MCK - Millennium & Copthorne Hotels.

[Norwest]

A longer term view would say no better time than the present to ‘make improvements’ due to the low opportunity cost of minimal lost revenue as a result of disruption.

Absolutely agree, great time to be doing it.

I just came back from staying at the Copthorne Lakeview (not to be confused with Lakefront), I got the last room and it was fully booked, I even got a call the day I was arriving to make sure I was coming as they had a "wait list".

The hotel itself is in dire need of a complete refurbishment. That may be next after they complete the Millennium Hotel in Queenstown.

[LaserEyeKiwi]

ALERT: MCK will release results tomorrow!

OPERATIONAL UPDATE – 16 FEBRUARY 2021


Millennium & Copthorne Hotels New Zealand Limited (NZX:MCK) provides the following update with regard to the impact of the COVID Alert Level changes made by the New Zealand Government on Sunday evening:


--All of our owned and operated hotels have received multiple cancellations for bookings over this week and the following weeks in February. Some events which cannot be held under Level 2 and Level 3 restrictions have also had to be cancelled and, where possible, these have been postponed to a new date.


--The current number of cancellations and deferrals varies from hotel to hotel and these disruptions are impacting on MCK’s February 2021 revenue. Given that individual travellers and businesses are still adjusting and do not know how long the current restrictions will continue for, we are not presently able to forecast the exact impact on our H1 2021 financial performance from these cancellations.


--MCK will be releasing its FY2020 results tomorrow, 17 February 2021.

ENDS
Issued by Millennium & Copthorne Hotels New Zealand Limited

[LaserEyeKiwi]

Summary of results:
• Group revenue $172.0 million (2019: $229.7m)
• Profit before tax and non-controlling interests $50.9 million (2019: $85.4m)
• Profit after tax and non-controlling interests $46.0 million (2019: $49.7m)
• Shareholders’ funds excluding non-controlling interests $743.6 million (2019: $715.3m)
• Total assets $987.9 million (2019: $1,008.2m)
• Earnings per share (cents per share) 29.05 cents (2019: 31.39 cents)

MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LOOKS TO THE FUTURE AFTER “HORRID” 2020.


Millennium & Copthorne Hotels New Zealand Limited (NZX: MCK) today reported its preliminary results for the year ended 31 December 2020 and announced a profit after tax and attributable to owners of the parent of $46.0 million on total revenue of $172.0 million.


“Our results are not from our hotel operations, rather they reflect the contribution from our property development operations such as our majority-owned subsidiary CDL Investments and a significant tax credit which was recorded during the year”, said MCK’s Chair Colin Sim. “The headline numbers mask the fact that 2020 has been a horrid year overall for our hotel business and its impact will continue to be felt well into 2021 and beyond”, he said.


MCK’s hotel operations made a small profit before tax of $1.9 million in 2020, a decline of 94% on the previous year.


“It has been like owning a shop where over 70 percent of our customers were stopped from entering it”, said MCK’s Managing Director Mr. B K Chiu.

“Of course we are fully supportive of the health response over the course of 2020 but the fact is that our business was devastated. Our 2021 occupancy so far, especially in key tourist destinations, is significantly less than what we saw twelve months ago”, he said. “Nevertheless, our strong balance sheet and an agile organization sets us up to manage the new demands for recovery and to make future investment decisions” he added.

By comparison, MCK’s property development activities in 2020 were “remarkable” and as well as CDL Investments’ strong result, contributions also came from the sale of apartment units at the Zenith Residences in Sydney.


“Our property development activities will continue to be the critical element in bolstering MCK’s profitability for the foreseeable future and we’re committed to providing support as required to allow them to do well”, said Mr. Sim.


MCK also signaled that it was continuing to refurbish and reinvest in its properties and announced that major refurbishment works has been completed at Copthorne Hotel & Resort Queenstown Lakefront in Q4 last year and that works would shortly commence at Kingsgate Hotel Greymouth and Millennium Hotel Queenstown. Other hotels such as Millennium Hotel Rotorua would also be looked at for refurbishment during the course of 2021.


While MCK was profitable in 2020, the Board resolved not to declare a dividend for the 2020 year and will instead deploy the funds for refurbishment and reinvestment in its hotels. This will also allow MCK to ensure it has sufficient capital reserves to continue to trade as well as optimize its financial resources in its recovery runway objectives.


Speaking to the year ahead, Mr. Sim noted that trading conditions would continue to be difficult for MCK’s core business.


“While we don’t expect 2021 to be as bad operationally, things will remain difficult. Kiwis do have freedom of movement within New Zealand that is the envy of many other countries and they are travelling but a return to pre-COVID revenue levels and profitability within our hotel operations may be many Matariki away and will depend on factors that are completely outside our control”, he said.


“MCK has shown its resilience and its ability to survive during the toughest circumstances. We are cautiously optimistic about the future as we work towards a successful recovery.”




Summary of results:
• Group revenue $172.0 million (2019: $229.7m)
• Profit before tax and non-controlling interests $50.9 million (2019: $85.4m)
• Profit after tax and non-controlling interests $46.0 million (2019: $49.7m)
• Shareholders’ funds excluding non-controlling interests $743.6 million (2019: $715.3m)
• Total assets $987.9 million (2019: $1,008.2m)
• Earnings per share (cents per share) 29.05 cents (2019: 31.39 cents)




ENDS
Issued by Millennium & Copthorne Hotels New Zealand Limited Enquiries to:
B K Chiu
Managing Director
(09) 353 5058

[LaserEyeKiwi]

Fantastic EPS result: 29cps is a PE ratio of just 7.5x at current share price of $2.17c
Also look at the NTA: now at $4.70 in assets per share - meaning the stock is trading at just 46% of underlying asset value.

[BlackPeter]

Fantastic EPS result: 29cps is a PE ratio of just 7.5x at current share price of $2.17c
Also look at the NTA: now at $4.70 in assets per share - meaning the stock is trading at just 46% of underlying asset value.

You are right ... this looks like one of the Buffet type low price / high value games. Still suspect that SP might even drop a bit from here due to dividend cancellation - might be an opportunity to accumulate.

[porkandpuha]

You are right ... this looks like one of the Buffet type low price / high value games. Still suspect that SP might even drop a bit from here due to dividend cancellation - might be an opportunity to accumulate.

Surprised APL didn't get more attention last week based on this reasoning. It's trading at a premium on NTA and paying a dividend.

[BlackPeter]

Surprised APL didn't get more attention last week based on this reasoning. It's trading at a premium on NTA and paying a dividend.

APL? What APL do you mean and how is this related to MCK?

[LaserEyeKiwi]

Actually unless I'm missing something, the ex-cash PE ratio is now 4x.

there is $160 million net cash ($198 million cash minus $38 million in debt), and with only 158 million shares outstanding that equals a net cash amount of $1.01 per share!

With shares at $2.20, the ex-cash share price is $1.19c, so with 29c eps the PE multiple is just 4.1x currently.

[LaserEyeKiwi]

Seperate announcement of Leslie Preston being added tot eh MCK board. Could be an interesting development, with her experience as CEO of a holiday home management company. Might be an indication that MCK will explore some alternative business models for some of its Hotel properties perhaps.

MCK: Leslie Preston appointed to the Board

17/2/2021, 9:02 amADMINLESLIE PRESTON APPOINTED TO THE BOARD OF MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED

Millennium & Copthorne Hotels New Zealand Limited (NZX:MCK) advises that the Board has appointed Leslie Preston to its Board with effect from 1 March 2021.

Originally from New York, Leslie Preston founded Bachcare Holiday Homes (“Bachcare”) in 2003 and was CEO and a director until 2020. Under her leadership Bachcare grew to become the leading full-service holiday home rental management company in New Zealand and was named one of The World’s Top 20 Vacation Rental Companies in 2019.

“I am delighted that MCK has been able to appoint Leslie to the Board after a very careful and extensive search process. She is very well known in the industry and will bring her in-depth knowledge of the New Zealand markets as well as extensive commercial acumen to our company”, said MCK Chair Colin Sim.
Leslie has worked for KPMG Peat Marwick and Bankers Trust in the United States and for Boston Consulting Group and BellSouth / Vodafone in New Zealand. Her senior management experience has included roles in marketing, customer and corporate operations as well as business strategy. She holds an MBA from Stanford University Graduate School of Business and a BA (Cum Laude) from Franklin and Marshall College, Pennsylvania.

“I am pleased to be joining the Board of one of New Zealand’s hotel industry leaders and see this as another opportunity to contribute to the tourism sector especially in these very difficult times. I am therefore looking forward to helping MCK deal with the significant challenges ahead”, she said.

The Board has determined in accordance with NZX Listing Rules that Ms. Preston is an independent director. Ms. Preston will be seeking election at MCK’s 2021 Annual Meeting of shareholders which is scheduled for 25 May 2021.

[Rawz]

You are right ... this looks like one of the Buffet type low price / high value games. Still suspect that SP might even drop a bit from here due to dividend cancellation - might be an opportunity to accumulate.

The problem is basically the entire company is owned by some wealthy Malaysian family (by memory). 90% ownership sort of thing. So you can invest at low levels and only hope they complete a full takeover. Otherwise the shares a barely traded.