Elegant Hotels Share Discussion Threads

[lbo] 08/11/2016 15:31

I noted at the half year results that The House saw RevPAR falls of 7% because of declines in occupancy.

[che7win] 08/11/2016 14:51

The best Adults only hotel in Barbados - The House:

[che7win] 08/11/2016 14:49

Zeus comment:

As indicated in October Elegant Hotels has completed on a management contract with a prime property where we would expect them to put their unique stamp on. This is a positive strategic step that will expand the business in an asset light way and potentially improve the quality of earnings. We continue to believe the shares look attractive from a valuation, NAV and dividend yield perspective.

Management contract: The company had previously announced on 14 October that it had reached an agreement in principle on a management contract with Hodges Bay resort in Antigua. This marks an important strategic step for the company and is their first step outside of Barbados. Management contracts represent a compelling opportunity to expand beyond Barbados without the capital requirements associated with full ownership. Management note in the announcement they are currently considering a number of other similar opportunities. We believe the low investment requirement makes them a good opportunity to accelerate earnings growth and enhance returns.
Features of property: The Hodges bay resort is currently under construction and is expected to open its doors in mid to late 2017, when it will be branded as “Hodges Bay Resort & Spa by Elegant Hotels”. Upon completion the property will be a 122 room luxury beach front resort, spa and residential development located in a prime location on the north shore of Antigua. The property is located close to the Island’s international airport, V.C. Brid international and the island’s capital, St John’s. Other features of the property include a heated ocean-side infinity pool, a heated lounge pool, a luxury five-therapy room spa with advanced technology hydro pool, three dining outlets, a coffee shop, an al-fresco all-day poolside grill, six bars, and a wide range of water-sport and other fitness, leisure and entertainment facilities. We believe the resort will be attractive to both adults and families.

Forecast assumptions: We expect the contract to be eps enhancing in 2018. Minimal investment (we estimate c$1.5m) means contracts are expected to have a 3 year payback period, based on an estimated $0.5m annual EBITDA contribution. We leave our forecasts unchanged for now and believe these contracts further underpin our forecast earnings growth and supports our expected returns.

Valuation: We continue to believe the current equity valuation is underpinned by significant asset backing, we estimate NAV of $198.4m, (184p per share at 1.21 USD:GBP) based on an independent freehold valuation at IPO of $235.5m, plus $22m for the newly acquired Waves hotel and peak net debt of $59m. The company currently trades at 8.1x FY17 EBITDA, falling to 7.0x in FY18. On a P/E basis the company trades at 8.9x and 7.4x FY17 and FY18 earnings respectively.

[lbo] 08/11/2016 13:15

A valid point about beach erosion risks to the Elegant Hotels over time.




And FYI I hear Risk Capital Partners have taken 550,000 shares on top of Lukes 9,450,000 which matches exactly the 10m sold by Vision Capital. But surprised no RNS on this as surely they are connected parties? But then Again we are talking about the highly regulated AIM market! And not even Luke gets everything right. Maybe that's why he did not buy all the Vision Capital shares? They only need enough share power to push though their agenda rather then buy out the whole Elegant Hotels business which is supposedly so undervalued.

[che7win] 08/11/2016 12:36

And don't you think that Luke has no experience in the hotel industry, he has given a key note speech in the past:

He will provide good influence to excellence in EHG I'm sure:

[che7win] 08/11/2016 12:30

There are no synergies with Nielson, how do you come up with that idea?

Hey, maybe they want to open Patisserie Valerie cafe's in Barbados.

[salchow] 08/11/2016 11:43

Would I support it? Who knows. Much more information would be needed. Certainly I will not be giving any thought to the possibility until there is an RNS.

[lbo] 08/11/2016 10:52

So you would be happy if Luke plans to use Elegant Hotels to structure an exit on Nielson?

[salchow] 08/11/2016 08:14

I have no idea what Trade Winds was like and why it matters. This is a new high class development is it not?

LBO has given various reasons why some may write positive reviews re EHG in support of their own interests. A negative slant was even put on Luke Johnson's highly positive acquisition of £6.5M of shares! LBO has only written extensively on two shares in recent months. On one, a type of condom maker, he appears positive. The other is EHG where is he negative. This can only lead me to a conclusion that he is either short of the stock, wants to go short of the stock, is a disgruntled ex-shareholder who has sold out at a loss, is a disgruntled ex-employee, an ex-customer with a grudge or a person with some other sort of issue. There has to be an ulterior motive because no one would select a single share for continuous negative comments without having a reason.

I have to say that if holiday makers start dropping like flys from the zika virus it will certainly have an effect. However, he has missed the most important risk. Part of the Antarctic ice cap is said to be breaking away and if this happens it could eventually raise sea levels by 10 foot. Surely there would then be no hotels left to talk about!

[lbo] 08/11/2016 07:26

Not sure you can really call it diversification when it's really just circles as they used to have a property in Antigua already. It was called Trade Winds. And for all talk of expansion over the last 15 years it failed to really grow turnover but rather the same company and hotels have just been repackaged and sold to different investors

[nw99] 08/11/2016 07:07

Diversification good RNS this am

[lbo] 07/11/2016 07:50

And I agree it sounds like they are not sitting on their laurels and are responding with increased marketing and hotel upgrades that require capital expenditure but herein lies the problem. As even small falls in occupancy and rates have a large multiplier effect on bottom line earnings in the Hotel industry due to high capital expenditure requirements in an inherently cyclical sector.

[lbo] 07/11/2016 07:26

Interesting comment in that article. Although it's about all
the Caribbean not just Barbados it says;

And while he described the Caribbean as “one of the best places in the world to vacation,” he said up to July of this year, there was a 2.7 per cent fall-off in occupancy at “traditional hotels.”

[che7win] 05/11/2016 14:43

They don't sit on their laurels do they:



Of the appointment, Sunil Chatrani, CEO of Elegant Hotels Group said, “We are thrilled that Chef Alfredo has joined the team at Turtle Beach. He is an incredibly talented and driven chef and we know that his new recipes will be hugely popular and that he will take the gastronomy offering at our ever popular all-inclusive south coast hotel to a new level.”

Chef Alfredo added, “Barbados is renowned for its delicious seafood and for the abundance of fresh ingredients available. I am excited to add unique twists to the recipes I’ve designed for the hotel and enhance the dining experience for our guests.”

The appointment is in addition to a number of developments planned for the hotel during 2017, as a partial revamp of the hotel begin to take shape, with the introduction of a coffee shop, ice cream bar and a number of pop-up restaurants and bars serving local food and drink.

[che7win] 05/11/2016 14:30

You missed one:

[lbo] 03/11/2016 11:42

Not the easiest sell at the moment

[che7win] 03/11/2016 11:26

Brexit vote going against govt.Pound jumping, this should be up more

[sharw] 01/11/2016 10:48

Another blow to visits to Barbados published yesterday:

[lbo] 30/10/2016 12:26

Spooky so you would rather questionme then management? And if you think Luke only purchasing 10% when Vision Capital have more shares to sell also does not point to an agenda elsewhere then clearly you would rather blindly and naively trust them rather then someone who's only agenda is to question what's going on and point to the obvious negatives that many seem to want swept under the carpet at the moment! And yes I do see Luke as a negative as his plans have not been explained to shareholders. And yes I also see it as a negative that no hotel trade buyer appeared for Elegant Hotels in its its current state. But maybe I am being over cautious as we are talking about investing in the highly regulated AIM market!

[che7win] 29/10/2016 12:04

Spooky, Entirely rational post.As I stated last week, I acknowledge there are negative issues here, but I felt they were discounted in the price.My game is a long game here, I have no intention in selling and I'm quite happy to sit on a high yield return meantime - albeit one with a low cover.

[spooky] 29/10/2016 11:58

At this stage I don't have any bias but when someone like Luke Johnson buys 10% of the equity it should be acknowledged as positive news. Anyone who tries to argue otherwise obviously has an agenda. If LBO simply stated that it was positive news but he still didn't think they were a buy for the following reasons and left it at that, then i wouldn't of had an issue.

[che7win] 29/10/2016 11:46

Anyone with a negative bias, please ignore:

[che7win] 29/10/2016 11:05

Spooky, it's quite simple. If you're a holder, you aren't allowed to be bullish here, even though that's what you believe and hence why you are invested.
Anything positive is deemed a pump, it's not "ok for posters just to be bullish and ramp shares short term to specific price target".
The view is that anyone posting recently is just a ramper looking for a pump and dump, after all, this company doesn't make money, doesn't pay a dividend and doesn't have assets. Err, maybe I'm wrong?

If the chart becomes positive, that's not allowed, pumpers are at work; if falling, post negative articles at will and feel privileged to do so.

You are allowed to post negatively to ensure vulnerable PIs with lots of money but no brains don't invest (just ignore the 20% that could have been made from last week).

The idea is to keep them away from buying a 'bargain' and allow the bigger investment world to make stupid decisions.
The motto - "yes I agree the shares could go up in the future but they can also still fall more".

Please ignore the 9.5% yield, a NAV of ~180p, positive hotel reviews and P/E 7 (rising to ~9 next year). Especially ignore sophisticated buyers like Luke's 10% purchase this week, he has made a mistake because he just erm, has.

One must conclude their is a better investment out there, I wish that would be stated to the gullible so I can go buy.

PS: the 20% rise in the share price is rather an inconvenience. Ignore looking 1-2 years ahead, it's not within the rules, it just can't go up, right?

[spooky] 28/10/2016 19:37

LBO, i'm a little confused, are you a buyer or a seller? Do you actually have any view that may be useful to someone trying to make a decision about whether to buy or sell the shares? Everything that you have posted is information that most informed investors will have been able to figure out for themselves.