MCK - Millennium & Copthorne Hotels.

[percy]

An excellent result out today
Dividend increased 25% to 7.5 cps.
Outlook cautious.

[percy]

An excellent result out today
Dividend increased 25% to 7.5 cps.
Outlook cautious.

The cautious outlook has caused the sp to drop 17cents or 5.7%.

[BlackPeter]

The cautious outlook has caused the sp to drop 17cents or 5.7%.

No - this was just to accommodate my (should I say nearly predatory) bid at 2.81. Price already going up again ...

[percy]

No - this was just to accommodate my (should I say nearly predatory) bid at 2.81. Price already going up again ...

You are "well positioned"..............lol.

[BlackPeter]

double bottom @ $2.80?

MCK.jpg

This might be another chance to buy for less than $3 into a company with a NTA of $4.04, a PE of 9 (based on 2018 EPS and today's SP) a revenue CAGR of 10 and a Earnings CAGR of >20!

Assume market sentiment is currently a bit depressed due to the (quite unrelated) THL trouble. MCK runs hotels (Millenium and Copthorne) and owns real estate development (majority shareholder of CDL Investment).

Only big drawback I can see is the limited liquidity of the share market ...

[percy]

Take care.
Last announcement.Annual report.
Aucland Hotels.A lot of competition.Room tax and trouble getting staff, meant a poor outlook.
CDL property.Again a muted outlook.

Disc.I sold because of the poor outlook,and extremely low dividend yield.
Like you I added to my HGH holding.
.

[BlackPeter]

Take care.
Last announcement.Annual report.
Aucland Hotels.A lot of competition.Room tax and trouble getting staff, meant a poor outlook.
CDL property.Again a muted outlook.

Disc.I sold because of the poor outlook,and extremely low dividend yield.
Like you I added to my HGH holding.
.

Outlook from the latest annual report:

Although there are significant challenges
ahead, the Board is confident that MCK
will do well in 2019. We remain positive
about the year ahead and expect growth in
2019 although slower.

Does not sound like doomsday coming. Think as well that they are less impacted by tourism - Millenium and Copthorn are typically looking after business travelers (less cyclical and less cost sensitive). Thought as well that Auckland has still problems to host all the visitors for the America's cup - don't they?

So yes, growth will be slower, but it will happen.

Dividend yield: 2.7% - fully imputed, i.e it is net equivalent to a 3.6% bond; Agreed - not stellar, but better than some of the quasi-bond shares (AIA, FPH or similar) and comparable with recent BBB rated bonds (which don't offer the opportunity for capital appreciation).

[percy]

I have just reread The Chairman's Review.
I stand by my "take care" statement.
Very illiquid with 680 on the buy side ,and over 40,000 on the sell side.

[beetills]

Any body with any ideas what this may mean for MCK/CDL.
My opinion would be that they both disappear from the NZX unfortunately.

[BlackPeter]

Any body with any ideas what this may mean for MCK/CDL.
My opinion would be that they both disappear from the NZX unfortunately.

Not necessarily - the takeover offer is for the British company Millenium & Copthorne Hotels Plc, which is a majority shareholder of MCK which is a majority shareholder of CDI.

If this takeover goes through, than this does not change in itself anything for MCK and CDI, other that the majority shareholder of MCK has a new owner and board.

Obviously - it is possible that the new majority owner of MCK decides at some stage to make a takeover offer for MCK and / or CDI ... but this would be quite unrelated to the first takeover. If it happens than I would expect that both share prices would soar - both companies trade (despite being very profitable entities) well below their NTA's and at low PE's - and in a takeover they would need to commission an independent report.