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Thread: Skyline

  1. #41
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    New director appointed.

  2. #42
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    Preliminary profit announcement for the year ending 31 March 2015.

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    magnificent company $25.00 / share +++WOW !

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    Quote Originally Posted by whatsup View Post
    magnificent company $25.00 / share +++WOW !
    owned them when they were $4.00 a looooooong time ago, should have hung on to them one of the better ones that got away!

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    Looking at this compared to Tourism Holdings Ltd valuation, NZ's tourism story, Qtwn's story, their growth capex plans; I am gna have to pool some money in order to meet the minimum shareholding of $80k plus.
    Doubt the currently un-consented remarkables gondola will give much competition. Some capacity issues but what a good problem to have.

  7. #47
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    Quote Originally Posted by whatsup View Post
    magnificent company $25.00 / share +++WOW !
    Quote Originally Posted by Out to lunch View Post
    Looking at this compared to Tourism Holdings Ltd valuation, NZ's tourism story, Qtwn's story, their growth capex plans; I am gna have to pool some money in order to meet the minimum shareholding of $80k plus.
    Doubt the currently un-consented remarkables gondola will give much competition. Some capacity issues but what a good problem to have.
    Thanks for posting. I decided to run the ruler over them and had a good read of the last two annual reports. Stripping out property revaluations I have Skyline of a 2016 historical PE of 17.1, very close to where THL were trading the other day when I compared them, at $3.75 THL were on a historical PE of 17.5 then, forward 2017 forecast normalized PE, (extracting one-off costs and losses from new American acquisition) of 14.7.

    Things I really like about Skyline.

    1. Their moat. Even if there is another gondala eventually in Qtown I thinks this adds to the attractions at Qtown rather than stealing share from Skyline.
    1.a. Many of their other subsidiaries also have very good moats.
    2. Governance - They appear to be well governed with well respected long standing directors with huge experience in their field.
    3. I think the forward PE is very reasonable considering the moats and the rate on inbound tourism growth, currently growing at 12% per annum, up from 11% last year10% the year before...spot the trend

    Things I am ambivalent about
    1. The cost of the expansion at the gondola, yes they need to do it, (I was there twice last year and the gondola and restaurant is absolutely at max capacity) and this will be good for long term growth but in the short term the major cost and interruptions through the works programs will be bad for business. Early years return on investment of this new capex will be poor, it will take quite a few years for growth to catch up to more properly utilizing the expanded infrastructure. Great long term move though.
    2. Proposed Franz Joseph gondola - I really don't think many tourists have the time to travel there and the level of capex required is inconsistent in my view with the likely demand

    Things I am not keen on
    1. The whole unlisted thing. Volumes of transactions are very low, I always prefer a liquid market and would have a strong preference to see these on the NZX. Why aren't they, they're certainly big enough now.
    2. They are presently without a CEO who stepped down in October after serving since 2009. Why did he step down ? It wasn't explained by the company release, is there some conflict and serious debate about the future strategic direction ?
    3. From the limited information available on the unlisted website it would appear based on observation only that the stock would be in correction territory, (down more than 10% from its high of $25 since the CEO resigned / was pushed ?).
    4. I am not overtly keen on a minimum investment of 4,000 shares, although this sized investment is certainly well within my means and not an entirely unusual size for me in any one stock but in conjunction with liquidity concerns above I find this somewhat unattractive.

    Summing up - I would be very keen to invest a slightly more modest level that the current $88K requirement if they were listed on the NZX and had a good caliber new CEO on board and weren't in a downtrend, (trading below their 100 day MA). If these concerns change I would absolutely love the opportunity to be an investor as I am a true believer in the south island tourism growth story.
    If they get a quality new CEO and they stay unlisted and the downtrend reverses I might get on board anyway as I think this is a wonderful long term growth opportunity.
    Last edited by Beagle; 10-01-2017 at 11:50 AM.
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    Solid post Roger, I can't think of many risk mitigants arising from the liquidity issue or the CEO's abrupt exit.
    As a business, I would have viewed the PE for Skyline to be higher than THL (given the moats) however perhaps there is a valuation adjustment due to the liquidity issues? No idea how to put a value on that.
    Also for my valuation I did price:EBIT comparisons rather than EBITDA given the DA being a big part of a rental motor vehicle's operations.

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    Thanks Out to Lunch. For what its worth now the valuation models I used in investment analysis in University, (albeit that was a long time ago) used a risk premium of 2% for lack of liquidity. Brokers valuation models I have seen in recent years use 2-3% extra required rate of return for lack of liquidity. The unlisted thing does mitigate this to some extent but the lack of volume and infrequency of trading does render them as pretty illiquid in my view

    I think the moat aspect of Skyline's business is very attractive and substantially offsets the risk premium required from lack of liquidity, (at least from my point of view) so they deserve to trade on very similar multiples in my view, (which they are in a historical sense although its impossible to get a handle of Skyline's forward guidance as they don't say anything meaningful other than all business's trading above previous comparable period in their 13 December half yearly shareholder update). No half year accounts available ? CEO left / was pushed, why ?

    The other concern is the $100m capex for the major expansion of facilities at Queenstown. They admit return on investment won't be great at the start. One to hold for long term growth perhaps ?, but I'd love to see them listed on the NZX...get an instant PE boost of about two I reckon. Agree DA a big factor in rental motorhomes but also with helicopters in Skylines aviation subsidiaries.

    To the directors of Skyline, please list this on the NZX....access to cheap bond issue finance to fund future capex would be just one advantage. 50 years in business...surely its time to man-up and get into the big league with your company listing ! I'm going to keep an eye on this business as I do like it and believe the tourism growth story to N.Z. will only get stronger and stronger as there are fewer and fewer safe, clean and green countries in the world to visit.
    Last edited by Beagle; 10-01-2017 at 04:31 PM.
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    THL's multiple has improved and well SKYLINE's price is trending down! Now under $80k to get in on the minimum.
    News out today on retail spending - spending on tourism up and SI excl ChCh is up 6%.
    Went down to Qtwn recently, their mall is a bit dilapidated but a lot of activity at the gondola+luge.
    Back on tourism - AirNZ and Akl Airport reporting is robust, MCK price is going nuts, THL becoming a darling of the NZX, would love to see why SKYLINE is being pushed down, is it just on Roger's risks/threats noted above?

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    In the absence of any other replies I will weigh in again as I am definitely interested in the possibility of taking a stake this company.
    I really wonder why they don't list it on the NZX ? Market cap is well over $500m so would potentially go into the NZX50. The $100m expansion of the Queenstown gondola is a classic case in point as to one of the benefits. They could do a bond issue to fund this at say 6%. An instant 2-3 expansion in PE would reward all shareholders and improve liquidity for any of the large stakeholders who might be considering diversifying some of their investment elsewhere. I don't think maintaining the low cost listing on unlisted is really in shareholders best overall interests.

    I must do some further research on this when time allows as its getting closer to my buy price.

    Company has released a five year summary which is useful. Shows that historically the company has traded on a trailing PE of just 10, long run over many years. I presume this figure is based on the earnings inclusive of property revaluations but I will need to do some more work on older annual reports to validate this.

    Other than that what we have here is a clear downtrend as alluded to in my previous post. Perhaps shareholders are really worried about the huge expansion at the Queenstown gondola happening around the same time as a proposed new gondola that may come to fruition in the years ahead ? Have they found a new CEO yet ?
    Last edited by Beagle; 20-02-2017 at 12:01 PM.
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    Do they have the necessary spread of shareholdings to meet NZX listing requirements?

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    Quote Originally Posted by macduffy View Post
    Do they have the necessary spread of shareholdings to meet NZX listing requirements?
    From the 2016 Annual:
    SHAREHOLDING STATISTICS
    Distribution of Shareholders and Shareholdings
    Size of Holding Holders Shares %
    0 19,999 595 4,318,224 12.65%
    20,000 69,999 120 4,199,610 12.30%
    70,000 199,999 33 3,549,765 10.40%
    200,000 499,999 18 4,758,082 13.94%
    500,000 + 16 17,311,698 50.71%
    ___ _________ _____
    Total 782 34,137,379 100%

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    Easy enough to attract lots of new shareholders to this growth company on a listing to the NZX.
    I think the minimum shareholding of 4,000 shares is definitely an impediment for many investors. I for one am reluctant to have circa $80K tied up in a company that is only semi liquid.
    Had a dig around to see if there's anything more current on the proposed other Gondola in Queenstown. Can't see anything more current than this
    http://www.nzherald.co.nz/business/n...ectid=11548441
    $100m a fair bit for Skyline to spend on redevelopment of their gondola and related facilities when there's another proposed gondola in the wings.
    Maybe a less ambitious project along with a price rise for customers is a better way to cope with foreseeable growth ?
    I guess the question is could that $100m generate superior returns invested elsewhere ? For instance their latest $20m luge seems to be off to a flying start.
    http://www.unlisted.co.nz/uPublic/do...ith%20logo.pdf
    Last edited by Beagle; 20-02-2017 at 06:11 PM.
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    Quote Originally Posted by Roger View Post
    In the absence of any other replies I will weigh in again as I am definitely interested in the possibility of taking a stake this company.
    I really wonder why they don't list it on the NZX ? Market cap is well over $500m so would potentially go into the NZX50. The $100m expansion of the Queenstown gondola is a classic case in point as to one of the benefits. They could do a bond issue to fund this at say 6%. An instant 2-3 expansion in PE would reward all shareholders and improve liquidity for any of the large stakeholders who might be considering diversifying some of their investment elsewhere. I don't think maintaining the low cost listing on unlisted is really in shareholders best overall interests.

    I must do some further research on this when time allows as its getting closer to my buy price.

    Company has released a five year summary which is useful. Shows that historically the company has traded on a trailing PE of just 10, long run over many years. I presume this figure is based on the earnings inclusive of property revaluations but I will need to do some more work on older annual reports to validate this.

    Other than that what we have here is a clear downtrend as alluded to in my previous post. Perhaps shareholders are really worried about the huge expansion at the Queenstown gondola happening around the same time as a proposed new gondola that may come to fruition in the years ahead ? Have they found a new CEO yet ?
    yeah same

    I'm at the financial position where I can take a on a few alternate type investments, i would be keen to either invest in skyline or christchurch adventure park (they are doing a 2nd phase of capital raising), so that my mountain bike trips will be (partially at least) tax deductible...I'm doing site visits of my investments!

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    Hounds been digging some more. Interestingly the decline in share price from about $25 late last year began about the time the CEO resigned, (was pushed ?) but also coincided with another significant event.
    In the August 2016 press release regarding the proposed redevelopment of facilities at Queenstown the cost was estimated at $60m.
    In the October 2016 update the cost was revised to $100m without any explanation of the 67% increase ?
    I would suggest my concerns expressed above about the level of capex for this redevelopment is also a serious concern the market holds. I think its poor form to put an estimate of the development cost into the market and then revise it up that much just two months later ! I doubt that impressed many shareholders.
    Last edited by Beagle; 23-02-2017 at 04:35 PM.
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    March 17 annual report is out - lots of positives in there - no debt
    An nzme article released about how Qtwn expansion consent is likely.
    CEO replaced
    MBIE have come out showing holiday spend in NZ is up 4% yoy 30 June - would be good to understand the demograph of Skyline customers so MBIE's analysis could be more helpful
    Korea development has shown its worth getting another site in there - I've heard that area of Korea gets a crazy amount of domestic tourism.
    From my last post the THL PE ratio (as a very rough comparison) has increased significantly, similar impact for SKYLINE?

    Just got to admire from a distance due to the ~$100k minimum shareholding. You can't margin lend, and I can't find any managed funds with significant exposure to this sexy company.

  18. #58
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    EPS stripping out property revaluations was $1.49 which at $24 puts them on a PE of 16.1. Annual report contains strongly worded warning regarding potential for disruption during the lengthy construction phase of the expanded facility at Queenstown and warns profit for the next five years may not be the same as for the last five years, Ouch !
    THL currently trading on a historical PE of 18.5 at $4.45 but due to report shortly.
    I think once THL report they'll be back on a similar PE and taking into account the profit warning and intense capex for Skyline including the need for a new multi story car park (not costed but I assume this is additional to the $100M estimated capex which might have gone up even more again ?)
    The whole slow disclosure and sort of old boys network thing at Skyline and lack of being listed on the NZX which is frankly quite absurd for a company with a market cap of ~ $800m leaves me pretty cold now having pontificated over it for a while now. No idea how good the new CEO is, not much about him in the annual report...I suppose if you were one of the elite insiders you would have got a more thorough run-down on his credentials. Too much about how this company is run is opaque. No longer interested and PE isn't cheap considering the profit warning.
    http://www.unlisted.co.nz/uPublic/do...ort%202017.pdf
    Last edited by Beagle; 19-08-2017 at 11:09 AM. Reason: Add link to annual report
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    Quote Originally Posted by Beagle View Post
    EPS stripping out property revaluations was $1.49 which at $24 puts them on a PE of 16.1. Annual report contains strongly worded warning regarding potential for disruption during the lengthy construction phase of the expanded facility at Queenstown and warns profit for the next five years may not be the same as for the last five years, Ouch !
    THL currently trading on a historical PE of 18.5 at $4.45 but due to report shortly.
    I think once THL report they'll be back on a similar PE and taking into account the profit warning and intense capex for Skyline including the need for a new multi story car park (not costed but I assume this is additional to the $100M estimated capex which might have gone up even more again ?)
    The whole slow disclosure and sort of old boys network thing at Skyline and lack of being listed on the NZX which is frankly quite absurd for a company with a market cap of ~ $800m leaves me pretty cold now having pontificated over it for a while now. No idea how good the new CEO is, not much about him in the annual report...I suppose if you were one of the elite insiders you would have got a more thorough run-down on his credentials. Too much about how this company is run is opaque. No longer interested and PE isn't cheap considering the profit warning.
    Thanks Beagle.Could be worth putting on the watch list over the next few years.Maybe some weakness coming up similar to SKC

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    Quote Originally Posted by kiora View Post
    Thanks Beagle.Could be worth putting on the watch list over the next few years.Maybe some weakness coming up similar to SKC
    You're welcome and yes that's pretty much how I see it too. Anyone's guess what the true cost of the major expansion at Queenstown including the Environment court mandated multi story carpark will eventually cost and the disruptive impact on the business but keep in mind in terms of the latter their Queenstown operation is very much like Sky City's Auckland operation, its the real breadwinner of the company results so my risk radar suggests the costs will be a lot higher than the $60m originally touted, very, very quickly changed to $100m and obviously now considerably north of that and the disruptive impact could be very significant.
    P.S. I think the Environment court were spot on to insist they build a substantial new carpark, car parking around the Gondola base is a real nightmare now and downstream car parking nightmare spreads right through Queenstown so its been long overdue that this company shoulders its fair share of the cost of this infrastructure.
    Long term I expect this will be another profit center for the company as I'm sure they'll be asking patrons to pay for parking.
    Last edited by Beagle; 19-08-2017 at 11:19 AM.
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