I can only say its a surprise that these shares are selling for what they are, What are the asset backing of them ?
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13,500 Skyline shares traded at $18.35 per share today - quite an uplift for the brave sole(s) who purchased at $10.00 and $12.00 per share in mid March.
Annual report for those interested:
https://www.usx.co.nz/uploads/paperc...pdf?1596398719
An interesting read. I think those paying $17 a share are incredibly "brave". No question the earnings of this company will be dramatically affected in the years ahead and I seriously doubt the share price is properly accounting for that.
One wonders how many years the Queenstown gondola expansion will be put on hold for ? Worth noting this was originally proposed at a cost of $60m many years ago in an environment of rapid growth but has since blown out to more than four times that figure at circa $250m and the world seems to have dramatically changed....perhaps for many, many years to come.
Page 13 is pretty interesting. There's a glaring error in the 2019 comparative figures showing total equity at a completely erroneous figure, something I would be deeply embarrassed about for a small private client and yet the directors signed off on this statement of financial position for a public company...did they read it ? Maybe I should be gracious enough to suggest it was an error with the printers ?
At least their liquidity position looks sound, assuming its stated correctly and there's not more basic errors in there somewhere.
I'm not in any hurry to visit Queenstown again but do miss the buffet at the top of the Gondola :(
Happy to leave this opportunity to others and good luck !
Skyline has put its Queenstown Hill gondola rebuilt project on hold:
https://www.odt.co.nz/regions/queens...s-being-paused
Shows that Skyline has serious concerns on the tourism rebuild once the borders open/vaccine is available. Delaying misses the opportunity to close while there is little patronage and also runs the risk of further price escalation. Sounds like they have already committed to the Gondola system purchase given the talk of storing it in containers until a decision is made to restart the project.
O’Connells pavilion rebuilt carrying on, not that they had much choice given they had already gutted it.
Overseas luge new projects had previously been placed on hold.
I visited Queenstown last week. Interestingly for the middle of ski season it was very quiet. Restaurants were doing their utmost to undercut competitors and even had people trying to cajole you into their premises for lunch and dinner. Went out for a pub dinner on Friday night (during level2) and was astounded to see that there were tables free and no need to book etc. Every accommodation outlet had a "vacancy" sign up etc etc. To be fair I have not seen Queenstown during normal times so had little to compare but my partner did say it was quieter than normal. For a holiday it was quite nice. Traffic flowed extremely well and out accommodation was affordable.
Thanks for your feedback blackcap.
From November 2017. I gave the board this advice for free ;)
In my view the last traded price of $17 does not in any way accurately reflect the headwinds faced by this company that are likely to prevail for years.
I see fair value a very long way south of there.
Hi Beagle, I'm thinking about going to the AGM. Do you have any burning questions? I had also noticed the "equity" issue on page 13, but wondered if it was my lack of accounting skills and not a mistake. Should the auditor have picked that up?
It appears that they will continue with tree felling and rock work at the base, but I think they are going to delay most of their redevelopment. Cheers
Hi Arthur,
What are they going to do if Covid charges tourism forever ? If we eventually get a vaccine that's maybe 50% effective people will still be substaintially less inclined to travel, especially long haul, won't they ? How did a project that was going to cost $60m ever get to about four times that price at about $250m in just a few short years and what might the eventual total cost be if it ever goes ahead ? Is there some price point where its simply not worth proceeding with ? What if in 3-5 years when the project starts proper, the projected cost has doubled to $500m ? Those might be good conversation starters at the annual meeting. I'd love to be a fly on the wall if you drop those questions on them :D