Northampton Group Inc.
TSX VENTURE : NHG
TSX VENTURE : NHG.DB

Northampton Group Inc.

February 22, 2012 08:00 ET

Northampton Posts 8.1% Sales Growth in Third Quarter

Profits Rise 74.4% Quarter-Over-Quarter

TORONTO, ONTARIO--(Marketwire - Feb. 22, 2012) - Northampton Group Inc. (TSX VENTURE:NHG)(TSX VENTURE:NHG.DB), an integrated Canadian hotelier, today reported fiscal 2012 results for the third quarter and nine months ended December 31, 2011. In the third quarter, Northampton posted a quarter-over-quarter sales increase of 8.1%; in the nine-month period sales increased by 3.2% period-over-period.

"While hotel financing, and construction financing in particular, remain challenging, Northampton has been able to capitalize on the improving economy to increase occupancy, rates, and revenue per available room (RevPAR), growing not only sales but profits," said Vinod Patel, President and CEO of the Northampton Group. "We are seeing a slight increase in travel, both business and leisure. We remain focused on controlling costs and supporting our hotels' customized marketing programs, as well as continuing to seek opportunities for both expansion and realization of our properties' intrinsic value. As well, the opening of our new Vaughan Mills aloft™ brand hotel, anticipated in the first half of 2012, is keenly awaited."

Highlights of the Quarter:

  • In the nine months, consolidated revenues rose 3.2% to $23,456,404 from $22,734,237 for the same period in the previous fiscal year; for the third quarter, revenues increased 8.1% to $7,204,920 from $6,667,077 in the same quarter in fiscal 2011;
  • Cost of sales rose 5.1% in the nine-month period and 6.9% in the quarter. Administrative expenses decreased 1.8% in the nine months and rose 5.6% in the quarter. Amortization and interest costs decreased 9.6% in the nine months and 7.3% in the quarter, primarily as a result of the pay-down of debt in late 2011;
  • Gross profit margin for the nine months declined slightly to 50.8% compared to 51.7% for the same period in the prior year and in the quarter improved slightly to 48.1% compared to 47.5% last year;
  • Operating profit in the nine months increased to $6,303,454, up 4.3% from $6,040,700 in the prior year. In the quarter, operating profit reached $1,555,063, up 14.3% from $1,361,098 last year;
  • EBITDA (earnings before income taxes, interest, depreciation, and amortization) in the nine months ended December 31, 2011 decreased 1.1% to $6,558,952 from $6,634,222 in the prior period, and increased 11.6% to $1,738,261 in the current quarter, up from $1,558,029 in the corresponding period in the previous year;
  • Net income for the nine months reached $1,329,517, up 1.9% from $1,304,209 in the same period in 2010. Net income for the quarter rose to $167,079, up 2.4% from $163,237 in the previous year;
  • Earnings per share in the nine months rose 1.9% to $0.051 per share compared to $0.05 in the same period in the previous year. In the quarter, earnings per share increased 2.4% to $0.006, the same figure as the third quarter of the previous fiscal year;
  • Cash flow, or net income plus amortization, increased 1.1% in the nine months to $3,327,897 or $0.128 per share. In the quarter, cash flow increased 5.2% to $878,625 or $0.034 per share;
  • Same-hotel sales rose in most of Northampton's markets.

While industry analysts Pannell Kerr Forster Consulting (PKF Canada) reported a slight average increase of 1.0% in occupancy nationally for 2011 versus 2010, in the nine-month period ended December 31, 2011, Northampton's occupancy increased by 1.9% period-over-period. Nationally, average daily rates (ADRs) declined by 0.6% in 2011 while Northampton's ADRs actually increased by 0.7%. PKF's analysis of 2011 RevPAR Canada-wide showed an improvement of 1.1% over 2010, while Ontario's RevPAR increased by 1.6% and Quebec's by 4.1% in calendar 2011, representing a comparatively stronger performance in Northampton's major markets. Northampton's own hotels posted an average RevPAR increase of 2.6% in the nine months.

PKF predicts marginal improvement in all three measures in Canada for calendar 2012.

The following is a tabulated summary of Northampton's results from continuing operations:

Three months ended
December 31
Nine months ended
December 31
2011 2010 %
change
2011 2010 %
change
Revenues 7,204,920 6,667,077 8.1 23,456,404 22,734,237 3.2
Gross profit 3,462,928 3,167,329 9.3 11,917,392 11,758,363 1.4
Pre-tax profit 500,189 222,405 124.9 2,967,189 2,661,714 11.5
Profit 358,189 205,405 74.4 2,045,289 1,980,314 3.3
Net income 167,079 163,237 2.4 1,329,517 1,304,209 1.9
Earnings per share 0.006 0.006 2.4 0.051 0.050 1.9
Cash flow 878,625 835,330 5.2 3,327,897 3,293,255 1.1
Cash flow per share 0.34 0.032 5.2 0.128 0.126 1.1
EBITDA 1,738,261 1,558,029 11.6 6,558,952 6,634,222 -1.1

For a more complete discussion of the Company's results, please see Northampton's quarterly filings on www.sedar.com, or the quarterly MD&A, financials, and notes to the financial statements on the Company's website at www.nhgi.com.

About Northampton

Northampton Group Inc. is an integrated Canadian hotelier with ownership and management interests in 2,002 rooms in 16 hotels, with a selective strategic development program in place. Focused on creating the best 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 while still posting industry-leading margins.

Disclaimer:

This news release contains forward-looking statements within the meaning of the "safe harbour" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties and other factors that may cause Northampton's results to differ materially from expectations. Such risks may relate to hotel performance, market fluctuations, investee performance, and other risks more fully described in the Company's annual report, posted on the Company's website and on SEDAR. These forward-looking statements speak only as of the date hereof. Northampton Group disclaims any intent or obligation to update these forward-looking statements.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Northampton Group Inc.
    Vinod Patel
    President and CEO
    905-629-9992
    www.nhgi.com