RESULTS PRESENTATION 2015

Transcription

1 RESULTS PRESENTATION 2015

2 ECONOMIC OVERVIEW DISSAPOINTING GLOBAL GROWTH Global economy showing sluggish growth at 0.1% to 2.6% in 2014 and 2.7% for Q Recent global market turmoil as a result of China economic slowdown and currency devaluation Commodity linked emerging markets have been particularly hard hit through global de-risking and evaporation of global carry trade 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% GDP Growth* F 2016F 2017F World High Income Developing * World Bank Forecasts July

3 ECONOMIC OVERVIEW OUTLOOK ON DOMESTIC ECONOMIC CONDITIONS GDP slowed to 1.5% in 2014; GDP growth flat for H Downside risks: Increased pressure on output and exports due to continued structural constraints Protracted structural challenges limiting growth capacity Rand depreciation and consequent inflationary effects versus contracting economic growth have brought into question the likelihood and timing of future interest rate hikes % 6.00% 4.00% 2.00% 4.3% 3.0% 3.2% 5.0% 5.7% 5.8% 6.1% 2.2% 2.2% 1.5% 4.8% 2.0% 1.8% 6.2% 2.4% 5.4% 0.00% e 2016e 2017e Real GDP CPI Source: Nedbank August

4 GLOBAL TOURISM GLOBAL TOURISM International tourist arrivals grew by 4.4% in 2014 (1,1billion) lead by strong growth in the Americas (+8%), Asia and the Pacific (+5%) and the Middle East (+5%) 4 International tourist receipts, strongly correlated to arrivals, grew by 3.7% to $1 245 billion Top long haul source markets in 2014 were USA, UK, China, Canada, Japan and Germany Arrivals to Africa grew by 2% to 56 million and are forecast to grow by 3% - 5% in 2015 European outbound travel is expected to rise 3% in 2015 MICE market share continues to rise as traditional business trip segment declines due to technological solutions 4

5 AFRICAN & SA HOTEL MARKET AFRICAN HOTEL MARKET Africa showed 2% increase in arrivals to 56 million while receipts showed growth at 3% to $36 billion Fear of Ebola outbreak in North Africa impacted arrivals to the entire African continent With African markets maturing, global hotel chains are shifting towards the multi-brand approach 5 SOUTH AFRICAN HOTEL MARKET SA tourism contributes 9.4% to GDP employing around 1,7 million people Domestic tourists down by 4% to 12 million (2014) contributing about 57% to total tourism expenditure New visa regulations and biometric requirements suggested to have caused 7% decline in foreign arrivals in Q

6 SA HOTEL PIPELINE SA HOTEL DEVELOPMENT PIPELINE SHORT TO MEDIUM TERM High-end hotels trading at a discount to replacement costs reducing supply risk Long-lead time needed to develop competitive products, up to 36 months Development Pipeline: Upscale: Radisson Residence CT (214 keys) The Houghton Hotel (143 keys of which 55 rentable) 6 Midscale: City Lodge Johannesburg CBD (148 keys) Radisson Red CT (V&A) (235 keys) SunSquare CT (200 keys) Economy: Road Lodge Pietermaritzburg (90 keys) CTICC Expansion StayEasy CT (300 keys) 6

7 RISKS FACING SA HOTEL MARKET Stringent visa requirements Deterioration of infrastructure Airline capacity issues Reduced government spending Labour unrest strikes 7 Security concerns Xenophobia Competition from unregulated accommodation businesses such as AirBnB Terror impact on African markets African disease outbreak such as Ebola 7

8 SA TOURISM MARKET SOUTH AFRICAN TOURISM MARKET International tourist arrivals showed meagre growth of 0.1% to 9,5 million in % 15.00% International Tourist Arrivals (growth %) 15.1% 10.00% 5.00% 0.00% 2.1% 5.7% -3.8% 3.8% 6.4% 4.6% 3.3% 4.0% 10.2% 5.0% 4.7% 4.4% 0.1% % Global South Africa Sources: Stats SA & UNWTO 8

9 SA TOURISM MARKET MAY 2014 APRIL 2015: SOURCE MARKET OVERSEAS ARRIVALS Immigration & Biometric requirements Sources: Stats SA 9

10 SA TOURISM MARKET MAY 2014 APRIL 2015: SOURCE MARKET OVERSEAS & AFRICA ARRIVALS Overseas Africa Sources: Stats SA 10

11 NOMINAL GDP & REVPAR GROWTH NOMINAL GDP AND REVPAR GROWTH RATES 40% ZAR depreciation % Change 30% 20% 10% FIFA World Cup % -10% -20% Global Recession Q1 GDP Growth RevPAR 11

12 12 12

13 THE YEAR IN REVIEW TRADING FIGURES OUTPERFORM THE OVERALL MARKET (JULY 2014 JUNE 2015) Occupancy HPF* vs STR ADR HPF* vs STR 80.0% R % 60.0% 61.4% 62.3% 62.0% 62.8% R R R R 992 R R % 40.0% 30.0% 20.0% 10.0% R 800 R 600 R 400 R % HPF'14 STR'14 HPF'15 STR'15 R 0 HPF'14 STR'14 HPF'15 STR'15 * HPF YE June 2015 data for traditional F&V and Variable hotels (i.e. excluding conference hotels) 13

14 THE YEAR IN REVIEW HPF S OCCUPANCY CYCLE* 80.0% 70.0% 60.0% 66.3% 66.0% 68.3% 55.6% 53.4% 51.4% 57.5% 60.1% 61.4% 62.0% Peak Occupancy 50.0% % 30.0% 20.0% 10.0% 0.0% * HPF YE June 2015 data for traditional F&V and Variable hotels excluding conference hotels. 14

15 THE YEAR IN REVIEW YEAR END 30 JUNE 2015 YE2014 YE2015 YE2014 YE2015 Gross Rental Income Net Asset Value per Linked Unit R 426 million 1.8% R 434 million cents 3.0% cents R 4,83 billion Portfolio Value 6.8% R 5,16 billion Distributable Debenture Interest R240 million -2.8% R 233 million 15 Weighted Average Cost of Debt 9.14% -0.2% 9.12% Total Debt R 1,77 billion 5.1% R1,86 billion Gearing (% of asset value) 36.7% -1.9% 36.0% Interest Cover Ratio 2.64x -7.2% 2.45x 15

16 THE YEAR IN REVIEW YEAR END 30 JUNE A Linked Unit Distribution 200 B Linked Unit Distribution c c c c c 18.08c 7.91c 13.15c % 10% 0% -10% -7% Y-on-Y Growth 19% 5% 5% 150% 100% 50% 0% -50% -87% Y-on-Y Growth 129% 83% -61% -20% -100% 16

17 THE YEAR IN REVIEW Q2 AND Q3 ARE THE STRONGEST PERFORMING MONTHS IN TERMS OF EBITDA EBITDA R million Q1 (Jul-Sep) Q2 (Oct-Dec) Q3 (Jan-Mar) Q4 (Apr-Jun) 17

18 THE YEAR IN REVIEW LEASE EXPIRY PROFILE (CY) WEIGHTED AVERAGE EXPIRY 12.1 YEARS Non-core Protea Hotel - The Winkler Sold Protea Hotel - The Richards Non-coreThe Bayshore Inn Under Offer Protea Hotel Imperial Non-core Protea Hotel Hazyview Sold Protea Hotel Hluhluwe & Safaris Under OfferPremier Hotel King David Holiday Inn Sandton - Rivonia Road Kopanong Hotel & Conference Centre Crowne Plaza Johannesburg - The Rosebank Inn on the Square Protea Hotel Edward Champagne Sports Resort Protea Hotel Marine Protea Hotel Richards Bay Arabella Hotel and Spa Birchwood Executive Hotel & OR Tambo Mount Grace Country House & Spa Protea Hotel Victoria Junction Radisson Blu Gautrain Hotel Radisson Blu Waterfront Westin Cape Town 18 Initial Period Option Period(s) 18

19 STRATEGIC PLAN DEBT MATURITY PROFILE AS AT 30 JUNE 2015 (R MILLION) Nedbank Secured Note Unsecured Note 19

20 PROPERTY PORTFOLIO CAPEX SPENT IN 2015 (R53 MILLION) Birchwood - Soft refurbishment of 167 rooms relaunched as The Silverbirch Hotel ; Capex spent: R20,7 million Mount Grace Country House & Spa - Development of a Mountain Bike and a Kids Club and Replacement of all thatched roofing across the resort; Capex spent R13,2 million Radisson Blu Gautrain Hotel - Refurbishment of the reception level including; Capex spent 20 R3 million Radisson Blu Waterfront - Refurbishment of public and reception areas including the conference rooms and business centre; Capex spent R9,0 million Westin Cape Town - Construction of outside swimming pool; Capex spent R7,3 million 20

21 PROPERTY PORTFOLIO ACQUISITIONS 25 additional units at Radisson Blu Waterfront (R76 million) 4 additional units and 25 parking bays at Radisson Blu Gautrain Hotel (R12,4 million) 35% undivided share in 215 rooms at Birchwood (R60 million) 21 Radisson Blu Waterfront 21

22 PROPERTY PORTFOLIO DISPOSALS Interests in 4 Courtyard properties (sold R80 million) PH The Richards (sold R46 million) PH Hluhluwe & Safaris (sold R14,5 million) Premier King David (under offer) PH Imperial (under offer) PH Richards Bay (under negotiation) Kopanong Hotel & Conference Centre (3 sold to date) Bayshore Inn PH Hluhluwe & Safaris 22 PH Hazyview PH The Winkler PH Imperial 22

23 MARKET OUTLOOK SA HOSPITALITY OUTLOOK Pessimistic market outlook driven by concerns relating to new visa regulations negatively affecting the foreign leisure and foreign business segments International source markets to continue to decline amid visa regulation crisis somewhat offset by weaker Rand Government conferencing rate ceiling expected to be relaxed in the next 12 months 23 Minimal occupancy growth expectation, RevPAR growth driven by inflationary rate growth SA hotel development pipeline focused on Cape Town, 4-5 new developments by 2018 Continued above inflation pressure on salaries & wages and utility costs Weaker Rand lead to South African leisure traveller to remain local 23

24 THE YEAR AHEAD Tough trading conditions to continue until the economy picks up Focus on: Driving revenues Operational efficiencies Value extraction Capital restructure 24 Tsogo potential transaction Issue of shares for property Conversion to single share class Mount Grace Country House & Spa Kids Club REIT conversion 24

25 DISTRIBUTION TIMEFRAME September S M T W T F S November S M T W T F S Last day to trade cum interest Linked units trade ex-interest Record date Payment date Annual general meeting 11 September 14 September 18 September 21 September 13 November 25

26 RESULTS PRESENTATION 2015