Dalata Hotel Group has announced that it is expecting its earnings before interest, tax, depreciation and amortisation (EBITDA) for the year that will end on December 31, 2020, to be marginally ahead of market expectations as the company continues to place a strong focus on cost control and to avail of government support schemes, and that the company is in a strong financial position, with current cash and undrawn debt facilities of €293 million after deducting upcoming payments including quarterly rent and interest.
In a new trading update, Dalata stated that its occupancy levels in Dublin, regional Ireland and the UK during the third quarter of 2020 were 26%, 60% and 36%, respectively.
Dalata said that its Q4 occupancy levels in Dublin, regional Ireland and the UK are currently projected to be 17%, 28% and 21%, respectively.
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The company also said that following an amendment to its debt facilities agreement in July, the previous covenants comprising net debt to EBITDA and interest cover will not be tested again until June 2022, providing the company with further flexibility.
Dalata added that its outlook for 2021 is uncertain at present, with short lead time on bookings.
Dalata is continuing to progress a development pipeline of almost 3,250 rooms across Ireland and the UK. In the fourth quarter of 2020, the company completed a 44-bedroom extension of its Clayton Hotel Birmingham venue as well as a meeting and events centre at Dublin's Clayton Hotel Cardiff Lane.
Dalata's current development pipeline includes The Samuel Hotel in Dublin, which is currently projected to open in the summer of 2021; the construction of the Maldron Hotel Merrion Road in Dublin, which is currently scheduled for completion in the first quarter of 2022; the Maldron Hotel Glasgow, which is currently scheduled to open in the summer of 2021; the construction of the Clayton Hotel Manchester and the Clayton Hotel Bristol, which are both currently scheduled to open in the first quarter of 2022; and the construction of the Maldron Hotel Manchester and Clayton Hotel Glasgow, which are both currently scheduled to open in the second quarter of 2022.
Additionally, a planning decision is expected for the Maldron Hotel Croke Park in January of 2021, with development currently scheduled to commence in the second quarter of 2021 with a targeted opening date in the third quarter of 2023; Dalata has selected a design and build contractor for its new Maldron Hotel Shoreditch in London and expects to commence construction towards the end of the first quarter of 2021 with a projected opening date in mid-2023; the developers of the Maldron Hotel Birmingham and the Maldron Hotel Liverpool are planning to commence construction of the venues in mid-2021; and the Maldron Hotel Brighton and the Maldron Hotel Victoria in Manchester are continuing to progress through their respective planning processes.
However, Dalata noted that, due to uncertainty caused by the COVID-19 pandemic and the pandemic's impact on supply chains, there is more uncertainty than usual surrounding the opening dates of hotels in its development pipeline.
Deputy CEO - Business Development & Finance Statement
Datala Deputy CEO - business development and finance Dermot Crowley stated, "2020 has been a very challenging year for people and communities across the world. The impact on the hospitality industry has been acute. In Dalata, our people have suffered significant losses of income through temporary layoffs, reduced working hours and salary cuts. However, we remain resilient and united in dealing with the ongoing impact of COVID-19. We note the very positive news surrounding vaccines over the last month and look forward to 2021 with renewed optimism.
"Our central office and hotel management teams remain in place and are enthusiastically looking forward to rebuilding the business as we go through 2021. We look forward to welcoming those customers who have not been able to visit us this year.
"We have an exciting pipeline of hotels to open over the next three years. Despite the devastating impact of COVID-19, we announced three new hotels during 2020 in Dublin, Brighton and Manchester. We are working with developers and site owners around the UK on potential new developments. The positive impact of the recent equity placing on our balance sheet together with the way in which we have met our rental obligations throughout the pandemic has enhanced our reputation as a strong reliable covenant. We are confident that this will assist us greatly in building our pipeline further in 2021.
"We protected our liquidity as a priority over the last nine months through the strong relationships we enjoy with our stakeholders. In April, we completed a sale and leaseback of Clayton Hotel Charlemont in Dublin for €65 million with Deka Immobilien. In July, we increased our debt facilities with our banking club by €39 million, while in September, we raised €94.4 million from our shareholders through a share placing. The strength of our balance sheet, the retention of our teams and the quality of our hotel portfolio will give us a significant advantage as international travel recommences in 2021."
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