Northampton Group Inc.

Northampton Group Inc.

February 26, 2007 10:15 ET

Northampton Group Inc.: Record Nine-Month Results Reflect Increased Ownership Share and Improved RevPAR

Dividend Approved for Shareholders of Record As At March 6, 2007

TORONTO, ONTARIO--(CCNMatthews - Feb. 26, 2007) - Northampton Group Inc. (TSX VENTURE:NHG)(TSX VENTURE:NHG.DB) announced today the results of its third quarter of fiscal 2007, ended December 31, 2006. Average daily rates (ADRs) were slightly improved, and a small drop in overall occupancy rates, typical for this quarter, resulted in a marginal increase in revenue per available room (RevPAR) across the portfolio in the nine-month period. Nonetheless, the inclusion of the results of an investee company (which became a subsidiary at the beginning of fiscal 2007) produced double-digit increases in revenues in both the third quarter and the nine months, and the Company posted a record high in consolidated revenues for the nine-month period.

Summary of financial results:

- For the third quarter, revenues increased 15.7% to $7.89 million; for the nine months, revenues were up 15.5% to a record $27.62 million;

- Operating expenses rose 19.5% in the quarter and 16.9% for the nine months, a result of slightly higher costs across the portfolio;

- EBITA increased by 3.8% to $1.71 million in the third quarter and 12.6% to $8.46 million for the first nine months of fiscal 2007;

- Although income from operations fell in the quarter, it rose 13.5% for the first nine months of fiscal 2007;

- Net income fell in the quarter to $108 thousand or $0.004 per share and was comparatively flat in the nine-month period at $1.98 million or $0.08 per share compared to the same periods in fiscal 2006; and

- Cash flow decreased in the quarter but rose 8.2% for the nine-month period.

Subsequent events:

- Northampton's Board of Directors has now approved the issue of the Company's annual dividend. At $0.02 per share, the dividend will be paid on March 21, 2007 to shareholders of record as of March 6, 2007. This dividend, customarily issued in the fall of each year, was held back in 2006 as a result of Northampton's decision to become a real estate investment trust (REIT). The Board decided to issue the dividend at this time because that move has not yet occurred (as discussed further below).

With the increase in ownership of the Holiday Inn Express Hamilton and the Country Inn Oakville through the purchase of an existing investee company, the results of these two hotels are now consolidated, contributing directly to the top line. The addition of the results of these two hotels in the Company's revenues offset a flat performance in a traditionally slow quarter, which was also negatively affected by continued slow tourism from the United States. As well, according to industry consultants, Colliers, two of Northampton's major markets, Toronto Airport and Montreal Airport, experienced the highest supply growth in the country through 2005 and 2006, which served to flatten occupancy slightly. Overall, system performance in the quarter generally matched those of equivalent properties, and in the nine months Northampton's performance was slightly ahead of industry averages.

The Company continues to await definitive commentary and analysis from its advisors with reference to the Ministry of Finance's planned changes to the taxation of certain flow-through entities in reference to its prospective reorganization as a real estate investment trust.

"With top-line double-digit increases and dramatically increased hotel values year-over-year, our results in both the quarter and the nine months are extremely encouraging," said Vinod Patel, president and CEO of Northampton Group. "We continue to see strong growth in the industry, and as a result we are aggressively looking for new properties, possible acquisitions, and consolidation opportunities. Our consistent goal is to build value in Northampton's portfolio, and see that value adequately reflected in our share price."

Northampton's third quarter and nine months ending December 31, 2006

The following is a summary of the company's results, posted in full on SEDAR:

Three months ended Nine months ended
December 31 December 31
2006 2005 % change 2006 2005 % change
Revenues 7,894,557 6,823,470 15.7 27,616,495 23,904,373 15.5
Net income 108,168 210,032 -48.5 1,976,940 1,870,296 5.7
EBITA 1,712,009 1,648,684 3.8 8,458,611 7,514,623 12.6
Cash flow 797,097 822,808 -3.1 3,969,008 3,669,413 8.2
share $0.00 $0.01 -48.5 $0.08 $0.08 0.0
Cash flow/
share $0.03 $0.03 -8.8 $0.16 $0.15 2.0
O/S 25,448,577 23,937,577 25,448,577 23,937,577

Northampton Group Inc. is one of Canada's top hoteliers, with ownership and management interests in 2,064 rooms in 16 hotels. Focused on creating the best return for all stakeholders, Northampton's proven, market-sensitive strategy is to acquire or build hotels that provide great value and superior accommodation. Northampton excels in this sector, offering services that exceed expectations while still posting industry-leading margins.

Shares Outstanding: 25,448,577

The Canadian Venture Exchange has neither approved nor disapproved the contents of this press release.

Contact Information

  • Northampton Group Inc.
    Vinod Patel
    President & CEO
    (905) 629-9992
    (905) 629-9636 (FAX)