Elegant Hotels Share Discussion Threads

[stemis] 25/10/2018 15:10

Trying to think if of any more negatives that you may have missed.God forbid any air conditioning units breakdown or rum punches getting spilt.

I wouldn't bother engaging with LBO; he has some sort of grudge against the company. Even if they discovered gold under one of their hotel LBO would be claiming it would be worthless as the price of gold was probably going to fall to zero...

[lbo] 25/10/2018 15:00

https://www.hotelbusiness.com/caribbean-hotel-profits-were-suffering-pre-hurricanes-cbre-report/

[lbo] 25/10/2018 14:54

Thanks for highlighting the extra competition not only from Sandals in Barbados but from other Caribbean destinations which seem to be attracting tourists and growing perhaps at the expense of Barbados and also the extra hotel room supply that is coming on stream when Elegant Hotels is already showing lower occupancy rates then its competitors. Also thanks for highlighting that Sandals ADR $550 is above Elegant in Barbados which is only $433. Also sounds like Elegant will need to significantly increase its Capex to be able to reposition it's offering and compete with all that increase in competition.

[shauney2] 25/10/2018 14:31

No thanks,life is too short.The debt is cheap compared Sandals.

Sandals has aimed to capitalize on the recent Caribbean tourism surge. According to the Caribbean Tourism Organization, visitor numbers hit a record 29.3 million. Meanwhile, 41,000 new rooms are currently under construction or being planned in the region

[lbo] 25/10/2018 14:16

Debt is real and only falls when it’s repaid unlike the market value of the properties which is not and can fall or be reduced significantly overnight due to many external and internal economic factors. The net asset value is only “implied”; and the property valuation is based on a a CBRE opinion at a specific time and reliant on a number of very important assumptions. I suggest you read the fine print on the CBRE report. Do you know what the NAV of Patisserie Holdings was before it was suspended and found to have no cash at all!?

[shauney2] 25/10/2018 13:57

Trying to think if of any more negatives that you may have missed.God forbid any air conditioning units breakdown or rum punches getting spilt.

Shall we have a glass half full moment here.

So what about taking the debt off the NAV?

"Based on net debt of $72.3 million as at 31 March 2018, this equates to an implied net asset value (NAV) of approximately $177.2 million (199 cents per share or 143 pence share, based on an exchange rate of £1 : $1.40)"

So take 10% off from the lower dollar since and take a whopping 30p off in case they over valued the properties = NAV of 100p a share.

Having been to Barbados a few times you would appreciate how slow they are to build anything.Having all them hotels in situ they are genuine assets.Sandels in Gap was a reincarnation of another hotel.

[lbo] 25/10/2018 12:29

Other issue beside the weak hotel occupancy and the weak sterling is the US denominated debt and it's rising interest costs and it's due to be repaid soonFrom the last annual report; Sensitivity analysisAn increase of 100 basis points in interest rates would decrease profit or loss by $0.7 million on an annual basis. This analysis assumes that all other variables, in particular foreign currency rates, remain constant.The financial liabilities which have a contractual maturity greater than one year are the Group's loans and borrowings. Including estimated interest payments and excluding the effect of netting agreements, the payments due in relation to the Group's loans and borrowings are $8.6 million due within one year and $68.6 million due between one and five years (2016: $7.0 million due within one year and $65.1 million due between one and five years) (ie 2020)Then from the interimsThe Group has third party debt with the Scotiabank in the form of a loan facility of $65.2 million. In addition, the Group has an overdraft facility of $10 million, of which $3.9 million was drawn down at 31 March 2018, and a revolving credit facility of $5 million, of which $4.3 million was drawn down at 31 March 2018. The Group also has a vendor loan remaining in relation to the Waves acquisition of $1 million. Net finance costs increased by $0.4 million as a result of movements in the US LIBOR rate (from an average of circa 75 basis points in H1 2017 to an average of circa 155 basis points in H1 2018)

[cmackay] 25/10/2018 09:21

Elegant main customer base is UK, yes I will agree with that and go further to say the broader Bajan base is in fact UK. Sandals is indeed stiff competition for ehg, I don't think that can be denied either. I can see potential downside in the near term, but medium to long term seems safe to me.

[lbo] 25/10/2018 09:06

Maybe so but would appear most of that the US market if choosing Barbados is staying elsewhere like in Sandals not Elegant Hotels. Elegant Hotels reported only 67% Occupancy in its interim results. Also Elegants main customer base is still UK based. From the interims also "The UK remains the Group's primary market, accounting for 72% of room nights"https://barbadostoday.bb/2018/08/28/sandals-barbados-goes-on-the-radio/It may be the proverbial slow season in the tourist industry, but both Sandals Barbados and the upscale Sandals Royal resorts are enjoying high levels of occupancy, attributed in part to its promotional efforts in major international markets over the past year."Today we are at 81 per cent occupancy for both resorts, and those figures rarely drop; in fact, last week we were at 100 per cent," General Manager Ferry Zievinger told journalists, as the Sandals Royal resort entertained hosts drawn from 19 radio stations from key markets in the United States this morning.

[cmackay] 24/10/2018 20:26

I think Dec-Feb will be very strong from US and Canadian visitors. It's the usual busy spell.

[boonkoh] 24/10/2018 17:26

Hmm, all caps and cryptic doom and gloom message without any evidence.Believe or not to believe...

[opodio] 24/10/2018 06:14

WILL WARN SOON

BOOKINGS WILL HAVE COLLAPSED INOCTOBER

[shauney2] 16/10/2018 07:33

Blimey thats a bit too positive for this thread boon.A good point though.

[boonkoh] 15/10/2018 17:17

Wonder with him as a large shareholder and with PatVal troubles, probably strategic buyers have sounded him out for what he would be willing to accept to cash out of EHG.

[opodio] 15/10/2018 06:51

Luke will quit this week

[lbo] 12/10/2018 11:07

https://www.standard.co.uk/business/jim-armitage-if-he-can-afford-it-luke-johnson-will-have-his-cake-and-eat-it-a3959606.html

[rubberbullets] 12/10/2018 09:48

johnson stock overhang

he has to sell he needs the money

maybe 40p

[mortimer7] 12/10/2018 09:46

LBO, I thought it best to own up to a couple of my recent shortcomings in case you wish to use them to bolster your case against EHG.

Firstly, went to get my mid morning toast only to discover there's only a couple of slices of bread left with tiny bits of mould appearing.....
Elegant Hotels investor fails to manage supply chain causing disruption to household food supplies. Can this man be trusted with investment choices?

Secondly, one of my green plastic garden chairs has fallen over as Storm Callum starts to take effect......
Elegant Hotels investor negligent in failure to take preemptive action to secure assets resulting in potential damage. Barbados once had strong winds, is this person fit & proper to manage any assets?

[lbo] 12/10/2018 07:08

https://www.theguardian.com/media/2018/oct/11/patisserie-valerie-crisis-rocks-luke-johnsons-business-career

[lbo] 11/10/2018 16:11

https://www.bis.org/review/r100211c.pdfTourism performanceAfter falling by 1.2% in 2008, tourism value-added plummeted by a further 8.7% in 2009

[lbo] 11/10/2018 16:07

Shauney you are incorrecthttps://barbadosfreepress.wordpress.com/2010/05/09/barbados-hotel-occupancy-down-27-during-our-peak-month/

[shauney2] 11/10/2018 14:54

No it didn't.I was there then.The year of the crash and all that.It was full of snowbirds from Canada.

[opodio] 11/10/2018 13:02

market down turn in 2008 caused everyone to cancedl barbnados

[lbo] 11/10/2018 06:16

https://www.stockopedia.com/content/small-cap-value-report-thu-4-oct-2018-abdp-ehg-igp-dfs-boom-vle-404344/"Barbados tax changes - sounds like there isn't a problem as yet, but there might be in future? That's how I read this anyway""Although the big discount to NTAV suggests that the stock market thinks the property valuations are too high"