Elegant Hotels Share Discussion Threads

[che7win] 19/10/2016 11:18

Oh come on LBO,
You really think Airbnb is the same market as Elegant hotels clientele?

We are talking high end luxury here.

[lbo] 15/10/2016 18:59

Yes the NAV looks good on paper but as we all know on AIM valuations have a tendency to be inflated by vested interests at times eg IPOs using stretched assumptions/valuation methods. We all know too well from past experience that asset prices are not fixed unlike debt and they can can fall as well as rise. Just look at Mar City Plc who supposedly was supported by a strong land bank NAV but later shareholders found out that was not the case and they lost a lot of money. Also were the Elegant hotels valuations carried out based on future cashflows? If so then as the cashflows are now falling then the asset values are now falling also. Also asset values are mostly just variable opinions at one given time by agents and based on many other assumptions so for example things like Zika or the risk of the IMF coming in would have a drastic effect on asset values like it did in many countries we all know who had to enter similar IMF programmes. You should always read the fine print on these valuations “Disruption of markets can arise due to unforeseen financial, macro-economic, legal, political or even natural events." So if anything changes eg a major fall in sterling then they all proviso that there is of course a reduced level of certainty that can be attached to any previous valuation. Also as I said before and posted links many other larger hotel groups that are not so narrowly geographically exposed to Zika and sterling still trade on significant discounts to NAV so why would Elegant who has trading problems be any different? It's also important to remember the hotel sector is approaching in Barbados may be approaching a cyclical peak and thus probably the reason why Vision Capital floated it and cashed in instead of running it for cash or selling it to a trade buyer. Barbados is already expecting an additional 2,300-rooms to come on stream, a 20 per cent increase in the accommodation currently available on the island. So it seems the only buyers at the Vision Capital valuations were the AIM market and that was not even for all their shares. And along with the glut of new construction and supply there is also the issue of Airbnb and villa rentals impacting occupancy and room rates on the island. But of course as always DYOR.

[che7win] 15/10/2016 18:43

Err, what about the 185p NAV.

[lbo] 15/10/2016 18:37

Says the poster who ironically refers to "balanced posters" yet prefers to subjectively attack me rather then act like an intelligent adult and discuss the objective facts and links about important external factors that are obviously effecting Elegnat Hotels! Or are you just the same poster posting under another free name? That's quite pathetic!

[orinocor] 15/10/2016 16:15

There are some good, well-balanced posters on here but LBO is definitely not one of them. He just seems to trawl the internet looking for every negative article he can find. Then he says its only the dividend that is stopping the share price collapsing without mentioning the share price has already collapsed 40%.

[lbo] 15/10/2016 15:48

Yeah I agree. I hear a lot of young couples are cancelling going to Barbados especially ones who are pregnant or planning a pregnancy in the next year. It's another major issue behind the fall in bookings that's beyond their control.

[sharw] 15/10/2016 15:36

The odd thing about yesterday's trading statement is that the word 'zika' did not appear once. Even without any currency concerns, health factors will be a determining factor in where they go for a fair proportion of people.

[lbo] 15/10/2016 10:49

Stockbrokers AJ Bell said 'around 70 per cent of its customers are from the UK' and if the pound – which is down about 17 per cent against the Bajan dollar since the referendum – 'it could be a resounding 'no' to an expensive Caribbean holiday'.

[lbo] 15/10/2016 10:25

About the same amount of times you can misspell "same thing to reach other"

Discussion is the whole point of the BBs on ADVFN. If you don't like it then leave or filter which is what I will be doing to you if posts like that are all you have to add!



Zika cases in UK travellers triple in a month as 100 new cases confirmed

The rise in cases is likely fuelled by people returning from trips to areas in South America and the Caribbean over the summer break.

Two thirds of cases have been in patients travelling to the Caribbean (68%), followed by South America (17%) and Central America (11%).

The largest number reported travel to Jamaica, followed by Barbados, St Lucia, Grenada and Trinidad and Tobago. In South America, most reported travel to Colombia, Brazil, Venezuela, Mexico and Nicaragua.

[sheep_herder] 14/10/2016 18:36

I wonder how many times you guys can repeat the same thing to reach other before I die of boredom. Get over it, you don't agree.

[lbo] 14/10/2016 17:22

Did the House broker not just significantly reduce room occupancy and rates? Do you define a cut in 2017 and 2018 forecasts by 29% and 24% a relatively positive future? And all this is even before Article 50 and a hard Brexit have been invoked or its full consequences on sterling or the UK economy have played out. All you have to do is go back to 2008-2009 and see the effects a weak sterling had on Barbados bookings. However on this occasion it's a different scenario and longer lasting uncertainty playing out with Brexit.

[salchow] 14/10/2016 16:46

From my post 192: "There will be some reduction in UK tourists because at the moment the holidays will be more expensive".

It is a question of degree. I don't think trading will be so disastrous that the long term success of the company should be questioned. Elegant Hotels and the broker (yes, I know they would say so) are relatively positive on the future. We shall see in a couple of years.

[lbo] 14/10/2016 15:27

Well you can believe what you like but it's totally contrary to what the Barbados Hotel and Tourism Association are saying and what Elegant Hotels are saying themselves and being borne out in the bookings.

[salchow] 14/10/2016 15:14

LBO - you knew what I meant or you wouldn't be sending me a report on the pegged Barbados dollar. Barbados, Bermuda, St Lucia, Grenada, etc - they all just merge into one another in my eye (even though I know Bermuda is not in the West Indies it is in the general direction).

As I have already said, the people I know who go to Barbados (or Bermuda) are not poor. If the price to Benidorm went up by 20% I can see that curtailing tourism. I don't think it will have the same effect on Barbados irrespective of what that report says. Just blame in on the Brexit. The hard version of which will be the best thing that has ever happened. In 5 years time you will be worrying that the pound is too strong.

[saucepan] 14/10/2016 15:10

che7win it did occur to me that a double bottom may form. However, I would prefer to see it first. Moreover, when double bottoms do form, the right cheek is often a tad lower than the left - i.e. creating a final capitulation.

On that basis, I think the odds favour it going lower still.

[mortimer7] 14/10/2016 14:52

This bit from 14th June 2016 Half year results statement:-

"The Group's property, excluding Waves, was valued at $235.5 million by CBRE as at 15 April 2015 which is greater than its value in these financial statements. The Waves Hotel & Spa property was recently valued by Terra Caribbean at $22.0 million which is the fair value used in the accounts. Using these valuations, the Group's properties would be valued at $257.5 million. Based on net debt of approximately $54.8 million as at 31 March 2016, this would equate to an implied net asset value (NAV) of approximately $202.7 million (228 cents per share and, based on an exchange rate of £1.00:$1.42, 161 pence share)".

And even better now as the Pound/Dollar rate about is £1.00:$1.22

[che7win] 14/10/2016 14:50

Maybe a double bottom here, it's where it bounced previously.

[saucepan] 14/10/2016 14:39

Some good discussion of the bullish and bearish case. However, what swings it for me at present is the chart. It is very ugly, and it is manifest that the market as a whole has not been convinced by today's update.

[lbo] 14/10/2016 14:32

Not sure you have any idea what you are talking about! "Bermudian dollars" in Barbados? Maybe the real issue is Bajan Central bank has been printing the wrong currency all these years!

[che7win] 14/10/2016 14:29

Buying at 64.3p

[salchow] 14/10/2016 13:30

LBO, all a bit irrelevent but I am not sure why you say the dividend is being paid sooner rather than later. The final dividend for year to 30.09.16 is payable in February 2017, 5 months after the year end. Perfectly normal.

The Bermudian dollar is pegged to the US dollar so the fact that the debt is denominated in US dollars surely does not matter. The company is earning money in dollars which just for a short time is good news for UK shareholders (only for a short time because sterling will strengthen significantly in the future from its currently depressed level. There will be some reduction in UK tourists because at the moment the holidays will be more expensive but quite honestly the people I know who go to Barbados are not short of cash.

[lbo] 14/10/2016 11:02

Salchow I am sure you do want your share of profits but the debt is also due to start capital repayments in the new year and along with the fact that it's all floating rate and dollar denominated then it's interest costs will also be rising. Add in the falling eps and the rise in costs and cap ex going forward and we can all see why the dividend was paid sooner rather then later especially as it's probably the only thing supporting the share price at the moment.

[che7win] 14/10/2016 11:00

The pounds rocketing this morning :-)

[che7win] 14/10/2016 10:20

Thanks Dave, NAV is 184p, that's good.