Hellenic Carr. Share Discussion Threads

[rivaldo] 09/1/2003 17:51

HCL is stunning value itself though at present IMHO. At 44p the P/E for this year is 8 and for year ended April 2004 just 6.5. And that's per the most pessimistic broker. Dividend yield if you buy now, all to be paid in the next 7 months, is almost 7%.

RNS just out - Rights & Issues Investment Trust have bought another 325,000 shares, taking their total holding to 1,625,000 shares (5.23%).

[jouno] 08/1/2003 18:04

compare HCL with Urbium, Ultimate and others on a p/e basis and on gearing and you have the answer why this one has gone down...maybe good for the long-term but there's much better value out there at the moment..

[rivaldo] 08/1/2003 15:52

A trade of 832,000 shares has just gone through at 44p - 2.8% of the company. Can't be the Chairman unloading as we're in the closed period.

Talked to a director yesterday. Of course, there's the "they would say that wouldn't they" factor (plus being in the closed period), but he confirmed trading was solid and that further disposals had been made with more in the pipeline to reduce gearing.

With the company's freehold property asset backing (thus no lease rentals to pay) this is now even better value IMHO - and the director agreed that he too was puzzled about the current share price. Let's see if we get an RNS about today's trade.

[adrianrw] 08/1/2003 11:32

So the company have had a good Christmas - above expectations and the share price falls to its lowest ever - 45.5p.

And the response from the management of the company? - SILENCE

What a way to treat your shareholders

[rivaldo] 07/1/2003 11:33

Well, it appears the re-rating has happened - downwards! Glad I'm only in this small-time.

Miniscule trading volumes though, so I guess this shows what a couple of small sells in a relatively illiquid share can do. Anyone any clue? Seems to me that the North-West has escaped all the recent bad weather, so pubs should be trading better there than elsewhere. HCL now even better value as far as I can see, but will possibly drift until the interims in a couple of weeks.

[rivaldo] 05/1/2003 13:58

JonC,

Ta for the compliment.

The trading update was only released pretty late on Friday afternoon (when most of the City would be on their way home), so many people probably weren't aware of it yet (my broker to name but one!). I'm probably over-optimistic, but I'm hoping for a positive reaction tomorrow and an upswing prior to the interims announcement, not after it - so IMO waiting may not be an option.

R

[zapdos] 05/1/2003 11:34

I was in this before (see other thread) but took my profits a while back.

Have been looking at it again recently though, as I feel it is at a reasonable price, and offers encouraging prospects given the trading statement.

[jonc] 05/1/2003 09:45

rivaldo,

I have put it on a stock watch but your excellent first post clearly highlights the dangers ie gearing.

Will keep an eye on it.

JC

[rivaldo] 05/1/2003 09:42

Quick additional comment - note that even on the more pessimistic (non house broker!)forecast for y/e 28/04/04, HCL is only on a P/E of 7.6. Although there are worries about consumer spending, with such limited downside and an outstanding divi yield, I'd have thought this would be the type of share to be on people's buy lists in these markets, if only for the divi.

[rivaldo] 04/1/2003 17:54

Honeycombe Leisure is AIM-listed and manages 74 pubs within a 200-mile radius of Preston, mixed between town centres and market towns.

I feel now is the time to get into this share, as IMO it should be re-rated from the current 52p following a good trading statement a couple of days ago and the release of its interim results in the next 2-3 weeks. This re-rating might initially be upwards by 10-15%, but could be by as much as 100% over the next year if the news on gearing is good.

The most important measures are as follows:

P/E ratio

-EPS forecasts for y/e 28/04/03 range from 5.44p (Seymour Pierce) to 10p (W.de Broe)
-EPS forecasts for y/e 28/04/04 are from 6.81p to 11.5p as above.
-so with average EPS forecast of 9.15p for 28/4/04, the prospective P/E is less than 6.

Dividend yield

Estimates vary around 6% for the next couple of years. Interim of around 0.9p will be paid in March and final of around 2.1p in July (ex-div date). So if you buy now you'll earn more than inflation from the divi alone in the next 6 months.

Gearing

This has been reduced to 236% (around £42m) following the sale of one pub at above its book value. This is obviously high, but HCL differs from other pub operators as its property assets are 84% freehold, so asset backing is strong. Interest cover was 1.8 times at the last count and fast improving. Borrowings are being steadily reduced by a combination of operational cashflow and disposal of surplus assets including 6 non-core assets which should raise another £4m (also see below). Note in particulat that cashflow should be particularly good this year following the Manchester Commonwealth Games and the World Cup.

Above all, there have been a number of positives recently:
- on 3 Jan a trading statement saying that like-for-like sales over Xmas and New Year were up by 4%. Coming so close to the upcoming interims announcement, HCL would be duty bound to announce any underperformance against market expectations. It's therefore likely the interims will be good.
- On 25 September an AGM statement noted like-for-like sales up by 6% in the first 20 weeks of the period, plus improving margins. Also the grant of residential planning permission at 2 sites to be sold.
- HCL is initiating strategies to improve income without incurring significant expenses. For example, it procures and manages pubs for VCT-backed Nectar Taverns for management fees and a % of turnover, and it manages the bar operation for Jarvis at the Manchester student village. Both of these have been reported to be going well.
- Institutions recently took up £600,000 of shares at 66p to reduce gearing. You can therefore buy in at a 20% discount to those institutions.
- The FD bought 5,000 shares at 60p in August. OK, it's not exactly earth-shattering, but it always takes a lot for an FD to open his wallet.

HCL has in 2002 been a takeover target. The chairman owns 40% - if share price underperformance continues, will he be happy to keep HCL independent?

The share free float is also small (around 75% in Board and institutional hands). Any buying interest should see a quick response.

2 years ago these shares were at £1.25. Now 52p, they could retrace their recent 81p high following satisfactory interims. This sector is notable for its lower ratings, particularly in the current climate, but a prospective ratio of less than 6 is low nevertheless – a re-rating to 9 times would give rise to a more than 50% uplift. The risk is the gearing, but as noted, trading is strong, asset backing is good and management's debt reduction strategy is sound.

All IMHO/DYOR etc.

[adrianrw] 13/12/2002 00:57

Statements from the company are bound to be bouyant

Yet the share price continues to fall and the company have made no comment since the AGM

Blue Ice have just entered exactly the same target market as HCL and are led by a former employee of Devonshire - acquired by HCL and who has until recently worked as a consultant to HCL before setting up on his own.

Possibly shoooting ourselves in the foot?

[sinso] 25/9/2002 11:38

RNS Number:6156B
Honeycombe Leisure PLC
25 September 2002




25 September 2002


HONEYCOMBE LEISURE PLC

AGM STATEMENT


At Honeycombe Leisure ("Honeycombe"or "the Company") PLC's AGM held today (25th
September), Chairman Sandy Anderson made the following statement:

"I am pleased to report good progress with like-for-like sales for the first
twenty weeks of the current year, 6% above those achieved during the
corresponding period last year. In addition, unit-operating margins continue to
improve as the full benefit of the Devonshire acquisition synergies flow
through.

At the last set of results, I indicated that the Company would focus on reducing
gearing through a programme of disposals of both non-trading and selective
trading assets. The Company has recently completed the sale of The Old Pint Pot
in Salford to Burtonwood Brewery for #950,000, a figure substantially higher
than its book value. The Board expects to announce further disposals over the
next few months. In addition planning permission has been achieved for
residential developments on surplus outbuildings at two sites - Steeton Hall,
Keighley and The Royal Hotel in Kirby Lonsdale. The Company is actively
marketing these surplus assets.

The development of a third income stream - in addition to the Inns & Taverns and
Venue Bars Divisions - was announced with the signing of a management contract
with Nectar Taverns ("Nectar") on 26 July 2002. This will shortly begin to
contribute to Honeycombe, as contracts have been exchanged on the first Nectar
site, whilst further acquisitions are close to fruition. Additionally, the
student village site in Manchester, which Honeycombe manages on behalf of the
Jarvis University Partnerships Programme, has been refurbished and we look
forward to a positive response as the students return.

Whilst good progress has been made since the start of the year, the Board
remains fully focussed on the need to further reduce gearing and maximise
returns from the core estate."

[adrianrw] 27/8/2002 13:51

This share has more ups and downs than a roller coaster.

320,000 shares bought(?) today - somebody either has faith or knows something we don't.

[sinso] 21/8/2002 11:26

This builds nicely on the Nectar deal.




RNS Number:2304A
Honeycombe Leisure PLC
21 August 2002

21 August 2002


HONEYCOMBE LEISURE PLC

AGREEMENT WITH JARVIS

TO RUN MANCHESTER SITE



Honeycombe Leisure ("Honeycombe"), the North West-based pub operator, has signed
an agreement with Jarvis University Partnerships Programme, a division of Jarvis
plc, to run the bar operation at the Manchester Student Village. The agreement,
which covers an initial term of 5 years, further increases the number of outlets
Honeycombe manages within its management services division.



The village houses some 1,500 students, close to the Oxford Road bar circuit.
The bar will be refurbished and then re-launched in time for the new student
intake in September.



James Baer, Joint Chief Executive of Honeycombe Leisure plc, commented:



"We are pleased that Jarvis has given us the opportunity to fully develop the
potential of this excellent location. We will be working hard to ensure we
create an appealing and friendly environment to maximise the benefits for the
students, Jarvis and ourselves."



"This agreement extends the range of outlets covered by the management services
division, forming a third earnings stream alongside Inns & Taverns and Venue
Bars,

and builds on the recent agreement to manage and acquire outlets on behalf of
Nectar Taverns Plc."

[tiredoldbroker] 16/8/2002 08:36

Price has come back to 60-63 on very little volume, despite the company announcing a potentially lucrative management deal (as I suggested on 28 March '02). Because of the placing which accompanied the Nectar contract, forecast eps to 30.4.03 have been diluted to 8.7p, so the prospective p/e at 63p is just 7.24, which looks like an absolute steal.

The Nectar deal, and the fact that they are working on more like it, underpins eps growth for the years after 30.4.03. HCL has highly regarded management and a business plan which has been proven to work. Worth a look.

[adrianrw] 14/8/2002 15:24

Can anything save this company from being taken over now?

[adrianrw] 12/7/2002 11:45

Finance Director has left to be replaced by existing Financial Controller and not surprisingly share price falls again

Perhaps the company will reassure its shareholders soon - they need it!!

[adrianrw] 05/7/2002 14:53

Prliminary results should have been published yesterday - no sign of them though - price falling today - are 'we' in trouble?

[mpg] 27/5/2002 18:28

Price picking up nicely - could there be a predator anticipated ?

[adrianrw] 28/3/2002 14:13

Thanks tiredoldbroker

Perhaps this is the start of a run of good fortune for the company, certainly it seems to have things going for it.

Not quite back to the levels of late 2000 when they stood at £1.32 per share but you can't win them all!

Keep in touch on this one

[tiredoldbroker] 28/3/2002 13:41

Nice litle move today - more to come I think. There are several factors moving in the company's favour:

1. The impact on last year's figures of Foot & Mouth shouldn't be repeated

2. The full benefits from integrating the Devonshire Pub Co acquisition will show through

3. With nearly all outlets within a 2 hour drive of the Preston HQ, it should benefit from the Commonwealth Games in Manchester and any refurbishment of Blackpool as a gaming centre.

4. The fine tuning of the estate will continue, with further sales reducing gearing

5. Before too long, I think you'll find they announce the first of several pub management deals, which will increase the number of bars they manage without involving capital expenditure. This will benefit the whole group (better buying power means keener beer prices) and further increase margins.

Meanwhile, the company trades on a low p/e, based on the Williams de Broe forecast of 7.8p eps in the year to 30.4.02 and 8.9p to 30.4.03. Even after today's rise, at 73-77p the p/e is under 10 for the year ending next month, and only 8.65 prospectively.

Good value I reckon - mind you, I bought them last August at 56p, so I'm happy anyway.

[mpg] 18/3/2002 21:12

Many of it's pubs are in the Manchester area - should benefit from the Commonwealth games visitors.

[adrianrw] 04/3/2002 13:39

I think the time has come for this share to move upward. Needs someone 'big' to recommend a 'buy'

[martincc] 01/3/2002 11:51

Million shares + cross trade just gone through at 70p
Over 3% of the company, should get RNS in next few days?

[adrianrw] 28/2/2002 13:38

Some movement today - is this a good sign?