Listed pub entity Redcape Hotel Group (ASX:RDC) has announced strong financial results for the half-year ended 31 December 2020, and a return to “full growth strategy” backed by a strong balance sheet.
Highlights for 1H21 included an increase in statutory net profit after tax (NPAT) of 45.9 per cent, compared with FY20, to $25.4m. This came in spite of increased COVID-19-related costs, amounting to approximately $3.1m for the period.
Distributable earnings are up 24.6 per cent, to $32.9m, aided by strong like-for-like revenue growth of 9.7 per cent. Operating EDITDA is up 5.7 per cent, to $40.9m.
In further good news for investors, RDC’s gearing has been reduced to 32.8 per cent, there is distribution of 3.66 cents per security, representing a yield of 7.9 per cent, and guidance on FY21 distributable earnings is 9.70 cps.
The six-month period reflected RDC’s renewed commitment to hotel acquisitions and “active portfolio management”, seen in sale of two large, “mature” pubs, and investment in the acquisition of four new properties where it sees growth opportunity. These were the Gladstone Hotel, Dulwich Hill and O’Donoghues in Emu Plains, and two Brisbane venues, the Shafston and Aspley Hotels, due to settle in 2H21.
Revenue for the period saw a strong gain in gaming performance, heralded last September in its FY21 Q1 results, lifting 8.1 per cent to represent 64.5 per cent of total earnings. On-premise figures fell (8.7pc) during the restricted trading period, while off-premise shot up 25.1 per cent to $30.4m, and 17.7 per cent of income.
RDC outlines a plan for “Strategic Growth Drivers” around the pillars of operations, customers, property, capital and leadership.
“We have been able to not just survive but thrive during 2020, which is reflected in our record first half performance,” says CEO Dan Brady.
“Our business is trading positively, demonstrating the resilience of our community and customer centric business model, strong operating platform and calm, deliberate and disciplined approach to returning to strategy.
“Our focus on customer engagement has resulted in increased revenue and reinstatement of distributions, showcasing our ability to run community pubs and drive a strong operating performance.
“Our lead indicators of staff satisfaction and customer NPS metrics are at record levels as we continue to invest in our people, empowering our teams to enrich their local communities through hospitality.”