All Leisure Group Share Discussion Threads

[doc robinson] 07/2/2013 16:57

all bodes well for results week monday!!

[blackbear] 07/2/2013 16:30

dam right but I'm holding steady.... could be good expectations here for the rise

[canteatvalue] 07/2/2013 13:22

Resisting the temptation to bank profits here, we have a long way to go to even make book value!

[doc robinson] 05/2/2013 07:47

when are the results ???

[bozzy_s] 30/1/2013 00:19

84 - fabulous summary Somerset Lad, thanks for posting.

[canteatvalue] 29/1/2013 21:27

I'm surprised forecasts for this year have been revised upwards given the company said they expect to only make a very small profit this year. I'd be very impressed if they can make that level of profits in the year just gone - I'm more focused on what they can do in the next few years.

[masurenguy] 29/1/2013 18:30

Share price is up by 28% over the past 48 hours on a trading volume of just 75,000 shares. To put that into some perspective that represents just about 1/10th of one percent of the shares in issue !

[somerset lad] 29/1/2013 18:30

Mesquida,

The forecasts are from the Stockopedia website.

[somerset lad] 29/1/2013 18:29

For anyone who might be interested, I've pasted my bull and bear points for ALLG below.

They're my notes, so sometimes a bit opaque; and I haven't updated all the data in them.

Disclosure: I have (for me) quite a big stake here and have increased it significantly over the last few months.

As always, DYOR.

Any comments would be very welcome.

BULL POINTS

(a) Profitable business, even in challenging conditions. 9 out of 10 passengers say they would travel again with ALLG.
(b) Net assets of £32.5m (with fleet in fact worth more than book value), well above the market cap.
(c) Investing for the future, upgrading its fleet with significant capex to add more balconies and improve customer experience, and to increase capacity (Summer 2012 capacity up 15%). Sensible long-term strategy: within cruising market overall, demand is growing and analysts following Carnival predict that demand will outpace supply. When the recovery comes, we can expect to see better performance than the last up cycle (EPS of 11.36 and 16.72 in 2006 and 2007 and share price of 190).
(d) Largely owned by managers and significant director buys at 42p in July 2010. Roger is 56 and will presumably eventually look for an exit, perhaps at the top of the next cycle, although potentially later.
(e) Big play on potential recovery in consumer markets.
a. As at Sep 2012, consumer confidence is at a 15 month high.
b. Sense of postponement ("we've not had a holiday abroad for a while so we're due one").
c. Poor UK summer supports spend on holidays abroad.
d. TUI travel 27.9.12: trading in line; bookings and prices up, with "differentiated products" performing better than the overall business [both cruising and P&M are "differentiated products"]
e. Thomas Cook 28.9.12: trading in line; booking trends in "Summer 12 lates" have been good; bookings are ahead of capacity and price trends are ahead.
(f) Priced as if retail cruising/holidays for >55s is a dying market but it's a growing one. Huge, huge upside if ALLG can sort out Page & Moy (and most recent indications are that it is returning to profit) and consumer markets recover. Press reports new Page & Moy CEO in June 2011 and restructuring ongoing for six months including exiting unprofitable lines with profits forecast per press at £2m (and, per 27.7.12 RNS, P&M expected to be earnings enhancing in year to 31.10.12). P&M CEO, Ian Smith, now CEO of ALLG.
(g) 26.11.12: P&M brands have "performed exceptionally well" and "made a better than expected contribution to the bottom line"; acquisition "will deliver a strong contribution to the bottom line in future years". Further update on synergies (and cost benefits) due with finals by Feb 2013.
(h) 30.8.12: heads of terms for JV with Cruise and Maritime Voyages Ltd (a substantial operator, looking at its website) to jointly market mv Discovery from February 2013; CMV will operate it for 249 days following its return from dry dock; CMV will share some of the costs; will be targeted at value end. NB value end is very competitive; but shifting the focus to the value end broadens ALLG's addressable market and reduces the pressure on winning premium customers.

Bear points:

(a) 25.1.12: adjusted profit for 2011 was £0.67m, down from £3.54m (adjusting for derivatives and exceptionals, including insurance claim and damages award). This is a trailing EV/E of 17.6 which is expensive for a declining business.

(b) Acquisition of Page & Moy Travel Group (Travelsphere, Page & Moy and Just You) is risky:

a. It's large (turnover of £107.6m) and historically loss-making (£5.6m reported operating loss in year before acquisition).
b. But 27.7.l2: remains on target to deliver profit target and expected to be earnings enhancing for year to 31.10.12 (i.e. losses turned around). Profitability confirmed by 26.11.12 trading statement.
c. ALLG has experience in cruises and not in other holidays. It believes that the new P&M management will return it to profitability ("targeting" return to profitability this year; ALLG expects it to be earnings enhancing in the first full financial year i.e. to 31.10.13); bought by private equity for £180m in 2006, but vendors seem to have been HSBC and Credit Agricole, so it looks as though the banks foreclosed and aren't patient enough to wait for the new management to deliver.
d. ALLG has stopped paying dividends.
e. ALLG now has £5.8m debt at 7 per cent. interest, involving related party transactions; interest of 7 per cent. with repayments of 10 per cent of principal each year on 15 May for four years with the remaining 60 per cent. payable on 16 May 2017 (with mv Alexander von Humboldt as security).
f. ALLG expects "significant costs this year and next" to generate synergies (i.e. two years of reported exceptionals giving – potentially - IFRS losses).
g. 27.7.12: operating in line with expectations; but revenue and costs synergies will take 36 months to deliver in full with significant costs and further capex required.
h. But only £4.2m consideration with net current assets of £3.1m (i.e. distressed buy); scope for cross-selling; and ALLG knows the >55 consumer.
i. 26.11.12: performed "exceptionally well"; "strategic importance ... cannot be underestimated"

(c) 2012 outlook looks worse than 2011 for cruising.
a. Customer deposits as at 31.10.11 were £13.4m, compared with £19.1m in 2010.
b. Summer sales as at 25.1.12 were down 7 per cent., although capacity is up 15% and selling prices were up by 4% on Discovery [356 cabins] and 11% on Swan Hellenic [197 cabins].
c. As at 11.4.12: "sales have slowed considerably and have only been revived by significant discounting"; trading is "considerably more challenging this year than envisaged"; only a slow increase in Discover Egypt brand since Arab Spring. Mr Allard "insisted that the trading update was not a profit warning. 'It's too early to say that', he said." Currently hedges are at rates that are currently better than spot.
d. Winter losses will be higher this year because mv Minerva is out of service, although 11.4.12 "in line with budget" for winter trading.
e. £1.5m deposit payable for mv Minerva to reflect works by owner and £800k works on Hebridean Princess in Winter 2012.
f. Outlook statements were gloomy. 29.11.11 and 25.1.12 "Winter trading is extremely challenging" (although 11.4.12 "in line with budget"). Summer sales were up with load factors and revenues slightly ahead of last year (NB capacity up 15%), but fell away following the Costa Concordia disaster (see item (c)). Overall: "we are encountering many challenges as a result of geo-political events, difficult market conditions, inflation and the situation in the Eurozone." FT 22.1.12 reported leisure industry sales down 15 per cent. in first two weeks to January 13, compared with 2011. But outlook statement on 26.11.12 much more positive: continues to refer to significant trading headwinds but emphasises synergies from acquisition and the strategic importance of the acquisition.

(d) 11.4.12: "Bearing in mind the increasing overheads and the Board's duty to maximise returns for the Group's shareholders, it is in the process of carrying out a full review of its cost base." Mr Allard "played down the likelihood of job losses, adding 'As Lord King once said: 'Overheads are like grass growing under your feet. Now and again you have to get the mower out to give it a trim.'"

(e) 27.7.12: cruising results will be "below expectations"; H1 operating loss of £11.4m (up from £4.4m), as only one vessel operated for the whole of the winter period; remaining 2012 capacity only 72% sold (86% last year) and at lower yields (because of Costa Concordia) and higher costs (because of oil).

[mesquida] 29/1/2013 18:20

Somerset lad - where did you get those forecasts from - if they can be believed then the share price is still far too cheap.

[somerset lad] 29/1/2013 18:16

The price rise is presumably because the forecast EPS for the year to 31.10.12 has been raised to 5.23p (+1.81p) and for the year to 31.10.13 has been raised to 9.77p (+1.13p).

I assume that the historic forecast has been based on discussions with ALLG and is therefore "firm".

In my view, this improving performance reflects:

(a) an upturn in consumer confidence -- the target market is generally not very leveraged and so the decision to spend is a question of attitude, rather than clearing debts; and

(b) the fact that the P&M deal was an absolute steal - £4.2m for a business that the management had almost turned around and had been sold for £180m in 2006.

[doc robinson] 29/1/2013 17:25

when our resullts out ?? i heard it was early feb

[canteatvalue] 29/1/2013 16:40

Weeeeeeeee :)

[diku] 29/1/2013 15:57

Somebody just paid 33p....probably on a T20....

[diku] 28/1/2013 16:58

For this stock minimal volume is normal...those in the know of some sort of info....

[masurenguy] 28/1/2013 16:30

Hmmm.....up on minimal trading volumes !

[diku] 28/1/2013 15:46

Something going on here...This is making a late move up....

[doc robinson] 17/1/2013 16:34

will this mirror thomas cook????

[nfs] 02/1/2013 08:29

Hong Kong after shanghai....warm and sunny here,in case you wondered

[diku] 01/1/2013 21:57

You in a celebration mood very early morning or in a different part of the world?...

[nfs] 01/1/2013 04:41

Dozey1
Yes agreed ,surely it should be cannot be overestimated?

[diku] 31/12/2012 16:05

Is that good or bad?....

[dozey1] 31/12/2012 15:50

I find it disquieting to read in the pre-close update "...The strategic importance of the acquisition of PMTG cannot be underestimated".

Doze (no holding)

[welsheagle] 01/12/2012 20:48

The 'singles' market is growing demographically, which are the holidays that 'Just you' provide.
This share looks to be recovering from rock bottom.