Northampton Group Inc.
TSX VENTURE : NHG

Northampton Group Inc.

November 28, 2013 16:54 ET

Northampton Second Quarter Revenues Up 4.8%

Demonstrates improvement in most hotels in its portfolio

TORONTO, ONTARIO--(Marketwired - Nov. 28, 2013) - Northampton Group Inc. (TSX VENTURE:NHG), an integrated Canadian hotelier, today reported its financial results for fiscal 2014's second quarter and first six months ended September 30, 2013. In the quarter, Northampton posted a sales increase of 4.8%; in the half, the sales increase reached 6.1%. Excluding the impact of the aloft™ Vaughan Mills (opened in May of 2012) and the Park Inn Montreal Airport (sold in August of 2012), the respective increases were 5.4% in the quarter and 6.5% in the six months. The portfolio experienced an improved performance at most properties, and gross profit rose by 3.7% in the quarter and 7.6% in the half.

"We continue to see the positive effects of a stronger economy in both Canada and the US," said Vinod Patel, President and CEO of the Northampton Group. "Northampton experienced an improved environment in all locations except Ottawa this quarter, and our hotels exceeded the average increases in occupancy and rates reported in their regions by industry analysts. The aloft™ Vaughan Mills is performing well, adding to our revenues. Our challenge is to hold the line on costs despite industry discounting and increased utility charges, particularly as we move into the less active part of our year."

According to industry analyst Pannell Kerr Forster Consulting (PKF), the GTA saw revenue per available room (RevPAR) increase by 3.3%, Quebec's RevPAR rose by 2.2%, and Ottawa's RevPAR decreased by 3.3%. This is in line with earlier predictions. They continue to suggest that occupancy rates will remain essentially flat nationally but rise by one point in Toronto and Montreal and fall by up to three points in Ottawa. This would tend to suggest that average daily rates may strengthen slightly.

Highlights of the Period:

  • In the three months, consolidated revenues rose 4.8% to $9,153,732, from $8,735,326 for the same period in the previous fiscal year; in the six months, revenues rose 6.1% to $16,956,509 from $15,986,838 in the same period in fiscal 2013;
  • Cost of sales rose 6.0% in the quarter and 4.6% in the half. Administrative expenses fell 12.2% quarter-over-quarter and 8.6% in the half. Depreciation and finance costs in Q2 were $689,047 and $433,451 respectively, compared to $727,239 and $489,574 in the same quarter in fiscal 2013. In the six months, depreciation and finance costs were $1,360,621 and $878,392 respectively, compared to $1,528,133 and $1,000,786 in the same period in the previous year;
  • Gross profit for the second quarter of fiscal 2014 rose 3.7% to $4,711,843 from $4,543,156 in the prior year. In the six months, gross profit rose 7.6% to $8,583,070 from $7,978,899 in the prior year;
  • EBITDA (earnings before income taxes, interest, depreciation, and amortization) in the quarter ended September 30, 2013 increased 31.0% to $3,094,412 from $2,361,788 in same quarter of the prior year. In the six months, EBITDA rose 34.3% to $5,512,571 from $4,105,451 in the prior year;
  • Net income for the second quarter rose 204.8% to $1,060,947 from $348,033 for the same quarter in fiscal 2013. Net income in the six months rose 309.3% to $1,701,951 from $415,772 in the equivalent period of the previous year;
  • Earnings per share in the second quarter rose 204.8% to $0.041 per share compared to $0.013 in the same quarter of the previous year. EPS in the six months rose 309.3% to $0.065 from $0.016 in the same period of fiscal 2013;
  • Cash flow, or net income plus amortization, increased 62.7% in fiscal 2014's second quarter to $1,749,994 or $0.067 per share from $1,075,272 or $0.041 per share in the prior period. In the six months, cash flow increased by 57.5% to $3,062,572 or $0.117 per share from $1,943,905 or $0.075 per share in the same period of fiscal 2013;
  • Same-hotel sales rose in most of Northampton's markets.

Northampton today announced the payment of a dividend of $0.02 per common share payable to shareholders of record on December 9, 2013, to be disbursed on December 18, 2013.

Northampton is also pleased to announce the appointment of Mr. Walter Keyser to the Board. With an extensive background in the real estate sector and significant public-company experience, Mr. Keyser knows Northampton well, having previously served on its Board. We welcome him back and look forward to working with him.

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

Three months ended September 30 Six months ended September 30
2013 2012 % change 2013 2012 % change
Revenues 9,153,732 8,735,326 4.8 16,956,509 15,986,838 6.1
Gross profit 4,711,843 4,543,156 3.7 8,583,070 7,978,899 7.6
Pre-tax profit 1,971,914 1,144,975 72.2 3,273,558 1,576,532 107.6
Profit 1,497,614 744,875 101.1 2,466,158 960,732 156.7
Net income 1,060,947 348,033 204.8 1,701,951 415,772 309.3
Earnings per share 0.041 0.013 204.8 0.065 0.016 309.3
Cash flow 1,749,994 1,075,272 62.7 3,062,572 1,943,905 57.5
Cash flow per share 0.067 0.041 62.7 0.117 0.075 57.5
EBITDA 3,094,412 2,361,788 31.0 5,512,571 4,105,451 34.3

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 (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.

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