Half Year 2019 Results Delivering Performance and Growth
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Half Year 2019 Results Delivering Performance and Growth
Contents
Group Update slide 3
H1 2019 Financial Performance slide 7
Driving Portfolio Growth slide 16
Strategic Priorities slide 22
Outlook for Remainder of 2019 slide 24
Appendices slide 25
Impact of IFRS 16 slide 30
DISCLAIMER
The presentation contains forward-looking statements. These statements have been made by the Directors in good faith based on the
information available to them up to the time of their approval of this presentation.
Due to inherent uncertainties, including both economic and business risk factors underlying such forward-looking information, actual
results may differ materially from those expressed or implied by these forward-looking statements. The Directors undertake no
obligation to update any forward-looking statements contained in this presentation, whether as a result of new information, future
events or otherwise.
Half Year Results
30 June 2019
Slide | 2
Clayton Hotel Charlemont, Dublin Group Update Slide | 3
Track Record
Exceptional Growth, Asset Backed & Appropriate Gearing
Exceptional growth* Asset backed Net Debt to Adjusted EBITDA*
1,335
Adjusted EBITDA* €million
60
Hotel assets €million
51 1,117 2.8x
45 2.6x 2.5x
35 828
732 1.9x
24 583
2 24
* Pre IFRS 16
Growth Strategy
Exploit identified growth opportunity in the UK
Continue to seek suitable opportunities for new hotels in Dublin
Funding
Primarily leased model but also opportunistic acquisitions within gearing guidance
Half Year Results
30 June 2019
Slide | 4
Strong Financial Metrics – H1 2019
Post IFRS 16 Pre IFRS 16
H1 2019 Growth H1 2019 Growth
Revenue €201.9m +12.2% €201.9m +12.2%
EBITDAR margin 40.4% +40 bps 40.4% +40 bps
Adjusted EBITDA1 €73.4m +43.9% €60.3m +18.1%
Profit before tax €37.8m +6.7% €42.2m +19.3%
17.2 19.3
Adjusted basic EPS1 -3.4% +8.4%
cents cents
€45.1m in cash
Normalised Return
generated for Dividend per share
on Invested
investment, debt of 3.5 cent
Capital1
repayments and (+16.7%)
of 12.6%
dividends1
1 Refer to glossary at end of presentation
Half Year Results
30 June 2019
Slide | 5
Growing revenues and margins
Owned and leased hotels Share of revenue Share of EBITDA
23% 21%
11
16
12%
19% 58%
13 67%
9,0461 rooms at 30 June 2019
H1 2019 Dublin Regional Ireland United Kingdom
RevPAR growth -0.5% +0.3% +3.2%
Revenue growth +9.8% +7.5% +22.8%
EBITDAR margin 47.2% 24.5% 36.2%
Dalata rooms 4,478 1,867 2,445
1 Includes 256 rooms under management contracts which are not included in the region splits
Dublin Regional Ireland UK
Half Year Results
30 June 2019
Slide | 6
Maldron Hotel South Mall, Cork H1 2019 FINANCIAL PERFORMANCE Slide | 7
Group Profit or Loss
H1 2019 H1 2019 H1 Strong revenue growth of 12.2% with ‘like for like’ Group
Key Financials €million RevPAR up 0.7%
Post IFRS 16 Pre IFRS 16 20181
Revenue 201.9 201.9 180.0 Segments EBITDAR margin increased from 40.0% to 40.4%
Segments EBITDAR 81.5 81.5 72.1
Decrease in central costs due to a write back of a prior
Hotel rent (3.6) (16.6) (16.2) period insurance provision following a detailed review of
Central costs (3.7) (3.8) (4.4) claims history and timing of spend
Share-based payments Adjusting items to EBITDA includes a net gain on
(1.4) (1.4) (1.2)
expense revaluation of certain property assets €1.0m (H1 2018: net
Other income 0.6 0.6 0.7 loss of €1.6m) reduced by pre-opening costs
Adjusted EBITDA 73.4 60.3 51.0 Depreciation of PPE increased by €3.6m due to the
opening of five new “owned” hotels, the completion of
Adjusting items to EBITDA 0.8 0.8 (2.3)
four extensions and the ongoing refurbishment programme
Group EBITDA 74.2 61.1 48.7
Finance costs increased by €2.0m due to the additional
Depreciation of PPE (12.9) (12.9) (9.3) interest on the new debt drawn to fund the acquisition of
Depreciation of RoU assets (8.2) - - Clayton Hotel City of London and a reduction in
capitalised interest following the completion of the new
Finance costs (6.0) (6.0) (4.0) hotels
Interest on lease liabilities (9.3) - - ‘Like for like’ Group KPIs H1 2019 H1 2018
Profit before tax 37.8 42.2 35.4 Occupancy 81.3% 81.0%
Profit after tax 32.7 36.5 30.5 Average room rate (€) 107.82 107.39
Basic EPS (cent) 17.7 19.8 16.6 RevPAR (€) 87.62 87.00
Adjusted basic EPS (cent) 17.2 19.3 17.8
1 Prior period comparatives have been amended - refer
to glossary at end of presentation
Half Year Results
30 June 2019
Slide | 8
Market Review | Dublin
Savills Ireland forecast additional
STR Global forecast for Dublin
6,300 rooms from 2019 to 2021
2018 2019 2020 2021
2,000 Dublin
1,700 Actual Forecast Forecast Forecast
1,750
1,500 Occupancy 83.7% 82.4% 80.2% 79.4%
1,250 1,100 1,000
900 ARR 145.1 143.9 145.2 146.7
1,000 800
750 RevPAR 121.5 118.6 116.4 116.5
500 400
200
250 100 100 RevPAR %
7.1% (2.4%) (1.8%) 0.1%
Variance
-
Circa 900 2019 2020 2021 Source: STR Global August 2019
opened to
date in 2019 3/4 Star Budget Apartments
Total market size of circa 21,300 rooms
RevPAR for Dublin market declined by 1.4% in H1 2019 driven by a combination of the 4.5% VAT increase, new
supply per above and a reduction in the number of events in the city
July & August negatively impacted by (i) reduced number of events and (ii) the VAT increase
Outlook remains positive for market
Irish economy forecasted to continue strong growth per Central Bank: 2019 ~ 4.9%; 2020 ~ 4.1%
6% increase in passenger numbers at Dublin Airport in H1 2019
Strong visitor numbers – increase of 5.7% for Q1 2019 per CSO
Half Year Results
30 June 2019
Slide | 9
Dublin | Strong Growth in Revenues and Margins
30 June H1 2019 H1 2018
RevPAR Change Number of hotels2 16 15
Number of rooms 4,478 4,146
Dalata Market
-0.5% All figures €million H1 2019 H1 20183
Total revenue 117.7 107.2
-1.4%
EBITDAR 55.6 49.8
Source: Dalata and STR EBITDAR margin 47.2% 46.5%
Like for Like KPIs1 H1 2019 H1 2018
Large increase in revenue of 9.8% Occupancy 85.5% 85.4%
New hotels and extensions performing very Average room rate (€) 124.71 125.49
well RevPAR (€) 106.57 107.13
‘Like for like’ RevPAR change outperformed
1 KPIs exclude the new hotels which opened during 2018 (Maldron Hotel
Kevin Street and Clayton Hotel Charlemont) and the Tara Towers Hotel
the market which closed in September 2018. To achieve an accurate like for like
comparison we have also excluded (i) Clayton Hotel Dublin Airport and
Significant uplift in EBITDAR margin to Maldron Hotel Parnell Square due to the significant extensions completed
during 2018 (ii) Clayton Hotel Burlington Road due to the significant
47.2% refurbishment works ongoing at the hotel and (iii) Clayton Hotel Liffey
Valley due to the significant acquisition of rooms during the period July
2018 - June 2019
2 10 owned hotels and 6 leased hotels at 30 June 2019
3 Prior period comparatives and the KPIs calculated thereon have been
restated to exclude pre-opening costs as they are now presented as an
adjusting item to EBITDA. See glossary for more information.
Half Year Results
30 June 2019
Slide | 10Regional Ireland | Revenue and Margins Growing
RevPAR Change 30 June H1 2019 H1 2018
2.6%
0.3% Number of hotels2 13 12
-1.4% Number of rooms 1,867 1,706
-1.9%
-4.4%
All figures €million H1 2019 H1 20183
-11.6%
Cork Galway Limerick Total revenue 38.5 35.8
Dalata Market EBITDAR 9.4 8.6
Source: Dalata and Trending.ie
EBITDAR margin 24.5% 24.1%
Revenue up 7.5% Like for Like KPIs1 H1 2019 H1 2018
Maldron Hotel South Mall, Cork performing Occupancy 71.8% 71.7%
very well since opening in December 2018 Average room rate (€) 92.41 92.31
4.5% VAT increase has had a negative impact
RevPAR (€) 66.32 66.15
on Regional Ireland market
1 KPIs exclude the new Maldron Hotel South Mall which opened in
Dalata performing strongly versus market on December 2018 and Maldron Hotel Sandy Road which had a large
extension added during 2018
a ‘like for like’ basis 2 12 owned hotels and 1 leased hotel at 30 June 2019
3 Prior period comparatives and the KPIs calculated thereon have been
EBITDAR margin increased to 24.5% restated to exclude pre-opening costs as they are now presented as an
adjusting item to EBITDA. See glossary for more information.
Half Year Results
30 June 2019
Slide | 11Dalata’s Clear Competitive Advantage in UK
Large structural opportunity exists in the 3 & 4 star segments
Shortage of large Fragmented Older room Lack of investment in
hotel operators market stock employees
International brands Market is very fragmented in Over 40% of the rooms Difficult for smaller operators or
have evolved to a terms of brand, operators and are over 40 years old larger Third Party Operators (TPOs)
franchise model leaving owners to provide same level of training or
a shortage of operators opportunity due to lack of tenure
with any scale (TPOs) or scale (independent
operators)
The Difference with Dalata
Allows us to outperform in Regional UK
Financial
Quality of our resources & Depth of hotel
Location of our assets – ability to secure operational expertise
assets modern and fresh sites & resources
Focused on large UK New and recently refurbished Strong balance sheet Operate a decentralised model.
cities with strong mix of hotels can significantly with attractive covenant Strong focus on training &
corporate and leisure outperform the older and tired for developers & fixed development at all levels. Highly
guests. Less downside competition. Average age of income investors motivated management teams
risk compared to smaller our UK hotels is 10 years that are part of a large, growing
cities in regional UK hotel group
Half Year Results
30 June 2019
Slide | 12UK | Proving our UK Model
RevPAR Change 30 June H1 2019 H1 2018
Number of hotels2 11 9
London Manchester Birmingham Cardiff Leeds Belfast
7.6% 8.2% Number of rooms 2,445 1,968
5.0% 4.5% 4.5%
2.5%
1.1% 1.1%
All figures £million H1 2019 H1 20183
-0.8% Total revenue 39.9 32.5
-2.0%
-6.5% EBITDAR 14.4 12.0
EBITDAR margin 36.2% 36.8%
Dalata Market -15.4%
Source: Dalata and STR
Like for Like KPIs1 H1 2019 H1 2018
Occupancy 83.6% 83.1%
Total revenue up 22.8%
Average room rate (£) 82.45 80.38
New hotels in Belfast, London and Newcastle
performing to expectations RevPAR (£) 68.92 66.76
Significant RevPAR outperformance in most UK cities 1 KPIs exclude the new Maldron Hotel Belfast City and Maldron Hotel
Newcastle which opened in 2018 and Clayton Hotel City of London
EBITDAR margin decreased due to impact of new which opened in January 2019
2 8 owned hotels and 3 leased hotels at 30 June 2019
openings. ‘Like for like’ EBITDAR margin increased from 3 Prior period comparatives and the KPIs calculated thereon have
been restated to exclude pre-opening costs as they are now
37.6% to 38.4% presented as an adjusting item to EBITDA. See glossary for more
information.
Half Year Results
30 June 2019
Slide | 13Balance Sheet | Lowly Geared and Asset
Backed
30 June 2019 30 June 2019 31 Dec
All figures €million Strong balance sheet with an attractive
Post IFRS 16 Pre IFRS 16 2018
Non-current assets covenant to secure future leases.
Property, plant and
1,334.5 1,334.5 1,176.3
equipment
Over €1.3 billion of prime hotel assets
Right-of-use assets 338.8 - -
Further upward property revaluation
Other non-current assets1 52.6 78.2 82.4
of €46.3 million
Current assets
Pre IFRS 16 Net Debt to Adjusted
Trade and other
33.7 38.4 24.5 EBITDA of 2.8x (post IFRS 16: 4.3x)
receivables and inventory
Cash 45.9 45.9 35.9 Debt and Lease Service Cover3 of 3.1x
Total assets 1,805.5 1,497.0 1,319.1 Extended the maturity date of our
Equity 957.7 961.5 902.6 debt facility by 12 months – now
Bank loans 397.2 397.2 301.9 expiring October 2024
Lease liabilities 314.1 - -
Trade and other payables 75.6 77.2 65.2
Other liabilities2 60.9 61.1 49.4
Total equity and liabilities 1,805.5 1,497.0 1,319.1
1. Other assets includes intangible assets, goodwill, deferred tax assets, investment property, contract fulfilment costs and other receivables
2. Other liabilities includes deferred tax liabilities, derivatives, provision for liabilities and current tax liabilities
3. Refer to glossary at end of presentation
Half Year Results
30 June 2019
Slide | 14Strong Cash Flow to Fund Pipeline and
Further Growth
All figures €million H1 2019 H1 2018
Net cash from operating activities (excluding tax) 76.1 46.7
Tax paid (4.9) (3.4)
Fixed rent paid1 (12.8) -
Interest and finance costs paid (5.2) (4.7)
Refurbishment capital expenditure (8.1) (7.2)
Cash generated for investment, debt repayments and dividends 45.1 31.4
1Under IFRS 16, fixed rent is no longer included in operating activities, therefore we have included the amount paid as a separate item.
For the comparative period the fixed rent expense is included in net cash from operating activities.
In H1 2019 the Group generated €45.1 million which together with an increase in debt allowed us to
fund acquisitions and development while staying within our gearing limits
Proposed 2019 interim dividend of 3.5 cent per share
Refurbishment capital expenditure is calculated as 4% of revenue for the period
Half Year Results
30 June 2019
Slide | 15DRIVING PORTFOLIO GROWTH Slide | 16
Our Compelling Growth Story
5.8 times increase in 20 fold increase in Number of owned and
revenue in 5 years Basic EPS in 5 years leased rooms
Cent 12,000 11,189
million 19.8
20.0 8,790
201.9
€210 8,000
15.0
€140
10.0
4,000
2,236
€70 5.0
35.0
1.0
0
€0 0.0
H1 2014 H1 2019 FY 2022
H1 2014 H1 2019 H1 2014 H1 2019 Estimated
Pre IFRS 16
At Jan 2014 At June 2019
€5.0m €1.3bn growth in hotel assets €1.3bn*
Development Net revaluation uplift,
Acquisition of hotels and
expenditure, €319.0m
sites, €943.8m
€182.2 million 28% uplift
*Includes net additional decrease of €115.5m due to depreciation, disposals and foreign currency movements, partially offset by maintenance capex
Half Year Results
30 June 2019
Slide | 17Growth Momentum
Impact of new rooms on geographical mix
Opening 2,400 new rooms between now and 2022
June 2019 Early 2022
4,000
Number of new rooms
3,500
3,000 28%
39% 44%
2,500 51%
21%
2,000 17%
1,500
1,000 Dublin Regional Ireland UK
500
Impact of new rooms on ownership mix
0
2018 2019 2020 2021 2022 June 2019 Early 2022
2018
2019: 1 hotel in London 27%
2020: 1 Dublin hotel 39%
2021: 6 UK hotels in Glasgow (x2), Manchester (x2), Bristol & 61%
Birmingham. Extension to Clayton Hotel Birmingham. 1 73%
Dublin hotel
2022: 1 hotel in London. Extension to Clayton Hotel Cardiff
Lane, Dublin
Owned Leased
Half Year Results
30 June 2019
Slide | 18First Maldron Hotel in London
Acquired a site with planning approval for a new hotel for £32.05 million
Maldron Hotel Shoreditch London will have 130 to 140 rooms with a restaurant and bar
Total cost of developing the hotel will be circa £60 million including site cost
Site purchase funded by debt; development cost funded from operating cash flows
Expected to open early 2022
Excellent central location
on Paul Street in
Shoreditch.
Area benefits from strong
demand from corporate
and leisure guests and is
well-serviced by
transport links.
Half Year Results
30 June 2019
Slide | 19Creating Shareholder Value
Clayton Hotel Chiswick, London
February 2015 2015 - 2017 July 2018 –
June 2019
Acquired hotel as part of the Added extension with 92 bedrooms and conference and Occupancy of 86.4%
wider acquisition of the Moran banqueting facilities to accommodate 400 delegates. Revenue of £11.0m
Bewley's Hotel Group. Refurbished the ground floor with new restaurant, bar EBITDA of £5.2m
Original cost of £47 million and reception area. Total investment of £14 million.
£9.3 MILLION UPLIFT IN VALUATON SINCE ACQUISITION
Half Year Results
30 June 2019
Slide | 20Creating Shareholder Value
Maldron Hotel Kevin Street, Dublin
June 2016 July 2016 – July 2018 July 2018 – June 2019
Site purchased for €8.1m New 137 room hotel built Revenue of €7.2m
located in the centre of for €15m EBITDA of €3.5m
the city (€170k per room)
75% UPLIFT IN VALUE TO €40.7m
Half Year Results
30 June 2019
Slide | 21Maldron Hotel Newcastle STRATEGIC PRIORITIES Slide | 22
Strategic Priorities | Difference with Dalata
Driving shareholder returns
Our Customers Our Brands
Listening to their
Independent
feedback. Continuously
and fresh.
enhancing our product
and service.
Our Growth Our People
Continued growth Grow and trust your own.
of room
numbers in All new hotels opened by
Dublin and UK. internally developed
management teams.
Primarily leased Continuous focus on
model but also training and development
opportunistic at all levels.
acquisitions.
Half Year Results
30 June 2019
Slide | 23Outlook for Remainder of 2019
Very strong trade at our UK hotels in July and August. Positive outlook for the balance of the year despite
the ongoing uncertainty surrounding the timing and nature of Brexit
RevPAR in our Dublin hotels in July and August was behind last year primarily due to (i) weaker calendar
of events compared to 2018 and (ii) ongoing impact of the VAT increase
RevPAR in our Regional Ireland hotels was also behind last year in July and August primarily due to the
more significant impact of the VAT increase on domestic leisure demand than anticipated
Outlook for the balance of the year looks positive in both Dublin and Regional Ireland with a stronger
calendar of events and the return of corporate guests after the summer period. Some of our Dublin
hotels are forecasting September to deliver highest ever monthly room revenue for their properties
Very happy with the performance of the hotels opened and extensions completed in 2018 and early 2019.
They will continue to make a very significant contribution to earnings growth in the second half of the
year
Continue to work closely with developers and fixed income investors on opportunities to further increase
our very attractive pipeline in Dublin and the UK. Expect to make further announcements in 2019
Half Year Results
30 June 2019
Slide | 24Maldron Hotel South Mall, Cork APPENDICES Slide | 25
Current Pipeline – Circa 2,400 new rooms
Republic of Ireland UK
1 new owned hotel 6 new leased hotels
1 new leased hotel 1 new owned hotel
1 extension to existing hotel 1 extension to existing hotel
437 rooms 1,962 rooms
Owned Planning Construction Estimated
Property New Extension Rooms
or leased Granted started Completion
The Samuel* x Leased 204 x x Q4 2020
Maldron Hotel Merrion Road x Owned 140 x x Q1 2021
Dublin Clayton Hotel Cardiff Lane:
x Q3 2021
- New conference center x Owned 93
x Q2 2022
- Additional rooms**
Clayton Hotel Birmingham x Leased 44 x x Q1 2021
Maldron Hotel Glasgow* x Leased 301 x x Q1 2021
Clayton Hotel Bristol* x Leased 252 x x Q2 2021
Clayton Hotel Manchester* x Leased 329 x x Q2 2021
UK Clayton Hotel Glasgow* x Leased 300 x x Q2 2021
Maldron Hotel Manchester* x Leased 278 x Q3 2021
Maldron Hotel Birmingham* x Leased 325 x Q4 2021
Maldron Hotel Shoreditch
x Owned 133 x Q1 2022
London
*35 year operating lease
** Contingent on obtaining vacant possession
Half Year Results
30 June 2019
Slide | 26Adjusted EBITDA bridge
Dublin Regional Ireland UK
Rooms added
performance
performance
performance
Tara Towers
IFRS 16 Adj9
Like for like
Like for like
Like for like
New hotels2
New hotels7
renovation4
New Hotel5
Extension6
Hotel with
at existing
FX impact
H1 2019
closure
hotels3
Other8
H1 H1
€million pre IFRS
20181 2019
16
Revenue 180.0 8.2 6.0 (1.8) (1.6) (0.3) 2.6 0.4 (0.3) 7.3 0.3 1.1 - 201.9 - 201.9
Segments
72.1 3.6 3.6 (0.6) (1.1) 0.3 0.7 0.3 (0.2) 2.1 0.1 0.6 - 81.5 - 81.5
EBITDAR
Rent (16.2) - - - - 0.6 - - - (1.0) - - - (16.6) 13.0 (3.6)
Segments
55.9 3.6 3.6 (0.6) (1.1) 0.9 0.7 0.3 (0.2) 1.1 0.1 0.6 - 64.9 13.0 77.9
EBITDA
Other income 0.7 - - - - - - - - - - - (0.1) 0.6 - 0.6
Central costs (4.4) - - - - - - - - - - - 0.6 (3.8) 0.1 (3.7)
Share-based
payments (1.2) - - - - - - - - - - - (0.2) (1.4) - (1.4)
expense
Adjusted
51.0 3.6 3.6 (0.6) (1.1) 0.9 0.7 0.3 (0.2) 1.1 0.1 0.6 0.3 60.3 13.1 73.4
EBITDA
Segments
EBITDAR 40.0% 40.4% 40.4%
margin
1.Prior period comparatives have been restated to reflect (i) the reclassification of pre-opening costs from Segments EBITDAR to ‘Adjusting items to EBITDA’ following the decision
made in December 2018 to show pre-opening costs as an adjusting item as they distort comparability ‘period on period’ and with similar businesses and (ii) the reclass of income
from managed hotels from revenue to other income in the period ended 30 June 2019
2. Includes Maldron Hotel Kevin Street which opened in July 2018 and Clayton Hotel Charlemont which opened in November 2018
3. Includes Clayton Hotel Dublin Airport, Clayton Hotel Ballsbridge and Maldron Hotel Parnell Square where we completed extensions during 2018 and Clayton Hotel Liffey Valley
where we acquired 70 rooms since June 2018
4. Clayton Hotel Burlington Road is currently undergoing extensive renovation works
5. Maldron Hotel South Mall, Cork opened in December 2018
6. Maldron Hotel Sandy Road, Galway completed its extension in June 2018
7. Includes Maldron Hotel Belfast City which opened in March 2018, Maldron Hotel Newcastle which opened in December 2018 and Clayton Hotel City of London which opened in
January 2019
8. Group income and expenses includes income from management contracts, rental income, central costs and the share-based payments expense
9. Includes the impact of IFRS 16 where fixed rental expenses are now excluded from profit or loss and replaced with finance costs on the lease liabilities and depreciation of the
right-of-use assets
Half Year Results
30 June 2019
Slide | 27Market Review | Regional Ireland and
United Kingdom
Regional Ireland United Kingdom
RevPAR Growth 2017 2018 H1 2019 RevPAR Growth 2017 2018 H1 2019
Cork 13.6% 10.0% (4.4%) London 4.4% 3.1% 5.0%
Galway 7.6% 7.0% (11.6%) Manchester 0.9% (0.3%) 4.5%
Limerick 13.2% 3.8% 0.3% Birmingham 2.3% 5.0% 1.1%
Source: Trending.ie Cardiff 8.0% 0.9% (0.8%)
Leeds (0.7%) 0.6% 1.1%
Belfast 16.8% (6.3%) (15.4%)
Strong RevPAR growth in all three cities
Source: STR
in 2017 and 2018
Negative variances in H1 2019 driven by London performing strongly
a variety of factors Cardiff is impacted by less events in the city
No increases in supply and very little in 2019 versus 2018
supply in the immediate pipeline in Belfast is impacted by the significant
Galway and Limerick. Maldron Hotel increase in supply
South Mall opened in Cork in December Other regional cities performing relatively
2018 well
Half Year Results
30 June 2019
Slide | 28Hotel Portfolio at September 2019
30 owned 10 leased 9 new hotels 3 management
hotels with hotels with in pipeline agreements
6,406 rooms 2,384 rooms 2,399 rooms with 256 rooms
Clayton Hotel Portfolio in Ireland Maldron Hotel Portfolio in Ireland UK Hotel Portfolio
Owned Hotels / Freehold Equivalent Owned Hotels / Freehold Equivalent Owned Hotels / Freehold Equivalent
Hotel Rooms Hotel Rooms Hotel Rooms
Clayton Hotel Dublin Airport 608 Maldron Hotel Newlands Cross, Dublin 297 Clayton Hotel Manchester Airport (4) 365
Clayton Hotel Leopardstown, Dublin 357 Maldron Hotel Parnell Square, Dublin 182 Clayton Hotel Leeds 334
Clayton Hotel Ballsbridge, Dublin 335 Maldron Hotel Sandy Road, Galway 165 Maldron Hotel Belfast City 237
Clayton Hotel Liffey Valley, Dublin (1) 336 Maldron Hotel South Mall, Cork City 163 Clayton Hotel Chiswick, London 227
Clayton Hotel Cardiff Lane, Dublin (2) 304 Clayton Hotel City of London 212
Maldron Hotel Limerick 142
Clayton Hotel Cork City (3) 201 Clayton Hotel Belfast 170
Maldron Hotel Kevin Street, Dublin 137
Clayton Hotel Galway 195 Clayton Crown Hotel, London 152
Maldron Hotel Pearse Street, Dublin 119
Clayton Hotel Charlemont, Dublin 187 Maldron Hotel Derry 93
Maldron Hotel Wexford 108 Leased hotels
Clayton Hotel Sligo 162
Clayton Whites Hotel, Wexford 160 Maldron Hotel Shandon, Cork City 101 Maldron Hotel Newcastle 265
Clayton Hotel Limerick 158 Maldron Hotel Portlaoise 90 Clayton Hotel Cardiff, Wales 216
Clayton Hotel Silver Springs, Cork 109 Leased hotels Clayton Hotel Birmingham 174
Leased hotels Maldron Hotel Dublin Airport 251 Total UK rooms 2,445
Clayton Hotel Burlington Road, Dublin 502 Maldron Hotel Tallaght, Dublin 119 Pipeline
Ballsbridge Hotel, Dublin 400 Maldron Hotel Oranmore Galway 113 Owned
The Gibson Hotel, Dublin 252 Maldron Hotel Smithfield, Dublin 92 Maldron Hotel Merrion Road, Dublin 140
Total Clayton rooms in Ireland 4,266 Total Maldron rooms in Ireland 2,079 Extension at Clayton Hotel Cardiff Lane, Dublin 93
(1) Remaining 25 rooms owned by third parties Maldron Hotel Shoreditch London 133
(2) Dalata own 264 rooms and lease 40 rooms Leased
(3) Dalata own 194 rooms and lease 7 apartments Extension at Clayton Hotel Birmingham 44
(4) Effective ownership of hotel on 99 year lease Maldron Hotel, Birmingham 325
Clayton Hotel, Manchester 329
Maldron Hotel, Glasgow 301
Clayton Hotel, Glasgow 300
Maldron Hotel, Manchester 278
Clayton Hotel, Bristol 252
The Samuel, Dublin 204
Total pipeline rooms 2,399
Half Year Results
30 June 2019
Slide | 29Clayton Hotel Burlington Road, Dublin IMPACT OF IFRS 16 Slide | 30
Adoption of IFRS 16
Adoption of IFRS 16 resulting in:
Balance Sheet now includes right-of-use (RoU) assets and liabilities to pay rental expenses
Fixed rental expenses replaced with finance costs on the lease liabilities and depreciation of the
RoU assets
Dalata has adopted the modified retrospective approach and therefore have not restated prior period
comparatives
The Group’s weighted average discount rate is 6.03% - marginally higher than the discount rate of 5%
previously estimated
IFRS 16 is having no impact on our strategy, no impact on commercial negotiations for
leases and no impact on bank covenants as they are calculated based on frozen GAAP.
There will be a minor impact on cash flows due to the positive cash benefit from the
treatment of IFRS 16 by UK tax authorities.
Half Year Results
30 June 2019
Slide | 31Impact of IFRS 16 on Financials
Profit
Basic
after tax
EPS
P&L decreases
decreases
Adjusted by
Impact by
EBITDA €3.8
for H1 increases million
2.1 cent
2019 by €13.1
million
Balance Net Debt
Debt
RoU asset to
Sheet increases
of Adjusted
Impact at by
€338.8 EBITDA up
€314.1
30 June million
million from 2.8x
2019 to 4.3x
Half Year Results
30 June 2019
Slide | 32Lease profile
As the Group has entered into most of its leases relatively recently, there are significant unexpired terms.
This means the impact of front loading finance costs under IFRS 16 is more pronounced compared to
companies with a more mature lease portfolio.
Lease liabilities are 11.7x operating rent but this multiple is influenced by the Ballsbridge Hotel lease due
to its significant rental charge and short lease term. Excluding the Ballsbridge Hotel the multiple is 12.8x
Maturity profile of lease liabilities of €314.1m
€160m
€140m
Lease liabilities
€120m
€100m
€80m
€60m
€40m
€20m
€0m
0-5 6-10 11-15 16-20 21-25 26-30 30-35 > 35
Years to maturity
Half Year Results
30 June 2019
Slide | 33Unwind of existing lease liabilities and
existing RoU assets
The existing lease liabilities and existing RoU assets as at 30 June 2019 will unwind to profit or loss over
the next 5 years as follows:
€’million 2019 2020 2021 2022 2023
Interest on lease liabilities* 18.5 18.1 17.8 17.4 16.9
Depreciation of RoU assets* 16.5 15.1 14.6 14.6 14.5
* Note the actual depreciation and interest charge through profit or loss will depend on the
composition of the Group’s lease portfolio in future years and is subject to change driven by:
(i) commencement of new leases; (ii) modifications of existing leases; (iii) reassessments of
lease liabilities following periodic rent reviews; and (iv) impairments of right-of-use assets. See
note 13 to the condensed interim financial statements for the six month period ending 30 June
2019 for further information, including the split between Euro and GBP.
Half Year Results
30 June 2019
Slide | 34Impact of IFRS 16 on H1 2019
IFRS 16 Impact
H1 Include
Exclude H1 2019 Net
Key Financials H1 2019 depreciation of RoU Taxation
fixed reported IFRS 16
€million 2018 pre assets and interest impact
rent results impact
IFRS 16 on lease liabilities
Revenue 180.0 201.9 - - - 201.9 -
Segments EBITDAR 72.1 81.5 - - - 81.5 -
Rent (16.2) (16.6) 13.0 - - (3.6) 13.0
Other central income/costs1 (4.9) (4.6) 0.1 - - (4.5) 0.1
Adjusted EBITDA 51.0 60.3 13.1 - - 73.4 13.1
Adjusting items to EBITDA (2.3) 0.8 - - - 0.8 -
Group EBITDA 48.7 61.1 13.1 - - 74.2 13.1
Depreciation (9.3) (12.9) - (8.2) - (21.1) (8.2)
Net finance costs (4.0) (6.0) - (9.3) - (15.3) (9.3)
Profit before tax 35.4 42.2 13.1 (17.5) - 37.8 (4.4)
Profit after tax 30.5 36.5 13.1 (17.5) 0.6 32.7 (3.8)
1 Other income/costs includes central costs, share-based payments expense, rental income and management fees
Half Year Results
30 June 2019
Slide | 35Impact of IFRS 16 on gearing
at 30 June 2019
IFRS 16 Impact
Addition of Remove
30 June 2019 Pre IFRS 16 Post IFRS 16
lease debt rent
Net debt 355.1m 314.1m - 669.2m
Denominator: Earnings for the
128.8m - 26.0m 154.8m
period July 2018 – June 2019
Net Debt to Adjusted EBITDA 2.8x - - 4.3x
Debt and Lease Service Cover 3.1x - - 3.1x
IFRS 16 has no impact on our ability to pay rent and service our debt
Half Year Results
30 June 2019
Slide | 36Accounting for new leases – Sample lease
Sample UK Rental Opportunity with 300 rooms Over the lease term, the asset and liability will differ
CPI-linked rental uplifts in value
Lease term 35 years RoU asset depreciates evenly over the lease term
Lease liability decreases by the cash rental payments
Rental charge per annum £2.3m net of the interest charge (which reduces over time –
(payable quarterly in advance)
similar to a mortgage)
Hotel opening date Jan 2021 Sample lease assumes collar of 1% compounded
annual increase payable every 60 months
RoU asset on 1 Jan 2021 £35.8m Assumes no initial direct costs capitalised
Lease liability on 1 Jan 2021 £35.8m Depreciation of RoU asset in year one amounts to
£1.0 million and interest on the lease liability in year
UK discount rate 6.49% one amounts to £2.3 million
35 year lease with index linked rental reviews
£36m
£32m RoU Asset Lease Liability
£28m
£24m
£20m
£16m
£12m
£8m
£4m
£0m
Half Year Results
30 June 2019
Slide | 37P&L Impact of IFRS 16 – Sample lease
35 year lease with index linked rental reviews
£3.2m
£3.0m
£2.8m
£2.6m
£2.4m
£2.2m
£2.0m
£1.8m
£1.6m
£1.4m
£1.2m EPS
£1.0m enhancing
£0.8m at end of
lease
£0.6m
£0.4m
£0.2m
£0.0m
-£0.2m
-£0.4m EPS dilutive at beginning of lease Cross over point is 2041
-£0.6m 20 years into the lease
-£0.8m
-£1.0m
Depreciation Interest Rent PBT Effect (rent versus interest & depreciation)
Half Year Results
30 June 2019
Slide | 38Multiples will change over the sample
lease term
Lease liability: fixed rent charge
€36.0m 17.0x
€32.0m 15.0x
€28.0m 13.0x
€24.0m 11.0x
€20.0m 9.0x
€16.0m 7.0x
€12.0m 5.0x
€8.0m 3.0x
€4.0m 1.0x
€0.0m -1.0x
Lease Liability (LHS) Rent (LHS) Lease multiple (RHS)
Half Year Results
30 June 2019
Slide | 39Glossary
The pre IFRS 16 numbers and KPIs calculated thereon are prepared using the previous accounting treatment for
Pre IFRS 16 numbers leases (IAS 17) and are disclosed to provide more clarity to the reader on how the Group has performed in
comparison to the prior period.
EBITDA adjusted to show the underlying operating performance of the Group and excludes items which are not
Adjusted EBITDA reflective of normal trading activities or distort comparability either ‘period on period’ or with other similar
businesses. In H1 2019 the adjusting items include revaluation movements and hotel pre-opening expenses.
Adjusted basic earnings per
EPS excluding the tax adjusted effects of the adjusting items to EBITDA referred to above.
share (EPS)
Cash generated for Net cash from operating activities (after tax), less amounts paid for interest, finance costs and refurbishment capital
investment, debt expenditure. In H1 2019, fixed rent paid is also deducted as the amount is no longer reflected in net cash from
repayments and dividends operating activities.
Refurbishment capital The Group typically allocates 4% of annual revenue to refurbishment capital expenditure to ensure the portfolio
expenditure remains fresh for its customers and adheres to brand standards.
Net Debt to Adjusted EBITDA Loans and borrowings (gross of unamortised debt costs) less cash divided by Adjusted EBITDA.
Debt and Lease Service Cash generated for investment, debt repayments and dividends before rent, interest and finance costs divided by the
Cover total amount paid in rent, interest and finance costs on loans and borrowings.
Return on Invested Capital Adjusted EBIT including fixed rent divided by the average net assets, after deducting the accumulated revaluation
gains included in property, plant and equipment and adding back net debt, derivative financial instruments and
taxation related balances. The accounting estimate for right-of-use assets and lease liabilities are also excluded
from net assets.
Normalised Return on Adjusted EBIT excluding the results from recently completed hotels divided by the average invested capital excluding
Invested Capital the cost of assets under construction at period end and the cost of new hotels which only recently commenced
trading and have not yet reached full operating performance.
Prior period comparatives Prior period comparatives have been restated to reflect (i) the reclassification of hotel pre-opening costs from
Segments EBITDAR to ‘Adjusting items to EBITDA’ following the decision made in December 2018 to show pre-
opening costs as an adjusting item as they distort comparability ‘period on period’ and with similar businesses and
(ii) the reclassification of income from managed hotels from revenue to other income in the period ended 30 June
2019. Prior period KPIs for the period ended 30 June 2018 have been restated for these reclassifications.
For further information refer to the Supplementary Financial Information contained within the announcement of results for the six months ended 30 June 2019 which
provides definitions and reconciliations of our Alternative Performance Measures (“APM”) and other definitions.
Half Year Results
30 June 2019
Slide | 40You can also read
