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IH

INNSUITES HOSPITALITY TRUST (IHT)·Q1 2018 Earnings Summary

Executive Summary

  • Q1 FY2018 revenue increased 14.1% year over year to $4.15M; diluted EPS was $(0.02) as IBC investment and higher depreciation offset revenue gains .
  • Adjusted EBITDA rose sharply: $0.44M (or ~$0.50M excluding tax effects), a 362% YoY increase, driven by higher room revenue and operating leverage in hotel operations .
  • Management introduced semiannual dividends of $0.01 per half-year (effectively doubling the annual rate) and expanded the repurchase program to up to 750,000 units—potential capital return catalysts .
  • Subsequent events and later quarters highlighted portfolio repositioning (Ontario sale completed June 2, 2017) and strong cash/liquidity, which supports near-term flexibility in operations and capital allocation .

What Went Well and What Went Wrong

What Went Well

  • Room revenue growth: Q1 FY2018 total revenue rose 14.1% YoY, with room revenues up ~14.7% on occupancy and ADR gains, notably in Yuma and Ontario refurbishments .
  • EBITDA momentum: “Adjusted EBITDA... increased 362%” for the quarter vs. prior year, as highlighted by management in the June press release .
  • Dividend and buyback: “initiated semiannual dividends... effectively doubling the prior annual dividend rate,” and “approved a 750,000 shares and partnership unit buyback program” .
    • Quote: “IHT declared a dividend of $0.01 per share… initiated semiannual dividends… effectively doubling the prior annual dividend rate” .
    • Quote: “the Board of Trustees approved… purchase of up to 750,000 Partnership units and/or Shares of Beneficial Interest” .

What Went Wrong

  • IBC losses expanded: IBC Developments operating loss widened as sales/marketing and technology investment ramped (Q1 IBC revenue $0.24M vs. operating loss $(0.31)M) .
  • Higher depreciation/interest: Depreciation rebounded after assets moved out of “held for sale”; interest expense also rose, pressuring net income .
  • NYSE compliance risk (Q1 context): Company received notice regarding equity thresholds, necessitating an Equity Enhancement Plan (addressed by subsequent actions, but a noted concern in Q1) .

Financial Results

MetricQ1 FY2018 (Apr 30, 2017)Q2 FY2018 (Jul 31, 2017)Q3 FY2018 (Oct 31, 2017)
Revenue ($USD)$4,152,184 $2,405,004 $2,720,110
Adjusted EBITDA ($USD)$438,661 $(1,095,002) $(198,393)
Consolidated Net Income (Loss) ($USD)$58,101 $9,499,179 $(826,828)
Diluted EPS ($USD)$(0.02) $0.96 (basic) $(0.08) (basic & diluted)

Notes:

  • The dramatic Q2 EPS/net income reflect the gain on sale of the Ontario property booked in discontinued operations; comparability to Q1 is limited .
  • Adjusted EBITDA figures reflect continuing operations adjustments as defined by the company .

Segment revenue breakdown (quarterly):

Segment Revenue ($USD)Q1 FY2018Q2 FY2018Q3 FY2018
Hotel Operations & Corporate Overhead$3,907,975 $2,101,334 $2,303,967
IBC (Developments/Hospitality)$244,209 $303,670 $416,143

KPIs (Q1 occupancy drivers):

KPIQ1 FY2017 (Apr 30, 2016)Q1 FY2018 (Apr 30, 2017)
Occupancy (%)79.97% 83.00%
ADR ($USD)$79.00 $88.25
RevPAR ($USD)$63.18 $73.25

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
DividendFY2018 onwardAnnual $0.01/share (effective prior annual rate) Semiannual $0.01/share each half-year (effective $0.02 annual) Raised
Share Repurchase AuthorizationFY2018Remaining ~54k units/shares authorized Expanded authorization up to 750,000 units/shares Raised
Revenue/Margins/OpEx/Tax RateFY2018Not providedNot providedMaintained (no formal guidance)

Earnings Call Themes & Trends

No earnings call transcript was available for Q1 FY2018. Themes derived from Q1–Q3 filings and press releases:

TopicPrevious Mentions (Q3 FY2018, Q2 FY2018)Current Period (Q1 FY2018)Trend
IBC/technology initiativesIBC network ~2,000 properties; expanding CRS, booking engine, loyalty, meta and digital services Plan to expand IBC (6,300 properties referenced historically; ramping sales/marketing and tech development) Accelerating investment (loss near term)
Hotel product performance (Yuma/Albuquerque/Tucson)ADR/Occupancy improvements; Tucson refinancing; capital program continuing Q1 occupancy up 3.03pts and ADR up 11.7%; REVPAR +15.9% YoY; Yuma and Ontario improvements cited Improving
Capital allocation (dividends/buybacks)Dividend declared Dec 2017; liquidity strong; buyback activity Instituted semiannual dividend and expanded buyback program in June 2017 More shareholder-friendly
NYSE listing complianceTwo consecutive quarters with equity >$6M; expects compliance regained Received NYSE MKT notice; adopted Equity Enhancement Plan Improving
Macro/competitionOngoing competition for corporate/leisure/government demand in operating markets Anticipate competition pressure on rates while maintaining share Ongoing headwind

Management Commentary

  • “IHT declared a dividend of $0.01 per share payable on July 31, 2017… initiated semiannual dividends… effectively doubling the prior annual dividend rate” (Press release, June 22, 2017) .
  • “Revenues… approximately 14% higher than the same quarter last fiscal year” and “Adjusted EBITDA increased 362%” (Press release, June 22, 2017) .
  • “We anticipate increased rate and occupancy levels to be steady during the rest of fiscal year 2018 due to slowly improving economic and travel industry conditions” (Q1 FY2018 MD&A) .
  • “We are planning significant expansion of IBC Hotels during the next several years… can provide no assurance that our plans will be successful” (Q1 FY2018 MD&A) .

Q&A Highlights

No Q1 FY2018 earnings call transcript or Q&A was published for IHT in the document set; management’s views are drawn from press releases and 10‑Q MD&A .

Estimates Context

  • Wall Street consensus (S&P Global) for Q1 FY2018 was unavailable for IHT; no EPS or revenue estimate comparison can be made. Attempts to retrieve S&P Global estimates encountered a request limit error; coverage appears limited for this microcap. Values would normally be retrieved from S&P Global consensus.

Key Takeaways for Investors

  • Near-term trading: Positive momentum in hotel operations (occupancy/ADR/RevPAR) and shareholder return actions (dividend, buyback) can be catalysts; thin coverage and microcap status may amplify moves on company-specific news .
  • Medium-term thesis: IBC remains a strategic growth lever but requires continued investment; expect near-term operating losses in IBC while hotel segment carries performance .
  • Portfolio repositioning improved liquidity and equity base (Ontario sale and refinancing), supporting flexibility in capex and potential further asset sales/restructuring .
  • Watch competitive dynamics in core markets (corporate/leisure/government demand) and utility/operating cost discipline as margin drivers .
  • With limited Street estimates and no call transcript, filings and press releases remain primary sources for monitoring performance and capital allocation .