 i don't think they'll go bust for one second, they could if necessary raise cash through equity but it's doubtful they'll need to do that even, as no bonds are due for repayment until 2022 (£400m I think) and the RCF has more than $1bn of headroom. So, the only threat is, if they don't meet their covenants (see the last RNS) on the RCF:
"The RCF has customary covenants in respect of interest cover and leverage ratio, tested at half year and full year on a trailing twelve month basis, the former requiring a ratio of EBITDA to net interest payable above 3.5:1 and the latter a ratio of Net Debt:EBITDA of below 3.5:1 on a "frozen GAAP" basis pre-IFRS 16. 2019 Net Debt:EBITDA ratio on that basis was 2.4x (with the IFRS 16 adjustment reducing EBITDA and Net Debt by approximately $70m and $440m respectively)."
As EBITDA will be... no more than $500m (?) and probably a lot less they will breach the latter covenant. Worst case scenario they lose the RCF and have to raise some cash?
I've assumed they have around a 50% revenue reduction this financial year, and, maybe 90% of expected booking thereafter (I just don't see us going back to the same level of economic activity regardless of how optimistic the believers in the 'V' shaped recovery are). The shares are no bargain but bust they are not. |
Looks like I may get the bounce I was waiting for to short,strange the stock market,everywhere on lockdown and shares start to bounce,however the damage to the economy is real and numerous people I know have lost their jobs,the last thing on peoples minds are holidays,this will be lucky to survive imo. |
Hotel beds have been offered to rough sleepers in London to help protect them against coronavirus.
About 300 rooms were made available this weekend to vulnerable people already known to homelessness charities as part of an initial trial.
London Mayor Sadiq Khan's office is working with Intercontinental Hotels Group (IHG) to block-book rooms at a discounted rate for the next 12 weeks. |
Agreed ,but I was expecting a bounce,may try to get in again if it does.with the amount of debt this has and hotels almost empty this is a very risky business. |
I think you should have run your short longer lingy. The drop is bad, but could get a lot worse. Without a massive quarantine or a bailout it could drop much further. |
Hit my target,may bounce here ,will look to short again higher up. |
it will go lower, they do not manage most of the hotels, their income is mainly driven from taking 10% of rooms revenue from franchise hotels. That is going to be at least 30% down Q2 and probably Q3, there will be many hotel owners who default. I know that a number of management companies are considering closing entire hotels. They are big in China and US plus Europe. |
Well I’m shorting this ,got a feeling it’s going to 3000 or lower. |
RBC Capital Markets upgrades to 'Sector Performer' tp 4500p |
Not sure how much this will affect this group,but there was someone on LBC radio yesterday saying that a really popular London hotel which is nearly always full is virtually empty. |
Looks like about 70% of their business is in the Americas, and the Americans have belatedly realised this is going to affect them too. They appear to operate, but not own, the assets, So presumably they benefit/suffer from operational gearing? And they have a fair chunk of debt. Hasn’t tumbled too far yet so could be a useful short to protect against portfolio downside. Marshall Wace have been building a short position over the last week or so. I think I might join them! |
Buying opportunity |
Star fund manager Terry Smith is 'pretty relaxed' over the impact of the coronavirus on Fundsmith Equity and confident his £19.3bn fund will rebound more quickly than the stock market in a crash.
Speaking at the annual general meeting for investors in his top-performing fund, the UK's largest, Citywire AAA-rated Smith acknowledged the impact the virus would have on the revenues generated in China by companies in the fund.
He added that the fund's holdings in companies involved in the travel industry, like airline reservation system operator Amadeus (AMA.MC), down 11% over the last week, and Intercontinental Hotels (IHG), 12% lower, would be hit 'quite substantially, at least in the near-term'. |
InterContinental Hotels:
JP Morgan reiterates underweight with a target price of 4,600p. |
1000 quarantined in a Spanish hotel after infested Italian discovered ! |
GOLDMAN RAISES INTERCONTINENTAL HOTELS TARGET TO 5600 (5550) PENCE - 'NEUTRAL' |
SOCGEN CUTS INTERCONTINENTAL HOTELS PRICE TARGET TO 5300 (5500) PENCE - 'HOLD' |
19th feb Deutsche hold tp 4860p
19th feb UBS sell tp 4400p
reiterations |
IC TIP UPDATES:
InterContinental Hotels Group (IHG) posted full-year results in line with expectations, with total revenue up 6.7 per cent to $4,627m from $4,337m. The company’s Greater China business was bitten by unrest in Hong Kong and the coronavirus, with revenue down 5.6 per cent in the region.
But the group secured 98,000 signings for rooms in 2019, with its total pipeline now standing at 283,000. Buy. |
VIDEO..
IHG’s CEO on Full-Year Earnings, Coronavirus, China Strategy |
InterContinental Hotels lost ground as its full-year results were in line with consensus expectations but revenue per available room remained weak
advfn |
Coronavirus LIVE: Heathrow Holiday Inn shut for WEEKS as hotel made huge isolation centre
A HOLIDAY INN at Heathrow Airport is set to become a coronavirus quarantine centre in a bid to control the spread of the killer bug in the UK.
The Government has block-booked the Holiday Inn Heathrow Ariel to house anyone arriving in the UK who risks spreading the deadly virus but has nowhere else to go to self-isolate. People will also be able to stay at the hotel while their coronavirus tests are carried out and the results are processed. |
Customisable watchlists with full streaming quotes from leading exchanges, such as LSE, NASDAQ, NYSE, AMEX, Bovespa, BIT and more.
Hot Features
Premium
