Northampton Group Inc.

TSX VENTURE : NHG


Northampton Group Inc.

November 20, 2012 16:01 ET

Northampton Q2 Sales Steady While Costs Rise

TORONTO, ONTARIO--(Marketwire - Nov. 20, 2012) - Northampton Group Inc. (TSX VENTURE:NHG), an integrated Canadian hotelier, today reported its financial results for fiscal 2013's second quarter and six months ended September 30, 2012. The company posted a 0.8% increase in sales for the six-month period, and an equal decrease in the quarter, reflecting the positive impact of the new aloft™ Vaughan Mills (from May, 2012) and the negative impact of the sale of the Park Inn Montreal Airport (in July, 2012) as well as a drop in revenue in several areas as a result of local market conditions.

Industry analysts, Pannell Kerr Forster Consulting (PKF), have confirmed that Canada's overall occupancy rates should rise very modestly in 2012 in Toronto and Montreal and drop slightly in Ottawa. Thus far in 2012, Northampton's major markets saw improvements in revenue per available room (RevPAR) of 0.5% in the Greater Toronto Area, 0.8% in Montreal, and 7.6% in Ottawa. Average daily rates in Northampton's markets are likely to remain on par with last year.

"Overall, we are cautiously pleased with our results this quarter," said Vinod Patel, president and CEO of Northampton Group. "Getting a new hotel up to speed always takes an injection of time and energy. Despite this, and despite the sale of one of our older hotels, we still posted a slight improvement in sales in the six months, and we will continue to control our expenses as the aloft Vaughan Mills ramps up. We also experienced non-cash charges with reference to a onetime expense for officers' and directors' stock-based compensation and a loss on sale of the Park Inn & Suites Montreal Airport as well as amortization related to the new hotel, which added to our expenses."

Highlights of the Quarter:

  • On July 23, 2012, paid down a corporate debenture of $2,000,000, bearing interest at 10%;
  • Consolidated revenues for the six months ended September 30, 2012 were up 0.8% to $16,387,967 from $16,251,484. For the three months ended September 30, 2012, consolidated revenues were off 0.8% to $8,930,460 from $9,001,539 a year ago;
  • For the six months ended September 30, 2012, the cost of sales was $8,201,156, up by 5.2% from $7,797,020 in the prior year. For the three months ended September 30, 2012, the cost of sales was $4,296,487, up 2.6% from $4,185,603 in the corresponding period in the prior year;
  • Gross profit for the six months ended September 30, 2012 was $8,186,811, off 3.2% from $8,454,464 in the prior period. Gross profit was off 3.8% in the quarter to $4,633,973 from $4,815,936 in the prior year;
  • For the six months ended September 30, 2012, earnings before income tax and amortization (EBITA) decreased 13.2% to $4,182,086 from $4,820,691 in the prior year. For the quarter ended September 30, 2012, EBITA was $2,401,128, down 15.3% from $2,835,988 in the corresponding period in the previous year;
  • Net income was $415,772 in the first six months of fiscal 2013, down from $1,162,438 for the same period in the previous year. Net income in the second quarter decreased to $348,033 from $822,667 for the same quarter in fiscal 2012. These drops reflect increased expenses, non-cash charges referred to above, and amortization costs related to the new aloft hotel;
  • Earnings per share in the six months were $0.016 per share compared to $0.045 in the same period in the previous year. In the quarter, earnings per share were $0.013 compared to $0.032 for the second quarter of the previous fiscal year;
  • Cash flow, or net profit plus amortization, in the six months was $1,978,676 or $0.076 per share, down from $2,449,272 or $0.094 per share in the previous year. In the quarter, cash flow was $1,093,863 or $0.042 per share, down from $1,494,488 or $0.057 per share in the same period in fiscal 2012.

Northampton today announced the payment of a dividend of $0.02 per common share payable to shareholders of record on December 4, 2012, to be disbursed on December 18, 2012.

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

Three months ended September 30 Six months ended September 30
2012 2011 % change 2012 2011 % change
Revenues 8,930,460 9,001,539 -0.8 16,387,967 16,251,484 0.8
Gross profit 4,633,973 4,815,936 -3.8 8,186,811 8,454,464 -3.2
Net income 348,033 822,667 -57.7 415,772 1,162,438 -64.2
Earnings per share 0.013 0.032 -57.7 0.016 0.045 -64.2
Cash flow 1,093,863 1,494,488 -26.8 1,978,676 2,449,272 -19.2
Cash flow per share 0.042 0.057 -26.8 0.076 0.094 -19.2
EBITDA 2,401,128 2,835,988 -15.3 4,182,086 4,820,691 -13.2

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 1,943 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