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

Northampton Group Inc.

August 25, 2005 13:09 ET

Northampton's Q1 Results Reflect Improving Sector

TORONTO, ONTARIO--(CCNMatthews - Aug. 25, 2005) - Northampton Group Inc. (TSX VENTURE:NHG)(TSX VENTURE:NHG.DB) announced today the results of its first quarter of fiscal 2006, ended June 30, 2005. Overall, the company marginally outperformed in all of its markets.

Revenues from operations during the three-month period ended June 30, 2005 increased by 3.9% to $7,872,549 from $7,577,597 in the prior year, a slightly higher gain than the 3.0% growth predicted by industry experts Pannell Kerr Forster. This change reflects the industry's gradual and ongoing recovery from the downturn that began in calendar 2002 and continued as a result of SARS in the Greater Toronto Area (GTA) as well as the Iraq War.

The GTA - West region reported the most improvement, whilst the Montreal area saw lower revenues compared to last year. Generally, Northampton's hotels reflected their respective environments.

System revenues (the sum of all Northampton revenues plus all revenues reported by investee companies, co-owners, and limited partnerships) increased 5.2% to $15,035,956 in the three months ended June 30, 2005 from $14,293,083 in the corresponding period in fiscal 2005, with RevPAR (revenue per available room) improving by 4.6%. This increase reflects the continuing improvement at a majority of the Company's hotels, especially those located in the GTA - West.

Total expenses for the three months ending June 30, 2005 were $6,505,986, up 4.6% from $6,219,255 in the corresponding period in the previous year. Operating expenses increased by $328,530 or 6.7% to $5,240,667 in the first quarter of fiscal 2006 from $4,912,137 for the same quarter in the previous year. Generally, the improving revenue line contributed proportionately to the increases in variable expenses; however, salary and benefits costs as well as realty taxes and utilities rose disproportionately.

Northampton's operating margins fell to 33.4% compared to 35.2% in the previous year as a result of the cost increases mentioned above.

Operating profit, or EBITA (earnings before interest, income taxes, and amortization), decreased 1.3% to $2,631,882 in the current quarter, down from $2,665,460 in the corresponding period in the previous year.

Net income for the current quarter rose 13.2% to $691,055 or $0.033 per share from $610,476 or $0.029 per share in the corresponding quarter of fiscal 2005.

The improving industry environment has resulted in cash flow increasing 5.8% in the quarter to $1,262,799 or $0.061 per share, up from $1,193,400 or $0.057 per share in the first quarter of fiscal 2005.

"Though the industry continues to face challenges, such as the rising Canadian dollar, energy prices and decrease in both corporate and leisure travel from the US, we are pleased with our results this quarter," said Vinod Patel, President and CEO of Northampton Group. "Our hotels' performances reflect both the improved industry environment and our careful financial management, and we have been able to bring proportionately more to the bottom line."

Northampton Group Inc. is an integrated Canadian hotelier 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 superior overnight accommodation in the mid-price market. Northampton has demonstrated that it excels in this sector, offering services that exceed expectations while still posting industry-leading margins, as evidenced by Hotelier Magazine's Top Growth award for Northampton's fiscal 2003 and 2004.



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

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Three months Three months Year-over-year
ended June 30, ended June 30, change
2005 2004
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Revenues $7,872,549 $7,577,597 3.9%
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Net income $691,055 $610,476 13.2%
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EBITA $2,631.882 $2,665,460 -1.3%
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Cash flow $1,262,799 $1,193,400 5.8%
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Earnings per share $0.033 $0.029 13.8%
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Cash flow per share $0.061 $0.057 5.8%
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Shares Outstanding: 23,937,577

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)
    www.nhgi.com