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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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  4. #44
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    magnificent company $25.00 / share +++WOW !

  5. #45
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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.
    Ecclesiastes 11:2: Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
    Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine

  8. #48
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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.

  9. #49
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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.
    Ecclesiastes 11:2: Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
    Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine

  10. #50
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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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