ALH Hotels reported an increase in EBIT for FY17 with strong second half growth as we cycled a period of higher promotional activity in the prior year.
Sales for the year were $1.6 billion, an increase of 2.7% on the previous year with comparable sales increasing by 2.4%. Sales growth was driven by a strong result in Bars, Food and Accommodation.
Hotels gross margin increased by 25 bps largely due to an improvement in Bars margins from better trading terms and more effective promotional activity.
CODB as a percentage of sales decreased 96 bps on the prior year due to strong cost control and as we cycled the increased spending on promotional activities to drive increased hotel patronage in the prior year.
EBIT increased 11.7% on the previous year to $232.9 million.
|BEFORE SIGNIFICANT ITEMS1||FY17
|Gross margin||(%)||83.10||82.85||25 bps|
|Cost of doing business||(%)||68.10||69.06||(96) bps|
|EBIT to sales||(%)||15.00||13.79||121 bps|
n.c. Not comparable
n.m. Not meaningful
- There were no significant items recognised in FY17.
In FY16, total significant items of $4,013.7 million before tax ($2,627.8 million after tax attributable to equity holders of the parent entity) were recognised. Details of these costs have been provided in Note 1.4 of the Financial Report. Where noted, profit and loss items have been adjusted to reflect these significant items.
- In line with the classification of Petrol as a discontinued operation, the financial performance and operating metrics previously disclosed under ‘Australian Food and Petrol’ has been split to disclose Australian Food separately from Petrol in this announcement. Funds employed and ROFE have also been separately presented for Endeavour Drinks.
- Return on funds employed (ROFE) is calculated as EBIT before significant items for the previous 12 months as a percentage of average (opening, mid and closing) funds employed. This methodology has been adopted for FY17 and FY16. In previous reporting periods, ROFE was calculated as EBIT before significant items for the reporting period as a percentage of average (opening and closing) funds employed. Lease adjusted ROFE adjusts funds employed for the present value of future lease obligations and EBIT for the implied interest on those obligations.
- Growth for New Zealand Food is quoted in New Zealand dollars.
- Operating cash flow as a percentage of group net profit after tax before depreciation and amortisation.
- Group earnings before interest, tax, depreciation, amortisation and rent (EBITDAR) divided by rent and interest costs. Rent and interest costs include capitalised interest but exclude foreign exchange gains/losses and dividend income.
- The credit ratings referred to in this document have been issued by a credit rating agency which holds an Australian Financial Services Licence with an authorisation to issue credit ratings to wholesale clients only. The credit ratings in this document are published for the benefit of Woolworths Group’s debt providers.
2.7% from 2016
11.7% from 2016
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