Peel Hotels Share Discussion Threads

[stevenlondon3] 06/10/2015 10:09

I would not want them to sell off the hotels piece meal ......there is more value selling them off as a collection. The debt in current market conditions is very managable. (Admittedly if the UK shortly enters a severe downturn then the debt would be more of a problem.) Always looking for the negatives...maybe the Peel brothers running amok in the wine cellars.

[bobthetrader] 05/10/2015 21:01

Des,

I'm not sure what the break-down of each hotel is with regards to profitability, but selling hotels to reduce debt would be an option, and possibly a good one for shareholders.

May be he has loyalty to his staff, as clearly this would mean many job losses.

Another reason perhaps is that by selling hotels suggests failure, ie. (being unable to improve it's performance). Also if a buyer was to consider a move for the company, then by holding on to each asset would transfer this option to the buyer.

Anyway let's hope we are all happy with the result in the short or long term.

All the best,

Rob.

[topvest] 05/10/2015 19:51

I think the strategy is gradual improvement. Modest dividend (maybe 2P this year), debt reduction and continuing CAPEX. The clock is ticking though. I suspect the fantastic owners of this business (the Peels) will want OUT well before the next recession given their age and the way they have kept the wheels on when others would have thrown in the towel. Gives them a MAX of 2/3 years in my book, maybe less. Selling one of the hotels to downsize the debt may also be tempting. We will have to wait and see.

They could find someone to invest in the business alongside them and take a non-exec role, but I'm not sure that's their style as they look like control freaks to me (in a nice way) - i.e. love running and controlling the show.

[deswalker] 05/10/2015 19:07

Bob,

I think everyone here would agree with your analysis. I doubt Robert Peel would even consider selling for anything less than 160p per share assuming his views haven't changed from June 2014 when he said as much to me.

I was slightly disappointed with the results but as you have surmised, it is such a fundamentally strong business that margins can be improved going forward.

I continue to wonder if more value might be extracted by selling the hotels off one-by-one. Personally I would love to see them sell a couple to pay off all debt and then run the remainder as a cash cow until someone buys us out completely. Getting that debt down as quickly as possible has to be the aim.

Cheers,

Des

[bobthetrader] 05/10/2015 16:08

Having done some research on this company I would say that it is seriously undervalued. Given the current valuation is £14 million. For that you are given a fully functioning business, that includes 9 reasonable sized hotels in city centre locations around the UK, together with profits in the last 3 years, and debt that is falling.

Even if profits stayed at £1 mil for the next few years net assets would increase with debt reduction and probable property price increases.

I don't imagine large shareholders would relinquish their shares for anything under 150-160p/share.

All in my own opinion of course, but as a small investor the opportunity to buy at these levels is a good one.

[topvest] 30/9/2015 07:44

Yes, it does. The directors may have taken a salary; they were working virtually unpaid. Sounds like revenue growth is still strong though so should be another good year. No mention of a dividend but no doubt there will be a final dividend. Continued gradual progress.

[playful] 30/9/2015 07:18

We need to monitor those admin costs as I'm not sure why they have increased by 10% seems a little high to me.

[lanzarote666] 19/8/2015 17:44

Still cheering the long term upward trend.

Found this recently and it sort of highlights the undervalued share price here. PHO has a market value of £15.0m;



Anybody know any nice Chinese man with the odd £50m?

[playful] 06/8/2015 20:34

Good day for all the Peel supporters...

[sirhedgealot] 15/6/2015 11:07

I didn't attend the AGM to clarify. I look forward to news here.

[sirhedgealot] 14/6/2015 07:12

I don't know why I wrote that comment here.

[battlebus2] 04/6/2015 07:27

Sir hedgealot??

[sirhedgealot] 04/6/2015 00:07

Well done.

[battlebus2] 03/6/2015 23:40

Anyone attend the AGM today?

[sirhedgealot] 27/5/2015 22:27

Good stuff.

[battlebus2] 20/5/2015 22:28

X dividend this Thursday for 1.5p.

[davidosh] 28/4/2015 23:40

The Peel company presentation by Robert was one of those filmed at Peterborough so I should be able to provide a link to it once the editing is complete. PHO were also tipped as one of five good value plays for further research and the gap to the NAV was highlighted alongside the fact that the main shareholders are seemingly keen to agree an exit in the coming months/years.

That may explain recent interest.

[sirhedgealot] 28/4/2015 22:15

Someone's hungry.

[topvest] 27/4/2015 21:30

Debt reduction does seem a priority. With the improved property market I do wonder whether they may try and sell one of their assets to achieve the de-gearing more quickly? Anyway all bodes quite well here and nice to back in profit. The clock is probably ticking to crystallize value before the market turns down again. How long they have is questionable but I would expect something to happen within 12-24 months as they won't want to risk missing the upward trend given their ages!

[playful] 27/4/2015 16:04

He views the PHO listing as an ideal vehicle for any ambitious hotel entrepreneur to access the markets. No selling / restructuring on the cards so its business as usual for the time being and paying the debt down which inevitably helps increase the S.P

I was booked into the Bull hotel and the service and room standard was high. We didn’t discuss the AGM date but he did say having met many long term shareholders he felt a certain duty to deliver a good outcome for everyone invested in the group.

[battlebus2] 27/4/2015 15:12

Thanks playful, especially for mentioning the little shareholders like myself.
Like Des says good to see you up your target.

[deswalker] 27/4/2015 15:09

Thanks playful. Good to hear you are so positive and have upped your target price accordingly.

When I met him last Summer it was tough to tell whether he would sell out at 170p ish or whether he feels the up-to-date NAV should demand quite a big takeover premium to this price.

I guess no specifics about selling / restructuring any individual properties were discussed ? Is it just the portfolio as a whole that he will look to sell on in due course ?

Was there any clarification about his inference in the video that somehow the listing would be maintained following any disposal ? Seemed an odd comment to me ...

Finally, any idea which hotel will host the AGM this year. I shall definitely attend if it is Bradford or Leeds and possibly Nottingham too.

Rgds,

Des

[playful] 27/4/2015 14:23

I attended the presentation from Robert Peel and felt it was perhaps my favourite during the whole event. He was very genuine and honest in admitting the business is now at the stage where passing on the baton to some young entrepreneur is the most likely outcome within the next three years.

The business is doing well, and he is very focused on reducing group debt. The question of who will succeed him came up and while he mentioned he had people to take over should it become necessary, he felt he would see things through himself. This suggested to me we don’t have too long to wait to see some real value here.

The portfolio has not recently been valued and he has no intention of getting it done anytime soon. The net asset value is where he feels the shares should be trading in the not too distant future.

I originally had my price target in the spreadsheet at £1.10 but following this I have increased to £1.50 which should be achievable within 12 months.

Following the meeting I thanked him for taking all the little PHO shareholders along with him for the journey.

If anyone has not seen his proactive interview you can view it here:
www.proactiveinvestors.co.uk/companies/stocktube/3566/peel-hotels-chairman-devoted-to-paying-off-debt-3566.html

[deswalker] 26/4/2015 20:33

Following on from my write-up of the last AGM in post 176 I hope someone who attended last week's presentation will be willing to reciprocate by writing a similar report.

[rndm355] 23/4/2015 16:29

Thanks for the feedback Des.