AX GROUP P.L.C.Annual Report and Consolidated and Separate Financial Statements for the year-ended 31 October 2023
Directors’ Report
The Directors present their annual report and the audited consolidated and separate financial statements (“the financial statements”) of AX Group p.l.c. (“the Company”) and its subsidiaries (collectively “the Group” or “AX Group”) for the year-ended 31 October 2023.
Principal activities
The AX Group is primarily engaged in four main business sectors namely, Care, Construction, Hospitality, Real Estate and Development and is also involved in renewable energy.
Performance review
The Company generated revenues of EUR31,270,094 (2022: EUR6,280,049). This included management fees of EUR1,646,994 (2022: EUR1,364,562), dividends received from subsidiaries of EUR29,498,155 (2022: EUR4,807,654) and rental income of EUR124,945 (2022: EUR107,833). Staff costs incurred amounted to EUR3,825,546 (2022: EUR EUR2,359,424) and operating costs amounted to EUR2,148,174 (2022: EUR760,507).
During 2023, the Company disposed of EUR3,037,000 of its holding of AX Real Estate p.l.c. debt instruments, incurring a realised loss of EUR595,700 (2022: EUR21,000). The remaining debt instruments held were remeasured at fair value at year end, resulting in a decrease in fair value of EUR637,955 (2022: EUR631,500).
Operating profit of the Company amounted to EUR23,124,711 (2022: EUR2,005,158).
During the current year, finance costs rose by EUR209,751, primarily driven by higher interest rates on intra-group loans. Simultaneously, finance income witnessed a surge of EUR663,608, largely attributable to comparable increases in interest rates on intra-group loans. Additionally, the full-year impact of interest on debt securities, acquired in 2022, contributed to this growth.
The profit for the year amounted to EUR19,868,672 (2022: EUR941,527).
Group
During the current year, the Group registered total revenue of EUR49,865,256 (2022: EUR38,269,722).
The primary growth was driven by the Hospitality division as revenues increased by EUR13.7 million when compared to last year. The Hospitality division has seen a significant rebound in business compared to last year. Tourism has regained its momentum and in the recent months, the industry has surpassed pre-COVID levels of activity. The Group's hotels have performed exceptionally well, notwithstanding AX ODYCY hotel being closed for most of the financial year and the Sliema and Valletta clusters surpassing their projected revenue and operating profits.
The AX ODYCY hotel had a soft opening in late May 2023. During the summer, the hotel operated at a reduced capacity as work on certain areas of the hotel and lido were still in progress. Despite these challenges, the hotel managed to exceed the budgeted rooms revenue in September and October 2023. In terms of customer reviews, the property has already received outstanding feedback on booking sites. All outlets and amenities, as well as the parking facilities, were opened by December 2023.
As we look ahead to the coming year, we anticipate that the unique attributes and offerings of the AX ODYCY and the Lido will continue to captivate and satisfy the preferences of our guests, cementing our position as a top-tier destination in the industry.
The Healthcare division registered an increase in revenue of 10.9% compared to the prior year. The independent apartments at Hilltop Gardens were fully occupied throughout the year while occupancy at the Care Home exhibited a steady increase. In addition, revenues from the Revive physiotherapy centre and the food and beverage facilities experienced an improvement when compared to last year.
The Construction division continued steadily working on the two main internal developments, the extension of the AX ODYCY hotel in Qawra including the Lido redevelopment and the redevelopment of Verdala site in Rabat. In addition, AX Construction generated EUR4.1 million (2022: EUR7,024,506) in revenue from third-party works. These include the restoration of the Oratories at the Jesuits Church in Valletta and construction work on the St. John Co-Cathedral Annex.