Northampton Group Inc. (TSX VENTURE:NHG), an integrated Canadian hotelier, today reported its financial results for fiscal 2014's first quarter ended June 30, 2013. In the period, Northampton posted a quarter-over-quarter sales increase of 7.6% with much improved performance across the board: gross profit rising by 12.7%, admin costs down and cash flow up 51.1%.
"With this strong first quarter we are seeing the impact of an improved economy in both Canada and the US," said Vinod Patel, President and CEO of the Northampton Group. "Northampton is well-positioned to take advantage of any economic upturn, as our hotels are run carefully and economically. We are also benefitting from the successful launch in May 2012 of the aloft™ Vaughan Mills, which has added several points to our improved revenues and profits in this quarter. The Montreal airport and Oakville markets are still experiencing some challenges, with slight declines there, but I am happy to say that the rest of the portfolio posted gains."
According to industry analyst Pannell Kerr Forster Consulting (PKF), two of Northampton's major markets, Toronto and Montreal, may see improvements in revenue per available room (RevPAR) of up to 4.5% in calendar 2013, with average daily rates (ADRs) increasing more than 2.0% and occupancy up about 1.0% in both cities. They suggest that the Ottawa area, on the other hand, will see occupancies drop by about 3.0% with ADRs down 1.5% and RevPAR dropping as much as 4.0%. Since their earlier predictions for 2013 showed flat occupancy rates, we may see ADRs - a key measure for Northampton - strengthen further.
Highlights of the Quarter:
- In the three months, consolidated revenues rose 7.6% to $7,802,777, from $7,251,512 for the same period in the previous fiscal year;
- Cost of sales rose 3.0% in the quarter. Administrative expenses fell 4.2% quarter-over-quarter. Depreciation and finance costs in Q1 were $671,574 and $444,941 respectively, compared to $800,894 and $511,212 in the same quarter in fiscal 2013;
- Gross profit for the first quarter of fiscal 2014 rose 12.7% to $3,871,227 from $3,435,743 in the prior year;
- EBITDA (earnings before income taxes, interest, depreciation, and amortization) in the quarter ended June 30, 2013 increased 38.7% to $2,418,159 from $1,743,663 in the prior year;
- Net income for the first quarter rose 846.3% to $641,004 from $67,739 for the same quarter in fiscal 2013;
- Earnings per share in the quarter rose 846.3% to $0.025 per share compared to $0.003 in the same quarter of the previous year;
- Cash flow, or net income plus amortization, increased 51.1% in fiscal 2014's first quarter to $1,312,578 or $0.05 per share from $868,633 or $0.033 per share in the prior period;
- Same-hotel sales rose in most of Northampton's markets, with the exception of the Oakville and Montreal airport locations.
The following is a tabulated summary of Northampton's results from continuing operations:
|Three months ended June 30|
|Earnings per share||0.025||0.003||846.3|
|Cash flow per share||0.050||0.033||51.1|
Northampton Group Inc. is an integrated Canadian hotelier with ownership and management interests in 1,943 rooms in 16 hotels (including the new aloft Vaughan Mills hotel in Vaughan, Ontario) with a selective strategic development program in place. Focused on creating a solid return for all stakeholders, Northampton's proven, market-sensitive strategy is to acquire or build hotels that provide superior overnight accommodation in the mid-price market. Northampton has consistently excelled in this sector, offering services that exceed expectations.
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