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Park Plaza Hotels swing to 2009 FY pre-tax loss
Park Plaza Hotels Limited today reported the it's revenue for FY ended December 31st 2009 has fallen by €13 million to €80.3 million and that EBITDA had, as a result fallen €10 million to €16.2 million, swinging the business to a pre-tax loss. No dividend will be paid.
Whilst occupancy levels were mainatined year -on-year at 79% room rates were discounted, primarily as a result of market conditions. The reduction in EBITDA and finance income led to a loss before tax of €7.2 million (2008: profit of €7.9 million, including €6.5 million of negative goodwill and €2.3 of impairment charges giving an underlying profit before tax of €3.7 million).
The group "soft opened" it's large new apartment hotel in February in London, the Park Plaza Westminster Bridge apart-hotel. Conceived in the heady days of the property bubble, the idea was to sell apartments within the hotel to investors promising them a guaranteed 6% return. These apartments were sold off-plan in those fevered days, with investors trusting that they could get mortgage finance on the apartments when the time came to complete. How wrong they were. Today no lender regards these as security for a loan and investors are now being pursued by Marlbray, the subsidiary of PPH which is building and manageing the hotel.
854 of the 1,019 units at Park Plaza Westminster Bridge had been contracted to be sold as at 31 December 2009 (2008: 818) and the €55.5 million of deposits received in respect of those sales are held on the balance sheet as restricted deposits and are not included in the Group's €45.8 million liquid assets. As at 25 June 2010, the Company has served completion notices on 796 units, of which 360 units have been delivered to purchasers. The cash raised from the sale of units has been used to repay the Bank Hapoalim loan of which £157.0 million (€177.0 million) was outstanding as at 25 June 2010. The original facility amounted to £248.0 million (€279.0 million).
Net debt at 31 December 2009 was €403.9 million (2008: €282.3 million).
Boris Ivesha, Chief Executive Officer of Park Plaza said:
"The trading environment during 2009 was, as anticipated, impacted by the effects of the global economic slowdown. Nonetheless, Park Plaza Hotels performed in line with the Board's expectations. Occupancy levels were maintained across the portfolio and our London hotels continued to outperform their local market.
We do not anticipate any further significant deterioration in the trading environment across our markets and are expecting 2010 to present similar economic and trading conditions to those in 2009, characterised by low visibility and continued pressure on average room rates.
In the second half of 2010, we will remain focused on managing our operations efficiently, leveraging our strategic partnership with Carlson Hotels Worldwide and continuing to progress a number of development projects. Most notable amongst these is the Group's prestigious Park Plaza Westminster Bridge London hotel."
Whilst occupancy levels were mainatined year -on-year at 79% room rates were discounted, primarily as a result of market conditions. The reduction in EBITDA and finance income led to a loss before tax of €7.2 million (2008: profit of €7.9 million, including €6.5 million of negative goodwill and €2.3 of impairment charges giving an underlying profit before tax of €3.7 million).
The group "soft opened" it's large new apartment hotel in February in London, the Park Plaza Westminster Bridge apart-hotel. Conceived in the heady days of the property bubble, the idea was to sell apartments within the hotel to investors promising them a guaranteed 6% return. These apartments were sold off-plan in those fevered days, with investors trusting that they could get mortgage finance on the apartments when the time came to complete. How wrong they were. Today no lender regards these as security for a loan and investors are now being pursued by Marlbray, the subsidiary of PPH which is building and manageing the hotel.
854 of the 1,019 units at Park Plaza Westminster Bridge had been contracted to be sold as at 31 December 2009 (2008: 818) and the €55.5 million of deposits received in respect of those sales are held on the balance sheet as restricted deposits and are not included in the Group's €45.8 million liquid assets. As at 25 June 2010, the Company has served completion notices on 796 units, of which 360 units have been delivered to purchasers. The cash raised from the sale of units has been used to repay the Bank Hapoalim loan of which £157.0 million (€177.0 million) was outstanding as at 25 June 2010. The original facility amounted to £248.0 million (€279.0 million).
Net debt at 31 December 2009 was €403.9 million (2008: €282.3 million).
Boris Ivesha, Chief Executive Officer of Park Plaza said:
"The trading environment during 2009 was, as anticipated, impacted by the effects of the global economic slowdown. Nonetheless, Park Plaza Hotels performed in line with the Board's expectations. Occupancy levels were maintained across the portfolio and our London hotels continued to outperform their local market.
We do not anticipate any further significant deterioration in the trading environment across our markets and are expecting 2010 to present similar economic and trading conditions to those in 2009, characterised by low visibility and continued pressure on average room rates.
In the second half of 2010, we will remain focused on managing our operations efficiently, leveraging our strategic partnership with Carlson Hotels Worldwide and continuing to progress a number of development projects. Most notable amongst these is the Group's prestigious Park Plaza Westminster Bridge London hotel."
Tue, 29th Jun 2010