Action Hotels Share Discussion Threads

[jpmorgan] 06/7/2018 09:43

Agree on the offer, and even with dividends have a capital loss on my investment on this one. Float in December 2013 was 64p and raised £30.5m.

The scale and breath of assets in Australia and overall business is better after 4+ years, but with such a large shareholding by the family close to 75% and CEO looking to move, it is commercially rational for them to get the business if the market values it at a bargain price compared with 100p+ NAV :-(

[jpmorgan] 01/7/2018 15:34

Takeover by Al Sabah family came through this week. Low price compared to published NAV. Even if sceptical on NAV valuation, there is a lot of margin for long term holders. 25% in the £ is a nice bargain for the family with ability to become cash flow psotive and profitable on day one by restructuring/removing inter company debt.

Think the independent directors have accepted the path of least resistance on this and would have thought a figure of 40%+ would be more realistic based on trading and inter company loans. Knowing the context this is understandable, and this is likely to sale through over coming months.

Probably listened and believed a little too much from CEO, and FD on independence and in retrospect think they should have used more core UK based corporate loans to managed investment and growth since the float to diversify away from the original family control. Did not happen, so lesson again to watch the actions, and not just the words.

[jpmorgan] 18/3/2018 12:28

My take/interpretation on latest bit of news out in few months:

Agree Charts are poooor...Not much demand for shares until growth is proven again. Al Sabah family now have 72% of the company as of 25th March having bought 7% from Blakenny LLP at 23p. Float in December 2013 was 64p and raised £30.5m. Market cap c25m now at 19p.

Financial Issues:
The trading update in terms of sales was in expected lower range, but the operating profits were impacted notably. The execution costs on development pipeline is in short term are not brilliant with high depreciation costs, interest bill, etc. The final also likely also excluded a $1.2m rent waiver. So overall wrong direction but manageable via current structures.

The company has 2276 rooms and looking to add Melbourne (376 rooms) from April 2018, and Oloya Riyadh and Dubai Creek in 2019 and adding 336 rooms approx so in 2020 will have c3000 rooms.

The key value until the piepline is complete is NAV is still estimated at 109p. If the company/assets were for sale would they achieve this? Probability looks positive in this regards, but low probability of this occuring in short term in terms of a sale (even single units). More likely the Al Sabah family buy out minority shareholders at a low price if Melbourne opens well, and this is not get reflected on the OMV share price.

It looks like the company by focusing resources on less developments, reducing dividends will be able to complete the confirmed pipeline within existing financial resources. If Melbourne can get a stable high occupancy rate as other australian properties this increase in rooms could move the needle in a positive direction with continuing contributions from other recently opened hotels increasing sales.

The busines model and split of locations looks still to be intact at a local operating level. The group also needs to be considered on a property NAV level over long time period for a fairer valuation, but this question if this feasible with corporate structure.

Am retaining my small holding which has no influence on AHCG, as a potential turn on 12 month view is there and also trust in CEO and keep in touch with travel market . Will not increase further till get further information from formal results, melbourne hotel opening, and more clarity with management/al sabah family on strategy in terms of long term financing now significant scale ane execution risks subside.

[tsmith2] 08/3/2018 08:52

Not a good update

[its the oxman] 14/12/2017 23:49

Dire chart

[jpmorgan] 03/10/2017 22:20

Interim results out. Quick thoughts.

NAV: GBP 1.06 (Down from 1.09)
LTV 55% (Up from 51%. Some interest rate reductions in loans in USD and AUD) which management looking to reduce further.

Pipeline: Small room additions in H2, and around 10%+ increase in 2018-2019 onward to target of 3000+ rooms including a new hotel in Australia counterbalancing middle east growth on more balanced basis in terms of rooms.
Trading: Drop in revenues linked to economic challenges and politics in middle east but model looks sustainable with the challenges of downturn, but trading looks more buoyant in Australia.

With the fine tuning on the pipeline of hotels, and continuing efforts to reduce the interest rate on loans the company looks to be moving ahead steadily. The NAV leaves a significant margin of safety in a buoyant market, but trading challenges in middle east are of concern. CEO bought a notable level of shares recently. Will continue to monitor/hold as long term have positive view on travel market in middle east/Australia and business model.

[jpmorgan] 04/6/2017 12:25

Quick thoughts and review on this one as not looked at for a while.

Notable director buy and larger than normal volume over last couple of days moving the price a little higher. With a dedicated FD and on-going moves to minimise interest bill the next 6-12 should be interesting with scaling out of business model this year. The business model looks to be in intact but opaque in many ways in terms of results (and comparison figures). Trading will determine success in LTM and share price.

[walbrock82] 02/5/2017 14:08

Would buy a company if finance costs are rising faster than operating profits?

[its the oxman] 02/5/2017 12:53

Interesting info, horrible spread 35-39p

[its the oxman] 26/4/2017 21:56

Yes, may be best to wait if no catalyst as it may drift lower. Tempting though.

[hybrasil] 26/4/2017 11:54

It a hotel company in growth phase.
When it stops expanding thats when you will see value but it is a share for 5 years time,
It could be interesting as a buy now for 2022

[its the oxman] 25/4/2017 21:02

Watching but what will stop the fall. Bit of disaster for shareholders so far. Do you see any catalysts for change?

[hybrasil] 25/4/2017 17:45

I am about to buy here. Anyone else watching?

[hybrasil] 02/3/2017 19:40

And still it falls

[sleveen] 16/9/2016 07:50

It's the banks that are winning here.

Debt rising quickly.

Interest costs up from 2.9m to 5.7m.

[sophiegb] 12/9/2016 13:07

Proactive Investors is here:

[proactivest] 18/4/2016 15:24

Video interview with Alain Debare



Action Hotels PLC (LON:AHCG) is well on track to hit its targets after the completion of its tenth and largest hotel to date pushed total room count to just under 2,000. The Brisbane property opened in March and broke even after the first month.
In its full year results for the period ending December 2015, the group saw a 30% increase in rooms, 92% since listing and Alain Debare, chief executive, tells Proactive he is “really pleased with the results and the growth”
He says the company is “clearly benefiting from the strong demand for economy and mid-market hotels” in Australia, while in the Middle East there is a “massive demand” for Action’s hotels, as it is the “only one addressing the gap in economy and mid-market hotels in the region”.

[jpmorgan] 30/3/2016 10:26

The thread on this company has gone quiet.

Looks to be delivering on strategy from last update. 1561 rooms currently, and 908 rooms scheduled in 2016 to be added. Significantly below NAV, est - 40%. Business model looks tangible and real with growth from 330 rooms in 2008 and revenues with large proportion based on a Freehold basis.

Significant shareholder family who have a controlling stake and commercial history over many decades. 2 Year lock in finished in Q4 2014, so they could now takeover, or grow as currently.

2015 Results due out in April. Am I missing something obvious as looks like a long term growth story?

JPM

[m.t.glass] 15/2/2016 16:17

It was 70% in my header when thread began..
No chance of him being outvoted on anything.

[cascudi] 15/2/2016 11:29

according to

the chariman own 65% of the company (44m£) ..
that is a lot

[proactivest] 17/7/2015 11:15

Video interview with CEO Alain Debare


The chief executive of Action Hotels (LON:AHCG), Alain Debare, says the company remains on track to open 16 hotels and 2,820 rooms by 2017.

“There’s a lot of focus on making sure we get these hotel deals complete on time and to budget,” said the CEO. “But we’re on track to meet that target.

Today the firm told investors that adjusted gross operating profit was up 11% at US$11mln in the six months to June 30.

Earnings before interest, tax and depreciation advanced 14% to US$8.7mln on total revenues of US$21.6mln.

Its three and four star chain, which is focused on the Middle East and Australia, said occupancy rates at mature operations were above 80%.

[m.t.glass] 18/6/2015 20:01

Lengthy reference to Action Hotels including interview comments.

[gnnmartin] 01/6/2015 21:36

Odd: an RNS today to tell us that shareholders were told on the 11th of may that the AGM would be held on the 28 May.