As CDL’s final offer for M&C in its entirety has satisfied the acceptance conditions in all respects.
The cancellation of all M&C’s shares listed on the LSE comes into effect today at 8.am.
Companies: Millennium & Copthorne Hotels
M&C’s largest shareholder City Development (65.2% of total capital) has made its final offer for M&C in its entirety at 685p in cash, which represents a 37% premium to the last closing price.
CDL believes that taking M&C private is in the best interest of all M&C shareholders.
H1 18 revenue came in at £477m (-1.6% yoy).
At constant currency, the company’s RevPAR remained flat compared to the same period last year.
Despite the good performance in North Asia and an improved RevPAR in New York, the figures were significantly impacted by the tough market conditions and ongoing refurbishments in the UK (RevPAR was down 15.1% in London).
Operating profit came in at £70m (vs. £69m in H1 17), mainly due to the continued operating loss in New York despite the RevPAR improvement.
Millennium & Copthorne’s independent directors and City Development Limited (CDL, which already holds 65.2%) have agreed on a price for a cash offer on the outstanding ordinary shares in M&C.
The 9M results showed a significant improvement compared with H1, mainly thanks to Brexit. Indeed, the fall in the value of sterling after the 23 June 2016 referendum generated exchange gains: £43m on reported revenue and £7m on profit before tax, or respectively +7% and +13%. Moreover, management saw some benefits in occupancy in London with more leisure travellers benefiting from sterling’s weakness. As a whole, in Q3, revenue increased by 17.1% and profit before tax by 27.8% and respectively +8.1% and +4.1% for 9M.
Millennium & Copthorne posted poor H1 16 results due to refurbishments in London and New York and difficult trading conditions in its main gateway cities: New York (RevPAR -8.6% lfl excluding ONE UN closed for refurbishment), London (-7.1% excluding Bailey’s) and Singapore (-10.2%) which totalled 80% of hotels’ sales in H1 16. The forex impact and property revenues helped total revenue to increase by 3.5% to £418m.
Operating profit decreased from £64m in H1 15 to £59m due to a drop in hotels’ results of £15m, mainly due to a deterioration in the losses in New York (£-10m vs £-2m in H1 2015).
Millennium & Copthorne posted poor Q3 15 results, due to adverse trading conditions in Asian hotels, in Singapore in particular. Group revenue slipped by 2.8%, due to weak RevPAR (-0.1% in Q3, -1.4% at constant FX) while Singapore (-6.6%) and Rest of Asia (-11.7%) combined recorded a 9.6% drop in RevPAR. The group also experienced falls in RevPAR in London (-0.2%) and New York (-2.6%), mainly attributable to room closures linked to refurbishment at Millennium Bailey’s Hotel and ONE UN in London and New York respectively. Australasia (27% of EBIT), which stood out in H1 15 (+15.9% in RevPAR), slowed down sharply, posting a 4.2% rise in RevPAR in Q3 due to a drop in occupancy (-0.8%). In 9m15, revenue grew by 3% (+0.8% LFL, +1.3% at constant FX), helped by the combined effect of hotel acquisitions, the opening of the Millennium in Tokyo (in December 2014) and the newly-refurbished rooms. Prices were up 2.5% but occupancy slipped by 2%. EBIT dropped by 22.5% in Q3 (-10.5% in 9m) due notably to a rise in operating expenses (+6% in Q3, +8% in 9m) while profit before tax fell by 28% in Q3 (-9.3% in 9m, -11.8% LFL), mostly due to the decline in the group’s Asian hotels which experienced increasing cost pressure compared to 9m14.
The H1 15 figures have been marked by challenging trading in many of M&C’s key markets. Reported figures for hotels (sales +7.7% in H1, -1.2% LFL) were strongly flattered by the contribution of the three hotels acquired in 2014 (London, Rome and New York) and by FX moves (+3% impact). Sterling notably had a positive FX impact on the group’s overseas income streams In H1 15, revenues rose by 0.5% LFL (+3.3% at constant FX, +2.7% LFL in Q1) which reflected weak RevPAR (-3.3% in H1 LFL, +0.8% reported). The hotel operations have experienced rate pressures across key cities and particularly in Singapore (-7.9% in H1) and the rest of Asia (-10.3%) which experienced a rise in room supply and lower demand. Also, the appreciation of the Singapore dollar against other Asian currencies has held back the recovery of visitors. Key cities including London (27% of EBIT) and New York (8% of EBIT) showed declining trends in RevPAR of -4.2% and -1.2% respectively (-6.4% for New York excluding the impact of the recently-acquired Novotel Times Square). In London, the main factor was the refurbishment of the Millennium Bailey’s Hotel. However, Australasia (27% of FY14 EBIT) performed strongly (+15.9% in RevPAR, +7.7% in prices), but EBIT was down 1.5% to £64m once again due to Asia while PBT rose by 6.9% (+2.9% LFL), helped by a higher contribution from JV and associates.
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G4M has reported a substantial uplift in profitability, notably EBITDA margin >11% from <3%. While conditions in Q1 contributed through abnormally rich margin and marketing efficiency, results underline what G4M is capable of on higher volumes. We prudently upgrade by another 15% but note that it is well prepared for Brexit, has a continuing focus on higher margin products, is taking market share through digital innovation, and has ongoing software development at the core of its growth strategy. Valuation is extremely undemanding.
Companies: Gear4music (Holdings) PLC
Cambria has delivered a resilient set of FY results in very turbulent times for the automotive industry at present. Underlying EBIT was within 4% of last year (or 7% if IFRS 16 impact is stripped out) mainly driven by strong cost control and Government support. Cash generation and the balance sheet remains robust, and we continue to see Cambria as a strong survivor, albeit with more turbulent times ahead as we head into 2021 and beyond.
Companies: Cambria Automobiles Plc
N Brown is taking crucial steps in its transition to being a pure-play online retailer (currently 77% of sales) and to strengthen its leading position in the under-serviced market for fashionable plus-size apparel. While strategic updates may be on hold until a new CEO is appointed, the company closed the loss-making portfolio of high-street stores in H119 and further brand consolidation seems inevitable. The shares trade on a low FY19e P/E of 5.5x and yield 7.2%.
Companies: BWNG BGUA NBRNF
Although the group’s results have been heavily affected by the pandemic, the solid performance in the food business, the faster-than-expected online growth in the C&H business, and tightened cost management have all resulted in good cash generation.
The group’s rapid reactions to respond to the pandemic and improved operating efficiency have sent a positive signal to the market, and the downtrend has helped the group to reach the inflection point.
Companies: Marks and Spencer Group plc
Reporting a modest adj. PBT loss of £158k, H1-21A results to 30 September are as guided in SCHO's October update, but with cash slightly better than expected at £348k (anticipated: c.£300k). P&L results are also better than the company originally expected, helped by a strong online performance by Shapero Rare Books and SCHO's philatelic business. Net cash at these levels represents a £67k / 24% jump on the full year, while YoY the business has reversed a small level of net debt into a healthy cash balance. Stock standing at close to £9m is a significant plus both in underpinning the value of the business and in feeding trading flows for SCHO as a leader in a fragmented, but consolidating, market, where in our opinion the opportunity to take market share has seldom been greater.
Companies: Scholium Group Plc
Dart Group has released an AGM statement this morning indicating satisfaction with load factors and financial performance achieved year-to-date in the context of the challenging operating environment. In addition, the Group has applied to change its name to Jet2 Plc in recognition of the recent sale of the Fowler Welch distribution business and the sole focus on leisure travel. We keep our forecasts withdrawn at this time.
Companies: Jet2 PLC
The final results revealed adjusted PBT up 99% year-on-year, which was 10% better than forecast despite four upgrades during the financial year. This strong performance reflects the financial benefits that have accrued following the shift in the business model to online only, as well as management’s strategic decision to significantly increase marketing spend. A second special dividend for the 2020 financial year has also been announced, reflecting the strong cash flow characteristics of the business model. Our 2021 profit forecast implies continuing momentum and a year-on-year increase in PBT of 86%. We raise our target price to 1050p.
Companies: Best of the Best plc
Flutter reported strong Q3 20 revenue growth of 30%, driven by broad-based growth across all segments, which more than offset the 2% decline in retail revenues and a 10% drop in poker revenue (within the PokerStars brand). Management now expects FY20 EBITDA of ~£1.14bn (£1.275-1.35bn ex-US EBITDA offset by the £160-180m loss in the US). Following the strong Q3 showing as well as the guidance upgrade, we will be raising our estimates.
Companies: Flutter Entertainment Plc
Gear4music (G4M) has delivered an outstanding set of interim results figures, based on its position as a beneficiary from the Covid restrictions across Europe. The previously disclosed 42% sales increase included new customer numbers jumping 52% over last year to just over 400,000, who will bring benefits over the medium- and longer-term. Performance increases and profit margins were leveraged going down the profit & loss account, with PBT of £4.9m delivered against last year’s small loss of £0.1m. With November seeing a continuation of strong trading patterns, G4M expects FY21E results to be ahead of recently upgraded market forecasts. We have consequently increased our EBITDA forecast by £1.1m (+9%) to £13.5m.
The UK-based low-cost carrier easyJet reported a pre-tax loss of £1.27bn in FY20. Funding needs seem to have been fulfilled to allow the wait for the plausible surge in demand next summer, despite the mediocre improvement in cash burn.
Companies: easyJet plc
The UK-based leading caterer reported its FY20 results, which missed the market’s expectations but indicated an ambitious margin forecast for Q1, despite the revenue recovery being with many unknowns.
Companies: Compass Group PLC
The French-based international hotel leader Accor today confirmed a lifestyle joint-venture and the full acquisition of sbe, a lifestyle operator.
Companies: Accor SA
Profit performance in the year to Aug’20 was robust and ahead of general expectations. This includes cashflow and year-end net cash of £3.5m which is not flattered by deferrals, having kept payables up to date in Q4. Following a cost reduction project in August, the business is lean and agile, and well placed to navigate the uncertainties ahead including lock-down 2.0, prior to which it had traded well (incl. the all-important Sept period). Even in the absence of forecasts, valuation looks undemanding given the asset backing and recent track record.
Animal Health is a vast market with multiple long-term growth characteristics and opportunities. In this report we have outlined valuations, M&A activity and the key growth drivers in two animal health subsectors: companion animal health and livestock health. Although the commercial positioning of the eight companies covered in this report (Animalcare, Anpario, Benchmark Holdings, CVS Group, Dechra, ECO Animal Health, Genus and Pets at Home) differ significantly, all have exposure to positive market trends.
Companies: GNS ANCR CVSG DPH BMK EAH ANP PETS
Motorpoint has this morning released a solid set of interim results achieving adjusted PBT for the first half of £10.5m, in line with our forecasts, which we updated following a positive trading update in October. We leave our forecasts unchanged for the full year and expect adj. PBT of £20.3m in FY18E. The company has also announced this morning a £10m share buyback programme, signaling confidence in the future prospects of the business. While Motorpoint continues to trade at a premium to the franchised dealers, the company has a robust balance sheet, good underlying cash generation and confidence in the near-term earnings.
Companies: Motorpoint Group Plc