All Leisure Group Share Discussion Threads

[somerset lad] 12/2/2012 15:23

CantEatValue, thanks for posting this -- a very thorough and balanced analysis IMHO.

[canteatvalue] 09/2/2012 10:57

Good to see the value getting some recognition here.

FYI This share is my pick for the Fool share competition this year so I've done a write up here:



Hope people find it useful / interesting.

[pictureframe] 08/2/2012 19:34

Yr End Rev P/tax £m)EPS P/E .Div Yield
31-Oct-07 45.08 4.74 14.90p 12.6 5.00p 2.7%
31-Oct-08 67.51 9.05 14.40p 9.9 3.66p 2.6%
31-Oct-09 73.59 2.64 4.40p 17.5 1.82p 2.4%
31-Oct-10 82.61 (2.04) (3.40)p n/a 1.95p 3.9%
31-Oct-11 80.36 5.66 9.20p 3.0 1.95p 7.1%

Just a quick list of figs to show just how undervalued this is

EPS of 9.20p - P/E of 3 & a 7.1% yield.....enjoy

[mesquida] 08/2/2012 14:49

Since the day of the prelims there have been two, if not three, days when some fairly large stakes have changed hands. Looks as though this has finally removed a stock overhang that has clearly been weighing heavily on the price for some time now. As a result I would not be at all surprised if we now see this motor fairly quickly back up to the 40p mark! After all, there was serious cluster buying by the Board at 42p as recently as last July, and the market for small caps is significantly better now than it was then.

[pictureframe] 08/2/2012 13:13

Looks like people are waking up to the value here - almost a 5% return on next divi payment !

[pictureframe] 06/2/2012 13:56

After running the ruler over this share this weekend , I have decided to make a purchase. This looks good value on all instrinsic values + a stonking yield

[somerset lad] 25/1/2012 21:48

IMO they're very good in the circumstances. EPS of 9.2p looks very positive, especially compared to the share price after stripping out net cash; but this figure is flattered by the inclusion of some one-off items. Even on the most conservative approach to adjusting the statutory earnings, the business remains profitable, commands customer loyalty and is investing for the future. Also the dividend is maintained, yielding c 7%. And price increases on some of the vessels this year.

But the concern about difficult winter trading is repeated; and forward bookings are at lower levels than last year, raising the question whether the volumes will be made up (people are booking later) or not.

[knigel] 25/1/2012 19:49

Good results people?

[ddahj] 09/12/2011 10:55

I now realise that with the right broker who can try a few MMs it is possible to buy these shares at a sensible price.

[ddahj] 02/12/2011 11:18

There are two considerations here, the company and the market maker.
Trades can be reported later for AIM stocks, perhaps 3 days. If one investment company sells to another they could agree privately and any balancing shares left with the market maker. The problem here is that market makers don't want to trade this stock and in order to buy a few shares you need to pay a 20% premium to the mid price. In other words buying 10000 shares at 27p, they need to make a minimum of £500. This share price drop may however result in 3 investors paying 33p for 30000 each and a large trust off loading 100,000 at say 26p. The new shareholders will be pleased to have bought at a discount to the directors, the market makers will have made a profit and the investment company can get out of unfashionable sectors. Also for the investment companies that sold to directors in July 2010 they will be very pleased with themselves, someone else in their company may have bought at 180p.
So far as the target price is concerned 42p is the price directors paid in July 2010.

[mesquida] 01/12/2011 07:14

The seller has certainly not finished his selling.

[welsheagle] 30/11/2011 19:29

Panmure Gordon reiterated their 'Buy' recommendation yesterday, with a target price of 42p.

[somerset lad] 30/11/2011 11:33

Still no sells on LSE and no trades on PLUS; so perhaps the metaphorical last seller has sold out.

If some of the remaining institutions wanted to sell, I guess they'd look to place with another institution or conceivably sell to management (Roger Allard spent just under £300k in July 2010)?

[ddahj] 30/11/2011 09:49

Great analysis Somerset lad.
I think this is a great little company.
The share is a bargain. It's probably one of the toughest businesses to be in right now. However future prospects are good.
The only thing I don't like about the company is the hedging. This is a zero sum game and usually the only beneficiaries are the city.
I actually became interested in the company because 30% of my portfolio is invested in oil. I don't want to sell and pay Capital Gains Tax. So I am balancing, (hedging!?), my portfolio.
Other concerns, as mentioned here, might be that the directors make a low offer for the business at this level. Or they could delist. Delisted minority interests are not particularly good but still might be a worthwhile investment.
A further reason for the low value, an opportunity, is that large investment companies are rebalancing their portfolios, exiting smaller investments and looking in particular for new opportunities in the Unquoted and Asia sectors. If a large investment fund has lets say £1m worth of shares in ALLG they just won't be able to sell them. Just look at the meagre trades following our consensus in value here. The investment company could sell at what they think is around half reasonable value and hope that management make a bid at 50-100% premium. What do you think?

[mesquida] 29/11/2011 21:43

Anybody know what the bad debt provision is in respect of - it is difficult to understand why any party would owe them that much, unless the Summer charter of the AvH is something to do with it.

[somerset lad] 29/11/2011 20:09

BAM BAM Rubble, I'm not so concerned as you about the balance sheet. The items you've described as "trade creditors" are broader and comprise "trade and other payables". They include true "trade creditors" (£8.4m in Oct 2010 - see note 25), but the much larger item is "accruals and deferred income" (£24.5m in Oct 2010 - again shown in note 25). The latter doesn't worry me -- quite the opposite -- because it's money received from customers for holidays that have not yet taken place and is recorded as a liability until the service is provided.

[bam bam rubble] 29/11/2011 18:23

Weak balance sheet here, money owed to trade creditors is now twice the market cap

Oct 2007: £1.6m trade receivables -£14.9m trade creditors = -£13.3m
Oct 2008: £5.0m trade receivables -£24.2m trade creditors = -£19.2m
Oct 2009: £4.9m trade receivables -£25.5m trade creditors = -£20.6m
Oct 2010: £4.6m trade receivables -£33.4m trade creditors = -£28.8m
Apr 2011: £3.9m trade receivables -£36.9m trade creditors = -£33.0m

[somerset lad] 29/11/2011 17:29

Having said all that, if you ask the company, CantEatValue, I'd be very interested to hear what they say.

[somerset lad] 29/11/2011 17:27

I suspect that Roger will maintain the listing because: (a) he's said in interviews that he's open to acquisitions, in which case equity funding might be useful (... not at current prices!); (b) I'm sure he's not looking to exit at the moment, but maintaining the listing helps maintain his options for an attractive exit at the top of the next cycle or the one after; and (c) he's an industry leader and, even if the market has been fairly brutal, he'd need some persuading to reverse his original decision to list.

[doc robinson] 29/11/2011 16:48

possible take over target at this price, floated at approx 1.80!!!!

[canteatvalue] 29/11/2011 16:44

For all the reasons Somerset lad indicated I think ALLG is very undervalued, especially if you consider that in 'good times' i.e. 2006 - 2008 average operating margin was 11.3% and current turnover is in the ~£80-90m region. If you assume that the 'average' operating margin across good and bad economic climates is an average of 11.3% and 3.4% (current margin) and turnover is at £90m then I'd expect an average earnings power of approximately £4.8m (after tax). Even a low P/E multiple would justify a much higher market price than currently and there's the added benefit that in good economic times the market price might reflect the expectation that 11.3% margins are the norm and overvalue the company (like in 2007).

However, I think SteMiS has hit the nail on the head here for me. If I were the owner right now I'd be looking to buyout the remaining free stock and delist because I'd be getting a stinking huge bargain & I'm not sure what we can do to protect against this. I'm tempted to get in contact with the company and hear their input on this.

[stemis] 29/11/2011 16:22

What about the risk that with 83% in the hands of the Chairman and other employees/individuals they decide to save the money on a listing and de-list?

[somerset lad] 29/11/2011 12:39

ddahj is right so far -- no sells this morning.

I guess they have around £9m of cash: £7.0m as at 30.4.11 plus £2.0m from court case plus £1.9m from currency derivatives plus (or minus) whatever cash they've generated from trading since 30.4.11, less irrecoverable legal costs (say £200k) less the Euros 2m deposit on Minerva less the costs of the further upgrades for Alexander Von Humboldt / Voyager (presumably a much smaller spend than the original upgrade cost of Euros 7.5m).

If £9m is right, they have 14.6 pence per share cash and an EV of £7.7m (12.5 pence per share).

Although the outlook statement was fairly gloomy (although more for Winter trading than Summer), the share continues IMO to offer great value:

(a) Stripping out derivatives losses and gains, it generated profit of £3.4m in 2010 (after taking account of volcano losses of £1.4m) and £2.6m in 2011 (after taking account of Egypt losses of £800k and high oil prices of £1.3m, using the estimates from the interims), giving a 2011 EPS of 4.21p and a trailing EV/E ratio of 2.97.

(b) Yield of 1.95p = 7.2 per cent. at 27p.

(c) It's cash rich with no risk of insolvency.

(d) Management believes that the assets are worth more than their current book value of £42.2m (as at 30.4.11) and even at book value (68.4 pence per share) the assets dwarf the current ex-cash share price of 12.5p.

(e) ALLG is acting in the way you'd expect an owner managed business to. It's investing for the future, upgrading its fleet to add more balconies and improve customer experience, and to increase capacity (Summer 2012 capacity up 15%). IMO this is sensible for the long term, since cruising is a growing market and the analysts following Carnival predict that demand will outpace supply.

This is (to me) all good, but we will need something to spur a turn around, presumably one or more of the following:

(a) Fall in oil price (ALLG is one third hedged).

(b) Strong summer trading / recovery in consumer confidence. Since the demographic is principally >55s, this may be more a matter of confidence (which can turn fairly quickly) and less of deleveraging (more time consuming)?

(c) Rise in sterling, although most of the currency is hedged for the year (and, anyway, I can't see sterling appreciating much in the foreseeable future).

(d) Stability in Egypt to allow Discover Egypt to return to normal trading.

[ddahj] 29/11/2011 09:26

I can't see anyone selling at this price, 25p. Trading update. Considering the difficulties in the leisure business these are good results.