AAD - Leisure and Lifestyle

[KW]

This one has been mentioned (pretty much by just me) in my thread http://www.sharetrader.co.nz/showthread.php?8348-Great-Dividend-and-Growth-Stocks but its such an excellent stock that it really deserves its own thread (even if I am the only one commenting on it LOL).

It is a REIT with leisure assets - Dreamworld, gyms, boat marina, bowling, and entertainment centres (Main Event). For a stock that was primarily a yield play (traditional div yield of 9-10%) it is morphing into a more growth oriented stock courtesy of the continued expansion of the Goodlife gym and US Main Event businesses. Its yield is currently down to 5% (still respectable) but as its P/E is now 18 investors are looking for more.

Well, they've got it. AAD is now the largest non-franchised gym club chain in Australia. They are raising $50m to purchase the WA Fitness First business, and to accelerate the Main Event rollout in the US (targeting 35 locations by 2017, up from 15 today). Currently priced at $2.70 with a SPP taking place at $2.41. Gearing is 31%.

Earnings record is good, with 5 years of growth in earnings and dividends. Exposure to US assets means an earnings upside should the Australian $ ever drop.



Earnings (cents)
10.9
11.4
12.5
12.8
13


Dividends (cents)
14.3
10.8
11.5
11.7
12




6121

[stones]

Thats a hell of jump today (19cents or thereabouts) on a purchase of those WA gyms. Wish some other companies would have that movement when they takeover other companies etc. Not selling though.

[gazprom1]

Hi KW,

I recall investing 6 months ago and did ok. Should have kept it with the benefit of hindsight. Looked at it again today and it still looks attractive. I am looking for a long term hold so purchased some near the close today.

Thanks for bringing it to our attention again.

Cheers
Gaz

[ozzie]

Sometimes you get lucky - maybe they'll increase the amount they're accepting...

[Trigger]

With the share price reaching $2.83 today, the SPP at $2.41 is going to be massively oversubscribed. Bugger :mad ;:
This is why the sophisticated and wholesale investors who get first dibs on everything are the ones who make all the money. Retail investors get sweet FA.

With the current interest in AAD and the SP continuing to appreciate today, does this help underpin the share price post completion of the SPP? Or does it do the reverse and offer a more enticing opportunity for those issued the additional shares to cash them in at a quick premium, and perhaps pulling the SP back at the same time?

Disc: Hold, and looking to purchase more, but uncertain re impact of SPP and disparity with current SP.

[Trigger]

Thanks KW. With a month to go before they are traded I will back the current price appreciation to continue and purchase more. Price has got a little frisky in the last hour. Tomorrow then.

[Trigger]

Yes, a more objective approach and consistent with your thread on the Investment Strategies forum using TA to time entry/exit. I got a hell of a lot out of that discussion and should have posted as such earlier (RYM gone at 8.15 and SUM gone at 3.20). I will have a good look at the AAD chart tonight. Cheers.

[Trigger]

Up +10% in a couple of weeks. No pullback as yet, and not helped by two recent re-rates...UBS to 335. Waiting patiently to pounce on a few more. May now wait until rights trading commences later in the month.

[Omega]

I just got $8k refunded from $15k so about a 55% scale back.

Scale back was based on 12.25% of a shareholder’s number of shares held on the record date. The calculation method and increasing the SPP from $15m to $20m was commendable from AAD and much more equitable than a number of other SPP’s I have applied for.

[Omega]

Never ceases to amaze me why shareholders leave money on the table but always happy to grab a share of what they leave behind!

[gazprom1]

Still ripping along, making the $2.41 SPP price a month ago look like a ridiculous bargain. Happy holder, SPP buyer, and topper upper LOL

While I did not participate in the SPP (as was not a holder), I purchased in at $2.60-70 and very happy.

Thanks for bringing this to my attention KW - appreciate your input into ST.

Cheers
Gaz

[gazprom1]

Topped up at 302 today but wary of further selling.

KW - is the 50 day MA around $3.19??

Thanks
Gaz

[Joshuatree]

Wallop on big volume.Waiting for an op here still but looks ugly today low as $2.52 finished $2.59!. Heavy shorting? Main Event slowing ?

[Entrep]

Keenly waiting on the sidelines too.

[NZSilver]

Mixed result out today Profit/EPS down - some good (main event) some bad (WA health gyms) - market disliked down 13% to $2.40. It hasn't had a good time the last few months for AAD

[Joshuatree]

Have you sold up guys or ?

[NZSilver]

Yes still holding - pretty much bought at the top. Should have been keeping a closer eye on things but I thing it will come right long term + Drip ticking away in the background.

[Entrep]

Hi KW given the 50 EMA is about the cross the 200 and the SP is well below both, in the context of your comments below, when might you see a good time to enter? SP above the 50?

Thanks

[Joshuatree]

Fairmont Equities (who the hell are they) have a sell on AAD. But give me your opinion anyday KW

"We rated AAD a sell here at the start of November due to the breaking of the downtrend. We expected a tumble to the mid $2 levels, but clearly it’s also failed that level. Upon reassessment, we now place support for AAD closer to $2. With consensus targets still sitting above $2.60, we would consider waiting for those cheaper levels before deciding whether to buy again. Shares in the leisure asset company closed at $2.38 on February 25."

[Omega]

Having sold out around 6 months ago, my interest was reignited with recent pullback and was looking to get back in after 1st April for benefit of FDR. Today’s action has pre-empted my strategy and commenced buying but no-where near quick enough to get the early bird special of $1.75.

[steve fleming]

It might take the market a little while to get comfortable that a Woman's Weekly magazine editor can run a $1b company.

Not to say she can't do it, but it is a little left-field!

[Joshuatree]

Currently $1.97 15mill plus shares thru.

[Joshuatree]

Thats one ballsy new CEO.

[Westboy]

It might take the market a little while to get comfortable that a Woman's Weekly magazine editor can run a $1b company.

Not to say she can't do it, but it is a little left-field!

ROFLMAO

and she only has less than 13K units skin in the game!

something is wrong here and I am not sure what!!

[Westboy]

I have no issue with the gender of the CEO, I would just like to see a lot more skin in the game. Until we see the gym issues fixed it won't be getting any of my capital!

[Westboy]

I have no issue with the gender of the CEO, I would just like to see a lot more skin in the game. Until we see the gym issues fixed it won't be getting any of my capital!

[Joshuatree]

Group rev $444.9 mill up 17.2%
EBITDA $101.6 mill up 10.9%

Attention been focused on Main event .Goodlife Health clubs still under performing ;with my quick look tru. S/P up re 13% to $2.25 atm.

[NZSilver]

Still sitting around 2.25, market doesn't seem convinced and neither am I to be honest. I'm sure gym memberships are one of the first things people stop buying when things get tough.

Disc - still holding

[NZSilver]

FY results were not too bad, profit down but mainly due to revaluations/depreciation charges. REV up, EBITDA was up, cash flows increased, Has come back and is now sitting at 2.70ish cents. Paying a pretty tidy div of 12.5c. Hopefully they can continue to improve. Still in the red on this one, and one of the only stocks I still hold.

[DarkHorse]

Disappointing 13% fall today on release of quarterly results and AGM (albeit still up 21% since bought in march). Numbers look OK at first glance - Main Event continues to grow and Healthclubs turning around. Perhaps concern over mention of shifting focus from cost cutting to revenue growth and possible debt increase? Interested to see your comments.

[NZSilver]

Yeh I thought numbers looked good, planning to open more main events and gyms are turning around. I was surprised price was down.

[DarkHorse]

Likewise NZSilver, but less surprised on closer analysis. While the update mentions continued turnaround - from increased memberships and more higher-value long-term memberships, co numbers speak louder than words. Looking at annual results, Healthclubs Q3 EBITDA $6.5m increased to $7.2m Q4, but latest Q1 back down to $6.45, so margins must be falling again.

[Joshuatree]

T/H hopefully its the marina sale which has dragged on somewhat.

[NZSilver]

Turnaround, I'm still in the red but divs have been ticking in and going towards the drip

[Joshuatree]

14% up atm. I have KW to thank for originally bringing this to attention.
Full Year 2016 Results Presentation-AAD.AX (http://hotcopper.com.au/threads/2847666/)

[levin123]

Any holders still holding on? Will be a roller coaster few months.

Theme parks only account for around 25% of EBIT and that includes WWW and Skypoint. But there are more severe risks at play of course than a downturn in themepark attendance including loss of license and massive fine from health and safety regulators/law suit.

Thinking of taking a dip when the dust settles

[Joshuatree]

Yep holding on grimly. Terrible accident.4 dead on probably the slowest "safest" ride.

[babymonster]

i might buy some around 190 areas...

[levin123]

If we see a hit to 150 odd, will look at buying but I personally think support will hold around 190-200.

As things stand at $2, the worst case reduction in earnings is probably priced in. There's been ~30% fall in sp, yet Dreamworld accounts for less than this. There will be an investigation and probably a fine or some penalty, but ultimately the park will open again and will recover.

What I'm not so sure about, is that the original price of ~$2.80 represented fair value at the time. They sold the health clubs for $260m which by all accounts was a good price, and this money was earmarked for capex on the Main Event business. This is a high capex business, with long payback periods and PP&E that may age quite rapidly.

Where the dust settles remains to be seen, but AAD was trading at $2 in July, and I thought this was a bit expensi back then. Would love to be proven wrong though

[Joshuatree]

Not sure re location but Dream World could be prime real estate; carve it up for housing?.

[winner69]

She a good soul

http://www.smh.com.au/national/dreamworld-accident-ardent-leisure-chief-executive-deborah-thomas-donates-bonus-to-red-cross-20161027-gscgl4

[winner69]

This opinion piece and some of events highlighted in other articles highlights the ugly and bad side of corporates and their drive to maximise shareholder returns. Profits first ...at any cost

http://www.nzherald.co.nz/world/news/article.cfm?c_id=2&objectid=11737277

If I was a AAD shareholder i would be disgusted with my company's response .....but sadly at the end off the day, even for most shareholders, the share price is the most important thing there is

[Joshuatree]

What opinion piece are you referring to?

[winner69]

What opinion piece are you referring to?http://www.nzherald.co.nz/world/news/article.cfm?c_id=2&objectid=11737277

[Joshuatree]

Great idea imo ;a memorial day, just got the timing a little wrong; too early.
"Dreamworld bosses backflipped last night and announced that the park will no longer be reopening today, after initially saying they'd open the park for a memorial, with entry fees going to the Australian Red Cross and activities limited to smaller rides, animal attractions, and the water park."

[Beagle]

http://www.msn.com/en-nz/news/world/a-furious-mother-says-her-family-got-stuck-on-dreamworlds-thunder-river-rapids-two-weeks-ago/ar-AAjuBro?li=AA59FU&ocid=spartandhp

[Beagle]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11776459

[winner69]

Probably happens quite often but .....

http://www.stuff.co.nz/world/australia/90116709/reports-passengers-are-stuck-on-the-buzzsaw-ride-at-dreamworld

[percy]

Probably happens quite often but .....

http://www.stuff.co.nz/world/australia/90116709/reports-passengers-are-stuck-on-the-buzzsaw-ride-at-dreamworld

Bad news usually comes in threes.
What next?

[Joshuatree]

All good ;thats what happens when you have too many safety sensors now ehhh; world gone mad.
Anyway millions of chinese coming(direct flights from shanghai) and they know its gotta be way safer here then back home ; also the food and less obvious pollution.
http://www.brisbanetimes.com.au/que...rect-flights-to-shanghai-20161217-gtdayg.html (http://www.brisbanetimes.com.au/queensland/brisbane-comes-of-age-with-firstever-direct-flights-to-shanghai-20161217-gtdayg.html)

[Joshuatree]

Revenue higher than two previous months so the bottom could be in ; for the aus segment anyway.From 63% down in Dec to 44% down Jan to 33% down Feb on PCP.

[Joshuatree]

Maybe a buyout Brierly style,then flog it off to the Chinese? If you have a sub or know how to get behind the paywall, this article is suggestinghttp://www.afr.com/street-talk/investec-bankers-involved-in-ardent-leisure-buying-20170329-gv9ibd

I think this is an excerpt from it but haven't verified.I posted it on the ariadne thread.
"Listed car park owner Ariadne that is backed by corporate raider Gary Weiss is believed to have amassed a 4.9 per cent stake in the embattled theme park owner Ardent Leisure, according to sources, in what may be the precursor to a takeover.
Ardent was in play last year before a fatal tragedy at one of the rides at Ardent’s theme park Dreamworld.

So may be some arbitrage in this.
The Australian can reveal that US-based KSL Capital Partners had been working with investment bank Citi at the time to launch a takeover bid of Ardent, which had Bank of America Merrill Lynch providing defence advice.
However, whether the acquisition of the stake by Ariadne (ARA (http://markets.theaustralian.com.au/shares/ARA/ariadne-australia-limited)) is the precursor to a takeover remains unclear.
Shares in Ardent (AAD (http://markets.theaustralian.com.au/shares/AAD/ardent-leisure-group)), which was once managed by Macquarie Group, have crashed to $1.71 after trading at as much as $2.85 last year before the Dreamworld tragedy and are now viewed as undervalued.
Dr Weiss, who worked with Kiwi corporate raider Ron Brierley during the 1980s, is a director on the board of Ariadne as well as Premier Investments."

[Joshuatree]

Bugger me the chart is kissing the 60DMA:eek2:

[Joshuatree]

From The Australian

Ariadne’s trading in theme park owner Ardent Leisure is thought to have set off a frenzy among investment banks eager to capitalise on the action after it emerged yesterday that Citi’s agreement to defend the takeover target recently lapsed.

Investment bank Citi was close to former Ardent Leisure boss Greg Shaw, and its former banker Andrew Pears, who recently left the industry, was close to the company.

But while Citi defended Ardent last year, it is now understood that the latter had not engaged with the investment bank to become its adviser, despite suggestions last week that the bank was in its corner.

Market analysts believe that banks such as Goldman Sachs and Gresham could be pitching to the Ardent board for a role. However, the understanding is that the directors have opted not to call on the help of investment banks as Ariadne targets the owner of Dreamworld and SkyPoint Climb (pictured).

Ardent shares closed at $1.92 yesterday.

The company has rallied on hopes that Ariadne, whose board includes corporate raider Dr Gary Weiss, billionaire property developer Kevin Seymour and Sydney law firm founder David Baffsky, will launch a takeover bid for the group, which also owns bowling and entertainment centres in the US.

As revealed by The Australian online yesterday, Ariadne is believed to be amassing more shares in the business to grow its stake beyond 6 per cent.

Some are betting that the company, which owns car parks and other investments, will emerge with a stake of at least 10 per cent in Ardent.

Ardent Leisure yesterday said little about the raid on its register, commenting that it would take appropriate action on behalf of its shareholders.

Some believe that it has not yet reached out to its newest major shareholder, which is likely to be angling for a board seat on Ardent.

It is understood that Ariadne’s motivation for buying shares in Ardent is to work alongside the company to extract the best value, but it is not eager to buy the business outright any time soon.

There is a belief in the market that Ardent’s management and board were not extracting the best value out of the operation, with some critical of its expansion strategy for its entertainment centres in the US.

Analysts say that the business faces a dilemma because it needs to expand in the US to grow earnings, but the US-based arcades business that it wants to roll out further to secure more upside is becoming less, rather than more, profitable.

Ariadne has been working with Investec, and it is thought that the source of Ardent’s appeal is its ability to capitalise on the growing tourism market on the Gold Coast.

Ariadne invests in car park infrastructure, property and marinas and is also involved in investment management and financial services.

It has interests in NatureSeal, wealth manager Clearview and Hillgrove Resources

[NZSilver]

Thanks JT, i've been holding AAD for a while now, just DRIP ticking over, but on significant loss as bought over $3. Wonder if its worth buying more - more for a trade?

[Joshuatree]

http://cdn.newsapi.com.au/image/v1/b15cfa5f1173fee101292d8331613c3e?width=650

Im not confident enough t buy more as my analysing the figs skills are poor. How healthy and growing is Main Event re 46 % (piechart above)of their ebitda ?Ive been focusing too much on the theme park recovery which is only re 11% ebitda atp