All Leisure Group Share Discussion Threads

[diku] 01/1/2014 17:54

With the current horrendous UK weather I can see people booking for a sunnier winter breaks abroad...

[diku] 20/12/2013 21:44

This is slowly creeping up...

[welsheagle] 10/12/2013 20:05

Just undervalued, and revovering from bad news in recent years.

[diku] 10/12/2013 19:39

On the move again...is the good results from the other holiday company rubbing off here hence the rise in sympathy...

[canteatvalue] 02/12/2013 17:30

hxxp://www.travelweekly.co.uk/Articles/2013/12/02/46213/just+you+reports+sales+growth+after+appointing+trade-focused+team.html

[diku] 28/11/2013 08:31

On the move again...somebody paid above the offer price suggest could be going higher...

[diku] 19/11/2013 14:25

A bit of buying today but no price movement...

[somerset lad] 12/11/2013 14:08

Rob Bryant has sold down to below 3% following his resignation in April.

[canteatvalue] 22/10/2013 14:15

Thanks very much for that Slater link Somerset lad - slightly surprised they haven't considered it for the growth fund given the CAGR of sales for the past 5 years of 23%! Them selling in to the market will no doubt account for the recent share price weakness. Also I agree with your thoughts re: minority risk - they strike me as having made sensible long-term decisions in the face of a general industry slowdown and overcapacity (The P&M acquisition just seems ludicrously good when you look at what they paid for it) and the dividend waiver is still the most incredible minority shareholder action I've ever seen - they turned down money they were fully entitled to as a show of good faith - shows management's mindset IMO.

This is still my (joint largest) position.

[somerset lad] 22/10/2013 11:29

For those worried about minority shareholding risk, it's worth bearing in mind that:

(a) the large insider holding has led to (in my view) some wise capital expenditure, upgrading the cruise fleet in the downturn (rather than simply running for short term earnings) and investing in Page & Moy (bought for £4.2m after a private equity buy in 2006 for £180m and already successfully turned around); and

(b) ALLG showed huge respect for its minority holders when the insiders waived their entitlement to the company's final dividend (for now) but it was paid out to the minorities. If management's mindset was to enrich themselves at the expense of the minorities, it is inconceivable that they would have done this.

[somerset lad] 22/10/2013 11:20

The Slater Income Fund has partly sold ALLG "on yield considerations": see

Since the yield is nil, presumably they chose not to sell into the crowd dumping on the ending of the dividend and waited for the recovery.

When I last bought - 20 September - there was a lot of volume available which fits with today's update. Supply now seems tighter.

I'd expected more movement: if people are spending more on cars, luxury chocolate etc (to pick some recent random stories), I'd expect to see more spending on ALLG's holidays.

[diku] 26/9/2013 16:00

Is that rolling over or changing hands?...

[canteatvalue] 11/8/2013 15:48

Emmo,

I've written a lot about ALLG over at the Motley Fool. Check out this thread:



And search for "corporate governance" to get my thoughts on the delisting/minority shareholder risk.

[emmo1210] 11/8/2013 14:16

Hi CantEatValue,

What are your thoughts on the ownership structure with such a small free float (10%ish i think) and the risk of a delisting for instance?

[stemis] 02/8/2013 19:30

Interesting point on the Tour division profits. Does anyone have a copy of the Panmure research note?

[canteatvalue] 02/8/2013 18:54

Stemis,

Precisely. The market is valuing the whole entity as though profits are permanently off the table for the cruising division. That's clearly nuts and ultra-short-termist, even 2009-2011 in a post-economic collapse environment it was doing 3-4% margins. A sum-of-the-parts analysis on margins normalised across the economic cycle yields an intrinsic value far, far greater than the current market cap.

Also, the £9.1m profit figure for the Tour division is too high - they acquired it part way through the year after it had already made losses due to the seasonality. In the notes they give the real figure which is the profit assuming P&M has been part of the combined entity for the full year.

P.S. If anyone can convince me to tone down my bullishness here it'd be much appreciated. It's my largest position.

[stemis] 02/8/2013 10:00

Although Panmure see a recovery they don't see it until 2014. In 2012 ALLG made an adjusted PBT of £0.8m. There has been an improvement in H1 2012/13 of £3.5m and a £1.6m cost from the generator problems in H2 on the MV Voyager. All other things being equal that would deliver a PBT for the year of £2.7m. PG are forecasting £1.2m.

There are lots of words in the interim statement but little clarity e.g.

"the outlook for the Tour Operating Division in the second half of the year is positive, with first half operating losses expected to be more than offset by profits in the main trading months of May, September and October."

I should hope so. Tour division made £9.1m in 2011/12!! Are they saying they don't expect profits at that level this year or are they just being coy?

I guess it's all about recovery in the cruise business. Back in 2008 ALLG was making an operating profit of £7.6m.

[masurenguy] 02/8/2013 08:18

Here is the article.

Analyst tips All Leisure for recovery
By Phil Davies | 01 August 2013

All Leisure Group is being tipped for recovery by a leading City firm of leisure analysts.

Panmure Gordon, issuing a 'buy' notice for group's shares, described half-year results issued earlier this week as "encouraging" with the narrowing of cruise losses by £3.5m to a half year loss of £7.6m while the tour operating business continued to trade well. The firm said All Leisure was now "ripe for recovery" following a series of unprecedented trading disruptions due to one-off events including the Costa Concordia disaster, itinerary disruption and the impact of Egyptian civil unrest impact on the Discover Egypt brand. "These factors have been unfortunate and completely out of management's control and given the operationally geared nature of the industry has resulted in a significant deterioration in operating profits," said Panmure Gordon. "A full recovery in All Leisure cruise profitability to normalised range could potentially yield a c£11 million swing in operating profit."

It described All Leisure as a business in a state of transition following the acquisition of over-55s specialist Page & Moy in May 2012. "The focus on niche holidays we believe significantly reduces operating risk, with higher barriers to entry and higher levels of repeat business," the Panmure Gordon note said.
"We believe the Page & Moy acquisition comes at the right time, with the UK tour operating sector, after several years of significant capacity cuts, now finally seeing a stable balance of supply and demand in our view, with the number of UK holidays overseas stabilising after year-on-year reductions due to supply cuts (with a corresponding increase in price)." It sees the Page & Moy business alone as being "arguably worth significantly more" than the £19m market capitalisation of the overall business.

[canteatvalue] 01/8/2013 20:01

hxxp://www.travelweekly.co.uk/Articles/2013/08/01/44872/analyst-tips-all-leisure-for-recovery.html

[canteatvalue] 30/7/2013 12:09

At first I was a bit disappointed but digging in to the results I'm happier. Cruising profitability improved on a LFL basis by £3.5m. I forgot that last year didn't include a first half contribution from Page & Moy (which, like cruising, loses money in the first half of the year). Sadly that £3.5m improvement will just be eaten up largely by the Egypt + Generator breakdown exceptionals, although I'm wondering if they might actually potentially sneak in to profit this year now. Overall, I'm still a bull on the long term given the existing market cap implies they will do an average of 1.2% margin forever in to the future for a business that averages >5% over the business cycle. As usual, the short term is all that matters to the market so I'm happy with the time arbitrage here.

[emmo1210] 16/7/2013 21:35

I also expect a loss unless business picks up massively for the rest of the year. Whilst the improved sales for the beginning of the year is a plus, I think it looks better than it is - the figures from last year were depressed due to ships being out of service so the 20 and 30% improvements are from low passenger numbers of last year. They really cant afford any more mishaps and that worries me.

[canteatvalue] 16/7/2013 17:29

Agree with you Somerset lad. Whilst both the two events are pretty bad in terms of profit impact, this year was never going to be the stand-out one in terms of earnings anyway due to all the restructuring. In fact I expect them to probably post a loss this FY and can see the share price languishing for a while. However, the improved trading conditions implies a) the market overall is recovering and also b) the combination of the two businesses is probably bearing synergies. Both of these bode well for the longer term future of the group.

[somerset lad] 16/7/2013 16:52

Another intra-day RNS, which I'm not keen on.

I am, though, keen on the trading update: "Where previously the company had experienced later bookings, trading at this early stage of the financial year 2013/14 has started very well across all brands, with the exception of Discover Egypt, which has limited forward capacity. Sales for Voyages of Discovery are up 30%, Swan Hellenic 21%, Hebridean 19%, Travelsphere 23% and Just You 29%."

ALLG is not known for overplaying its trading performance and "very well" is pretty bullish as their statements go.

I'd expect firmer pricing with strong earlier bookings.

The exceptionals for the cancellations of Voyager cruises and Egyptian cruises led the MMs to mark the shares down, but I think they've missed the bigger picture.

[canteatvalue] 03/6/2013 13:57

Brian,

Not sure - not a critical loss but probably quite a hit. The link to the cruise fares for what I think is the right one are here:

http://www.voyagesofdiscovery.co.uk/voyage_fares.php?cruise_id=18687

It looks like twin rooms are on average ~£2000, so £1000 per person.

Now assuming the second cancelled trip is of a similar occupancy size then ~1000 passengers have been affected, so that's ~£1m in lost revenue. There'll also be other costs associated with dealing with the cancellation I'd imagine. And I've no idea how much it'll actually cost to fix these generators. Maybe £1-3m profit impact?

To be honest I hadn't really expected this FY to be that great anyway - there's lots of chat in the management discussion about this year being a 'transitional year' and there being lots of synergy costs to bear. That's not a recipe for blockbuster earnings. It's the future a few years out that looks more exciting for me.

Again not a share for those who like short term holding periods - I've no idea when it'll ultimately deliver the proverbial goods but I still think the share price here is utterly ridiculous in the context of even a conservative estimation of the average long term earnings power.