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MELIA HOTELS INTERNATIONAL
MELIA HOTELS INTERNATIONAL
Boosted by prices
08 Nov 16
Melia Hotels international published good 9M results marked by: - a 6.6% increase in consolidated revenue (excluding gains from the Real Estate division) supported by the improvement in the hotel business with a RevPAR increase of 9.9%, of which more than 80% is explained by price increases; - a rise in both EBITDA and EBIT (respectively +9.8% and 14.9%, excluding capital gains and the reversal of onerous contracts); - favourable progress in financial expenses (-43.1%) due to the €240m debt reduction (amortisation of the convertible bond and cash flow generation).
A solid RevPAR increase in the first half and still attractive perspectives
22 Sep 16
H1 16 revenues increased by 5.7% excluding asset sales, and EBITDA by 9.3%. RevPAR (+14.2%) benefited from higher prices mainly in Spain and Portugal. Total net debt decreased by €213m vs December 2015, mainly due to the capital increase (linked to the conversion of convertible bonds) and cash flow generation. The outlook for 2016 is positive thanks to the good evolution in Spain and Mediterranean region which will offset the delicate situation in Paris and the American division. The pipeline is good and in line with the 25 new hotels planned in 2016 and 16,623 new rooms expected in the coming years (+20% in comparison with 2015).
Good FY15 results, attractive perspectives for 2016
08 Mar 16
Hot Hotel business activity… Melia released strong FY15 results, reporting a 16% rise in sales and a 29% jump in EBITDA to €293.1m. The EBITDA margin improved by 170bp from 15.2% to 16.9%. Melia succeeded in offsetting a 14% rise in operating costs, resulting from a change in perimeter, the appreciation of the US dollar against the euro and the devaluation of the bolivar (Venezuela). Rental expenses soared by 14.3% due to the incorporation of new rental hotels. The Hotel business performed strongly, with a 15.1% rise in RevPAR (90% explained by prices, +15.8% excluding Venezuela) and a rise of 218bp in the hotel business margin in Owned & Leased (c.80% of sales, 68% of EBITDA). … not only attributable to resorts The Americas was the best performer (+20.6% in RevPAR), boosted by Mexico (+27.7%) which benefited from strong resorts (the Paradisus Cancun recorded a 35% rise in sales following the rebranding), notably with the Playa de Carmen which contributed $36m to EBITDA in FY15. Such a performance is largely due to a strengthening in RevPAR in Q4 (+33.4%, helped by the adjustment of the Venezuelan bolivar to the SICAD II exchange rate in December 2014 for the full year), which is explained by healthy trends in urban hotels (in premium Spain and Europe) and to the hot resorts in the Caribbean (+18% in RevPAR in Paradisus la Esmeralda) and the Canary Islands (RevPAR +23% in Gran Melia Palacio de Isora vs Q4 14, the resort contributed €17.5m in FY15, 20% above FY14’s). The FY15 performances were also shaped by the strong growth in European cities (+56% and +25% in RevPAR in Melia Milano and Melia Vienna) while Melia Milan has strongly benefited from the Milan World Expo. Urban Spain confirmed its recovery (+17.5% in RevPAR). €216m of debt reduction and lightened cost of debt Net debt was reduced by €216m to €769m (in line with the 2007 level) while the net debt ratio was eased to 2.6x, despite having invested €137m in properties, including the acquisition of a 58.5% stake in the owner of Melia Milano. The financing cost of debt was lowered by €36m to 44% of EBIT (vs 84% in FY14) but the average cost of debt decreased to a moderate 4.36% rate (vs 4.8% and 5.5% in FY14 and FY13 respectively). In 2015, the real estate business was boosted by asset rotation which included the disposal of Melia’s seven largest resorts in Spain (for €178m to a JV 80%-owned by Starwood Capital and 20% by Melia), the sale of the 875-room Calas de Mallorca resort for €23.6m and the 450-room Sol Falco in Menorca for €20m. Melia did not issue any asset disposal targets for FY16.
Q3 15 results above expectations but stretched valuation multiples
10 Nov 15
The 9m 15 results reflected the strengthening of Spanish cities' hotels, with a strong summer season in the Mediterranean. Melia reported a 51% rise yoy in net profit to €52.3m. The Hotel business reported a 10.7% rise in RevPAR (85% explained by prices). FX along with stable costs LFL provided support to the EBITDA which soared by 28.5% yoy to €255m (+15.9% excl. capital gains) while the EBITDA margin gained 209 basis points to 19.3%. America recorded strong RevPAR growth (+4.8% in RevPAR for owned/leased hotels), helped by Mexico (+7.4%) which benefited from remarkable performances at the Playa del Carmen and Paradisus Cancun (+30%) resorts. European cities performed strongly. Italy (+19.7% in RevPAR) was fuelled by Melia Milano (+48%), supported by events, while the UK (+4.2%, RevPAR +25% in ME London) and Germany (+5.9%) proved resilient despite the lack of major trade fairs for the latter. Premium Spain (luxury resorts and urban properties) confirmed the strong momentum in prices seen in Q2. ME Ibiza stood out (+38% in RevPAR, average summer rate per room of €500) while urban properties showed impressive figures (RevPAR +21% in Grand Melia Colon). France stood as an exception with RevPAR collapsing by 20.2% (-2.1% excl. La Defense). The Mediterranean resorts (+6.4% in RevPAR, 100% explained by prices) remained supportive while Spanish hotels also proved buoyant (RevPAR +11.2%) reflecting the continuing recovery in Spain in both the leisure and corporate segments. Recent booking trends point towards a very positive Q4 15 and Melia expects double-digit growth in RevPAR for FY15 (vs single-digit announced in H1, more than 2/3rds explained by prices).
Disappointing operating leverage amidst high market expectations
11 Sep 15
The hotel business helped Melia to report a strong H1 15 publication in terms of trading but the group's EBITDA margin (excl. capital gains) showed a timid improvement. Revenue growth confirmed the recovery of Spanish cities which resulted in a strong pricing power. Group revenue was up 19.2% on the back of an 11.5% rise in hotel RevPAR fuelled by price increases. The Americas (+30% in RevPAR) were buoyed by the Caribbean feeder market (+28.2% in RevPAR in resorts in Dominican Republic) and Mexico (+34.6%, including +37.8% at the Paradisus Cancun). The appreciation of the US dollar against the euro was also a big help. European cities performed strongly with record rates and RevPAR growth seen in Italy (+20% in RevPAR) and the UK (+15% in RevPAR at the ME London in spite of the appreciation of sterling). Premium hotels in Spain (+10% in RevPAR) benefited from the strategy on the luxury segment (+30% in RevPAR Gran Melia Marbella). RevPAR trends were also robust in Madrid (+10.2% in RevPAR due to increased airport business), Seville (+20.2%) and luxury resorts in the Balearics, while Barcelona recovered a positive trend. The Mediterranean region recorded a 7.8% rise in RevPAR (95% explained by price increases), fuelled by Spanish mainland coast hotels (+12.8%). Group underlying EBITDA rose by 22.1% but the EBITDA margin showed a limited improvement from 14% to 14.34%.
The Slide Rule
12 Jan 17
What is The Slide Rule? The Slide Rule has been designed to dramatically simplify the identification of the best companies in the UK small/mid-cap sector by making a quantitative assessment of the relative potential of each company. At its core, The Slide Rule aims to identify those companies that create genuine shareholder value through strong returns on capital and solid growth, but also present a value opportunity with the potential tailwind of earnings momentum. Companies are assessed within a Quality, Value, Growth and Momentum (QVGM) framework.
Retain forecasts for FY17E and FY18E
05 Oct 16
While LFL sales growth of 1.8% for the first 12 weeks of FY17 looked a little light, this was on the back of 2.8% growth in the prior period. H2 comps become easier to lap and Christmas bookings (festive trading comprises 15% of FY sales on average) are up 10% YoY.
EBITDA break-even reached, positive outlook
18 Jan 17
7digital’s FY16 revenues increased 7% y-o-y and EBITDA profitability was reached, as targeted, in Q4. New contract wins in FY16 set the stage for a stronger top-line performance in FY17 and we consider management’s reiterated target of operating profitability in FY17 as realistic. For an operationally geared growth company in its first year of profitability, the FY17e EV/EBITDA of c 12x looks attractive.
A year of expansion
17 Jan 17
Final results are broadly in line with our revised forecasts on most headline levels in what proved to be a difficult year for the Group. That said, it has significantly increased room capacity, which is now +40% ahead at the time of the IPO (+14.5% yoy), which improves its competitive position and offering. We are maintaining our headline forecasts, and with the dividend expected to be held for the foreseeable future producing an 8.7% yield with a NAV in excess of 180p, we continue to believe there is strong long term value offered at present.
Small Cap Breakfast
17 Jan 17
Global Energy Development (GED.L) — To be renamed Nautilus Marine Services. Schedule 1 from developer and seller of hydrocarbons and related products. Reverse takeover. Raising $10.5m via a convertible. Expected 9 Feb. Eco (Atlantic) Oil & Gas—TSX-V listed oil and gas exploration has announced its intention to float on AIM. Assets in Guyana and Namibia. Proposed £2m-£3m fundraise. Diversified Gas & Oil—According to LSE website first day of trading on AIM now expected for 30 January.