant in 2009 Former CEO and led IPO of Orient- Express Hotels Formerly Chairman of D&D restaurants and advisor to LBG on disposals (e.g. De Vere) STEVE BALDWIN SENIOR NED LUKE JOHNSON NED Chartered Accountant with over 25 years City experience including JPMorgan Cazenove, UBS and Macquarie Capital NED at Plus500, TruFin and trustee for Howard de Walden Estate Chairman of private equity house Risk Capital Partners LLP Extensive range of other public and private company roles Executive Management Team Sylvia Scholey VP Sales & Marketing Joined 2009 Responsible for global sales, marketing and revenue delivery Over 20 years industry experience Based in Florida, USA MBA from Kellogg School of Management Gayle Talma Group Operations Director Joined years of industry experience Previously worked in majority of Elegant properties BS in Hospitality Management from Florida International University Ian Gooding-Edghill HR Director Joined 1994 Over 20 years of industry experience Elected as President of the Barbados Employers Confederation in 2008, Vice President from Shauna Kissoon General Counsel & Corporate Secretary Joined 2013 Provides corporate secretarial services and legal opinion for the Group. Attorney-at-Law for over 15 years. Called to the Bar of Barbados, Guyana, and The Commonwealth of Dominica. Member of the Inner Temple (London). 21

22 THE CURRENT PORTFOLIO SIX OF ELEGANT S SEVEN FREEHOLD PROPERTIES ARE ON THE EXCLUSIVE PLATINUM COAST IN BARBADOS 22

23 WAVES EXPANSION HOTEL & STRATEGY SPA TIMELINE Management contracts represent a compelling opportunity to expand beyond Barbados Require less initial capital investment than full ownership All properties benefit from the Group s distribution platform and relationships with tour operators Pursuing management contracts and new acquisitions in Barbados, Antigua, St. Lucia and Grenada 23

24 EPS RECONCILIATION FINANCIAL RECONCILIATION: REPORTED TO ADJUSTED MEASURES Amounts in USD H H H Reported profit after taxation $8.8m $9.2m $9.4m Exceptional items $0.7m $0.7m $1.5m Tax adjustments $(0.2)m $(0.1)m $0.5m Adjusted profit after taxation $9.3m $9.8m $11.5m Amounts in USD H H H Operating profit $12.4m $12.6m $13.6m Depreciation and amortisation $2.2m $1.9m $1.6m EBITDA $14.7m $14.6m $15.2m Acquisition and other one-off costs $0.7m $0.7m $1.5m Adjusted EBITDA $15.4m $15.3m $16.7m 24