Dalata Hotel Group PLC (DAL,DHG) Dalata Hotel Group PLC: 2021 Half Year Report 01-Sep-2021 / 07:00 GMT/BST Dissemination of a Regulatory Announcement, transmitted by EQS Group. The issuer is solely responsible for the content of this announcement.

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Emerging Strong as Recovery Commences

Occupancy levels improving month on month

Dermot Crowley to assume role of CEO on 31 October

ISE: DHG LSE: DAL

Dublin and London | 1 September 2021: Dalata Hotel Group plc ("Dalata" or the "Group"), the largest hotel operator in Ireland with a growing presence in the United Kingdom, announces its results for the six month period ended 30 June 2021. 


Results Summary 
                                        H1 2021 H1 2020 Variance 
EURmillion 
Revenue                                 39.6    80.8    (51.0%) 
Segments EBITDAR1                       6.7     15.6    (57.1%) 
Adjusted EBITDA1                        1.4     10.1    (85.8%) 
Loss before tax                         (37.8)  (70.9)  46.6% 
Basic loss per share (cents)            (13.6)  (34.0)  60.0% 
Adjusted basic loss per share1 (cents)  (14.5)  (13.1)  (10.7%) 
 
Group key performance indicators        H1 2021 H1 2020 Variance 
Occupancy %                             19.9%   34.3% 
Average room rate1 (EUR)                  81.99   95.28   (13.9%) 
RevPAR1 (EUR)                             16.28   32.69   (50.2%)

PROTECTING OUR PEOPLE, CASH AND BUSINESS

-- Hotels now fully re-opened having remained operational for essential services throughout the period inline with government restrictions

-- Positive Adjusted EBITDA of EUR1.4 million driven by strong operational management

-- Cash outflow2 of EUR24 million for the first six months

-- Proactive working capital management and government support schemes allowed us to protect employmentwithin the Group and preserve cash during periods of low occupancies

-- Maintained engagement with our employees enabling the business to effectively ramp up with an engagedworkforce as economies re-open

WELL-POSITIONED FOR THE RECOVERY

-- Increasing demand for staycations since hotels fully re-opened for leisure in May (UK) and June (ROI)

-- Group occupancy3 of 44% in June 2021 - increasing to 58% in July and 68% in August

-- Strong customer satisfaction scores since re-opening

STRONG BALANCE SHEET PROVIDES SECURITY, FLEXIBILITY AND THE ENGINE FOR FUTURE GROWTH

-- Robust balance sheet backed by EUR1.2 billion in property, plant and equipment (no significant change toproperty valuations since 31 December 2020)

-- Liquidity remains strong with cash and undrawn committed debt facilities of EUR270 million at 30 June 2021

-- Gearing remains conservative with Net Debt to Value1 of 27% (31 December 2020: 23%)

REMAINING FOCUSED ON LONG-TERM GROWTH

-- Current pipeline of over 2,600 rooms in prime locations which will see UK footprint surpass Dublin by2025

-- Opening of new Maldron Hotel Glasgow City in August 2021; further six hotels on track to open by May 2022

-- Reputation with current and prospective landlords has been enhanced

STRATEGIC AND OPERATING HIGHLIGHTS

RE-OPENING DELIVERS STRONG RECOVERY

-- Dalata hotels have fully re-opened with trading improving markedly during the summer period. Our strategyto retain our core teams throughout the pandemic ensured a swift and smooth re-opening.

-- The Group earned positive Adjusted EBITDA despite hotels only open for essential services for themajority of the period. The impact of reduced trading was mitigated through pro-active cost control measures andthe utilisation of government supports.

-- Really encouraging occupancy for the Group of 44% in June, 58% in July and 68% in August as the recoverystarts to take hold across all our markets. Occupancies at our Dublin and London hotels will remain lower until thereturn of international travel and large events, but this has been partially offset by staycations.

RETENTION OF CORE TEAMS CRITICAL TO BUSINESS SUCCESS

-- We continued to stay in constant contact with our people through our employee app and providing learningand development opportunities with over 44,000 courses completed on Dalata Online during the first six months of2021. This ensured our people were well prepared and motivated when returning to work. This in turn allows uscontinue to provide our guests with the excellent Dalata experience they are accustomed to. Our hotels areachieving strong customer satisfaction scores since re-opening.

-- We have renewed the accreditation of our Dalata Keep Safe Programme with Bureau Veritas, a world leaderin Health and Safety testing, inspection and certification. This gives our guests, employees and suppliers thecomfort that we are operating our hotels safely in line with best practice health and safety protocols.

MAINTAINING STRONG CULTURE AND VALUES

-- The Board has appointed Dermot Crowley to succeed Pat McCann as CEO on 31 October 2021 following arigorous selection process. Dermot has played a key role in the development of the business since 2012 and iscommitted to continuing to grow the business and protecting and enhancing the Dalata culture.

-- Following Dermot's appointment as CEO, Carol Phelan was promoted to CFO. Since joining the business in2014, Carol has been key member of the management team developing the finance and treasury function post IPO.

-- The Board, through the Nomination committee, is continuing to address the question of Board composition.It is expected that a new non-executive director will be appointed before the end of 2021.

-- ESG performance remains a top priority for management. We have accelerated our ESG initiatives despitethe challenges from Covid-19 and are currently developing a 3-year ESG Strategy plan that will be launched by Q12022. Dalata achieved 36 gold and 8 silver awards with Green Tourism in 2021, representing significant progress onour 2019 scores.

GROWTH STRATEGY REMAINS COMPELLING

-- We opened our first hotel in Scotland, the 300-room Maldron Hotel Glasgow City in August. The hotelmanagement team is made up of existing Dalata employees who will ensure that the Dalata culture and operating modelare adopted from the outset.

-- We are excited to open a further six hotels in Bristol, Manchester, Glasgow and Dublin between Decemberthis year and May 2022, totalling over 1,500 rooms. We have started the construction of Maldron Hotel Shoreditch inLondon. The remaining pipeline of four hotels, including one hotel in Ireland and three in the UK, are at thepre-construction phase. Our Acquisitions and Development team are continuously looking at opportunities to add tothis pipeline.

-- Dalata's robust balance sheet, backed by EUR1.2 billion of hotel assets, and strong financial position withcash and undrawn committed debt facilities of EUR293 million at the end of August, ensures the Group iswell-positioned to avail of future opportunities for leases.

-- We remain confident that our enhanced reputation as a strong reliable covenant will provide us with anadvantage in securing new opportunities as we expand our pipeline in the future.

UpdatED LTIP performance condition

In line with guidance from the Investment Association, the Group deferred the finalisation of the performance condition target ranges in respect of the 2021 share awards granted on 3 March 2021, in light of the uncertainty concerning future market conditions due to the impact of Covid-19. The Group confirms that the performance condition measures and targets in respect of the 2021 share awards made on 3 March 2021 are as set out below: 


                                            Threshold     Maximum 
Performance condition             Weighting 
                                            (25% vesting) (100% vesting) 
TSRA                              50%       Median        Upper quartile 
Free cash flow per share (FCPS)B  50%       EUR0.35         EUR0.47

A Total shareholder return (TSR) is measured against a bespoke comparator group of 20 listed peer companies in the travel and leisure sector. For performance between the median and upper quartile, vesting is determined by assessing between which two ranked companies Dalata's TSR falls and calculating vesting on a linear basis between the two companies.

B Basic free cash flow per share (FCPS)1 achieved in the year ending 31 December 2023. The adoption of FCPS instead of EPS (as initially set out in the annual report) follows careful consideration of the needs of the business as it recovers from the disruption of the pandemic and continues the execution of its growth strategy. We intend to consult with shareholders on this and other matters concerning the implementation of remuneration policy later this year.

OUTLOOK

Following the full re-opening of the hospitality industry in May in the UK and June in Ireland, Covid-19 restrictions continue to be relaxed as the rollout of vaccines in both countries reaches an advanced stage with more than 60% of the entire population fully vaccinated in both countries. The UK has lifted many of the legal restrictions introduced to curb the spread of Covid-19. In Ireland non-essential international travel was permitted from 19 July but restrictions on large events remain in place. The Irish Government has published a road map on the easing of the remaining Covid-19 restrictions with most restrictions expected to be lifted by 22 October.

As expected, there was strong domestic demand for hotel stays once restrictions were lifted with occupancies improving month on month and hitting 68% in August. It is expected the improved trading environment will deliver an increase in earnings with Adjusted EBITDA for July and August projected to be approximately EUR24 million. In addition, the Group had combined cash resources and undrawn debt facilities of EUR293 million at the end of August 2021.

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September 01, 2021 02:00 ET (06:00 GMT)