Action Hotels PLC Pre Close Trading Update (0503H)
March 08 2018 - 1:00AM
UK Regulatory
TIDMAHCG
RNS Number : 0503H
Action Hotels PLC
08 March 2018
The information contained within this announcement is deemed by
the Company to constitute inside information stipulated under the
Market Abuse Regulation (EU) No. 596/2014. Upon the publication of
this announcement via the Regulatory Information Service, this
inside information is now considered to be in the public
domain.
Action Hotels plc
Pre close Trading update
Action Hotels plc ("Action Hotels", the "Group" or the
"Company"); a leading owner, developer, and asset manager of
branded three and four-star hotels in the Middle East and Australia
reports its trading update for the year ended 31 December 2017 as
well as the first two months of 2018.
The Board reports that it expects the results for the year ended
31 December 2017 to be broadly in line with market expectations in
respect of Revenue and adjusted EBITDA and anticipates delivering
in the region of US$58.3m and US$15.2m respectively. However, loss
before tax is expected to come in materially higher than expected
at approx. US$(12.2)m mainly due to not being able to capitalise
some of the interest costs in the year ended 31 December 2017 as
there were delays in two hotel openings, early repayment fees and a
higher than forecast depreciation charge as valuations have
increased. Whilst valuations are being finalised it also expects an
increase in the Net Asset Value for the year compared to that
reported for 2016 of US$195m.
As reported in the last report to the market dated 22 December
2017, the current economic climate in the Middle East remains
challenging with pressure on room rates and at the time of the
market update the Board took the decision to delay the opening of
two of its Middle Eastern hotels in Saudi Arabia. Since then the
Board has decided to only proceed with one of these hotel openings
being the Mercure Riyadh Hotel which is expected to open during
2019 in a prime location of Riyadh. The previously planned
leasehold hotel; Tulip Inn Jeddah, has been removed from the
development pipeline and will save anticipated capital costs of
circa. $6.4m, which the Board can reallocate to other projects that
are expected to deliver higher returns on capital employed.
2018 update
Trading for the first two months of 2018 has been encouraging
and underpins the Group's resilient business model. Current
revenues are 8.9% ahead of last year (6.4% on a like for like
basis; excluding the recently opened ibis Styles Bahrain) and
trading of the recently opened hotels in Sohar Oman and Brisbane
Australia are showing revenue growth year on year and good customer
feedback as they mature into their relative markets. The ibis
Styles Bahrain, opened in August 2017, is also showing a promising
start to trading and the two hotels in Kuwait continue to perform
well and combined are 12% ahead of last year revenue.
On the development pipeline, the Group's flagship hotel; the 347
room Novotel South Wharf, Melbourne, located at the City's new
Convention Centre is nearing completion and opening is expected in
April 2018, in good time for Melbourne events season. Early
bookings have been ahead of expectations; currently holding more
than AUD $3m in reservations.
Dividends
The Group is still in its development phase, and notwithstanding
this, dividends have been paid from the time of IPO. Moving
forward, the Board have carefully considered the best use of the
funds available to it and recognising both the need to continue to
utilise cash for development and the desire for certain investors
to continue to receive dividends will be recommending a significant
reduction in the final dividend for FY2017 as well as future
dividends. The final dividend for FY2017 will be declared at the
time the results are published in H1 2018.
For more information, contact:
Action Hotels PLC
Alain Debare, Chief Executive Tel: +44 (0)
Officer 20 7907 9663
Katie Shelton, Director
of Corporate Affairs
Zeus Capital plc (NOMAD
& Broker)
Dan Bate / Andrew Jones Tel: +44 (0) 16 1831
1512
Victoria Ayton Tel: +44 (0) 20 3829
5000
Notes to Editors
Action Hotels PLC
Action Hotels PLC is a leading owner, developer and asset
manager of branded three and four star hotels in the Middle East
and Australia. Established in 2005, Action Hotels currently has 13
completed hotels with 2,276 rooms in aggregate across the Middle
East and Australia, with further properties in development in both
regions.
More information is available at
http://www.actionhotels.com/
This information is provided by RNS
The company news service from the London Stock Exchange
END
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