Action Hotels PLC (LON:AHCG) Chief Executive Officer Alain Debare caught up with DirectorsTalk for an exclusive interview to discuss their audited results for year-ending 31st December 2015
Q1: Now, strong year-end results out today for Action Hotels with some very positive key highlights, firstly Alain can we talk about the 92% increase in the number of rooms since IPO, was this increase planned at IPO or have market conditions played a part?
A1: We’ve got a very good increase as you mentioned with 92% increase in the number of rooms since IPO and this is really from the delivery of the pipeline that was announced at the IPO when we raised $50 million and that was in December 2013. So obviously at that time we started accelerating the pipeline and we’re now seeing the hotels open up, we’ve just done the opening of our tenth and largest hotel which is the Ibis Styles Brisbane Elizabeth Street which our Chairman opened on the 10th March and we got very good coverage over there and quite amazingly we’ve just closed the first month and broke even with an occupancy of 27% which is quite amazing for the first month. So that now takes us to 1,928 operational rooms and we are committed to another 6 hotels taking the room count to above 2,650 which should be happening over the next 18 months.
Q2: You have got a fully funded and committed pipeline so what can you tell me about that?
A2: The rooms that we currently have in the pipeline are rooms that are on track to be executed on time and on budget and the pipeline is fully funded and what we mean by that is that we have access to and have the required funds to do those hotels so that will take us to the 2,650 rooms. Obviously our ambition is to take it to 5,000 rooms by 2020 and we’ll be looking at how to fund this growth in due course.
Q3: Just back to those key highlights again, can you talk us through the growth in the financial metrics?
A3: As you’ve seen, good growth in all the key performance indicators so maybe starting with the revenue, the revenue is up 16% to $43.5 million and this is really the result of strong demand for mid-market hotels in the region in a market that remains massive under supplied. So we’ve got the right partnerships to the leading brand in the sector and we’re present in very strong locations and this is clearly driving the performance which is swinging the results. So the majority of hotels continue to perform strongly with an average of 79% occupancy and we’ve got 2 new hotels also contributing to that growth which is a 304 room Ibis Seef in Bahrain, which opened January last year, and the Premier Inn Sharjah, which opened in October last year.
Q4: Now, 2016 looks to be an exciting year for Action Hotels, what can you tell us about what’s planned for the remainder of the year and what investors should be looking out for?
A4: If I take you to the pipeline, we’ve just had a very positive first quarter, we have revenue up 14% on the same period last year so again the majority of hotels continue to do well, we’ve got a very strong mark in Kuwait trading at 89% and we’ve got good contribution from the hotels such as Premier Inn Sharjah and Ibis Bahrain which are now entering into their second year. 2016 is really key for us as we add 5 hotels so that will take us to more than 2,700 rooms by year-end, it’s an exciting year and it’s obviously key for us in the delivering of the programme.
