TIDMEHG
RNS Number : 5114M
Elegant Hotels Group PLC
14 October 2016
This announcement contains inside information
14 October 2016
Elegant Hotels Group plc
Trading Update
New Management Contract in Antigua agreed in principle
Elegant Hotels Group plc ("Elegant Hotels", the "Company" or the
"Group"), the owner and operator of six upscale freehold hotels and
a beachfront restaurant on the island of Barbados, issues the
following trading update in relation to the year ended 30 September
2016.
Year to 30 September 2016
The Board is pleased to report that it expects that the Group's
full year results for FY16 will be in line with market
expectations.
Elegant Hotels announced in August that its recent acquisition,
Waves Hotel and Spa ("Waves"), is now open for business, having
been extensively redesigned and refurbished after it was bought by
the Group for US$18.0 million in March 2016. Early feedback from
both customers and travel agents has been positive and, as
expected, the property is already proving to be highly
complementary to the existing portfolio. The Board expects Waves to
be earnings enhancing for the Group in FY17, with excellent
potential for further improvement in FY18 and beyond as the
property develops its reputation.
The Company is also pleased to announce today that it has
reached an agreement in principle to bring a 123-room luxury hotel
in Antigua into Elegant Hotels' portfolio under a management
contract (the "New Management Contract"). The hotel is currently
under construction and is expected to open its doors in mid to late
2017. This will be Elegant Hotels' first property outside Barbados
and its first management contract, and it is expected to be
earnings enhancing in FY18. The Board believes that management
contracts of this kind represent a compelling opportunity to expand
beyond Barbados, given they require far less capital investment
than full ownership, and is therefore considering a number of other
similar targets.
The 193 rooms that will be added to Elegant Hotels' portfolio as
a result of the Waves acquisition and the New Management Contract
represent a 40% increase (from 483 to 676) since the Company's
admission to AIM in May 2015. The Board believes that the
longer-term benefits from these and future additions to the
portfolio justify the extra cost base that has been required to
gear the Company for growth. In order to support this continued
expansion, the head office team has been strengthened across the
areas of finance, operational management and marketing, which has
increased central costs in advance of revenues.
During the year, Elegant Hotels' continued focus on quality and
service has been reflected in the numerous awards that each of its
hotels has received. Most recently, Elegant won the best practices
of Sales and Marketing Award at the Caribbean Hotel Information
Exchange Forum. In addition, all of its properties apart from Waves
(which has only recently come under the Group's ownership) were
awarded TripAdvisor's coveted Certificate of Excellence for 2016,
as well as the prestigious Green Globe Certificate.
Dividend
As previously announced, the Board has declared - and the
Company has paid - an interim dividend for the period to 30
September 2016 of 3.5 pence per ordinary share. The Board intends
to follow this with a second dividend of 3.5 pence in February
2017, representing a total of 7.0 pence per ordinary share for the
year ended 30 September 2016.
Outlook
The Group is only 14 days into its new financial year and,
whilst it appears UK consumer confidence is returning, the
political uncertainties in the UK over the summer months are, it
believes, responsible for bookings for the current financial year
tracking slightly behind the same period last year. Given these
recent booking trends, the Board believes it is prudent to have a
cautious outlook, with Group revenue for the current year currently
expected to be broadly flat in comparison with FY16.
However, management believes that the Company's core strategy
remains robust and is taking action to respond to tighter market
forces, with further sales and marketing campaigns underway, and a
new website due to be launched in January 2017. In addition, the
continuing strength of Colony Club's performance after its recent
refurbishment illustrates the validity of the Group's core strategy
of refurbishing, repositioning and re-pricing its properties.
The overall level of net debt, supported by the Group's high
quality freehold assets, continues to be at a comfortable level.
This allows for a full capital expenditure programme in the current
year as part of the ongoing refurbishment strategy which, as has
proven to be the case at Colony Club, is expected to improve
bookings in the longer term.
The Company remains adequately resourced in the short to medium
term and, with the additions of Waves and the New Management
Contract and the anticipated delivery of these recent growth
measures, as well as the gradual return of UK consumer confidence
in the longer term, the Board believes it is well positioned to be
able to maintain the dividend in the future based on its current
estimates.
Sunil Chatrani, CEO of Elegant Hotels, said:
"While the underlying market conditions of the last few months
have undoubtedly been challenging, we are delighted to have
successfully launched Waves Hotel and Spa, our first acquisition
since IPO, and are looking forward to finalising the management
contract for our first hotel outside Barbados. Barbados remains a
beautiful place to visit, and we continue to be extremely fortunate
to have a peaceful, politically stable and exceptionally
tourist-friendly island on which to provide a high quality luxury
offering to our guests. As a result, and notwithstanding the
immediate headwinds that we face, we remain confident in the long
term growth prospects for Elegant Hotels."
For further information:
Elegant Hotels Group plc
Sunil Chatrani, Chief Executive
Officer
Richard Jones, Chief Financial
Officer +1 246 432 6414
Zeus Capital Limited (NOMAD and
Broker)
Dan Bate / Andrew Jones +44 (0) 203 829
Adam Pollock / John Goold 5000
Powerscourt
Rob Greening / Lisa Kavanagh +44 (0) 207 250
Email: eleganthotels@powerscourt-group.com 1446
NOTES TO EDITORS:
Elegant Hotels owns and operates six luxury hotels and a
beachfront restaurant, Daphne's, on the island of Barbados. The
Group's portfolio comprises 553 rooms, which represents around 29%
of Barbados' quality leisure tourist room stock. Five of the six
Group hotels, including the recent acquisition Waves Hotel &
Spa, are situated along the prestigious west coast of Barbados
commonly known as the "Platinum Coast". The properties are all
freehold, with a total aggregate plot size of approximately 22
acres and an aggregate beachfront of 2,500 feet. In the year ended
30 September 2015, the Group achieved revenues of $60.1 million and
EBITDA before non-recurring items of $22.2 million.
The Group's shares were admitted to trading on the London Stock
Exchange's AIM in May 2015. Its objective now is to leverage its
position as a leading hotel operator in Barbados and to expand both
on Barbados and further into the Caribbean.
Together, the Group's six hotels - Colony Club, Tamarind, The
House, Crystal Cove, Turtle Beach and Waves Hotel & Spa - offer
styles encompassing classic and contemporary, family-friendly and
adults-only.
Investor website: http://www.eleganthotelsgroup.com/
Commercial website: http://www.eleganthotels.com/
This information is provided by RNS
The company news service from the London Stock Exchange
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