MCK - Millennium & Copthorne Hotels.

[peat]

pretty good writeup of these two MCK and CDL by Brian Gaynor behind the paywall in BusinessDesk. https://businessdesk.co.nz/article/b...r-listings-but

CDL Investments, which has a sharemarket value of $224 million at its current 80 cents share price, is arguably the most efficient company on the NZX.
It has had 10 consecutive years of profit growth but has only three full-time employees, three board meetings each year and no debt


Millennium & Copthorne has a sharemarket value of $190 million at $1.80 a share, a substantial discount on its December 2019 net asset backing of $4.52 a share.


Way too much history in the article , scouring the past of these two back door listings - some of us will know those names Euro-Nat, Renouf and Ariadne and find it interesting - young folk , not so much.

[beetills]

They used to mail out a shareholder discount card , but with the advent of book a everything , air b n b getting 40% discount or whatever it was off the rack rate wasn’t that competitive . Never asked how many shares maybe a csn # , can’t remember .

Received my shareholder discount card with the interm report 2019..
''20%off the best available fully flexible rate applicable at time of booking""

[Sgt Pepper]

A pleasing but unexpected rise in share price, bought in at $1.80 two weeks ago now $ 1.94.

[WAIKEN]

The price is finally on the move, away from an irrational discount to NTA. Internal travel is now creating revenue for the hotels and this will increase as various bubbles are created with other safe countries. CDL will trade at a profit as people are still buying new houses. I believe the CDL profit and a modest full year loss for MCK could still result in a small profit for the current financial year. Also hotels planned by other parties are on hold and several hotels have shut down already- Hermitage in Mt Cook and Heritage in Hanmer. They are also in a strong position to survive a price war with competitors with their strong balance sheet.

I see a race up to 2.50 soon.

[LaserEyeKiwi]

Wow - this puppy can really swing in value with such low liquidity. Down 2% today on just $5k worth of daily trades.

At 5.5% dividend yield I’m getting very tempted to add more, but I would be going past my self imposed maximum exposure to any one stock.

[ratkin]

The price is finally on the move, away from an irrational discount to NTA. Internal travel is now creating revenue for the hotels and this will increase as various bubbles are created with other safe countries. CDL will trade at a profit as people are still buying new houses. I believe the CDL profit and a modest full year loss for MCK could still result in a small profit for the current financial year. Also hotels planned by other parties are on hold and several hotels have shut down already- Hermitage in Mt Cook and Heritage in Hanmer. They are also in a strong position to survive a price war with competitors with their strong balance sheet.

I see a race up to 2.50 soon.

Hotel occupancy aound the country is next to nothing, it will take more than a few kiwis taking a local break to make them viable. Only ones doing any good are those turned into covid incubation centres

[LaserEyeKiwi]

Hotel occupancy aound the country is next to nothing, it will take more than a few kiwis taking a local break to make them viable. Only ones doing any good are those turned into covid incubation centres

This in incorrect - Hotel occupancy in the main centers has increased significantly over the last month. You mention the Covid hotels - these are actually already a quarter of the large Auckland hotels (15 of 60), and they are all full with more hotels being considered now. What this means is that of course it is good for those hotel owners to have full hotels, but also it greatly reduces the number of rooms available in the city which in turn benefits the non-Covid hotels occupancy rates.

Regardless, MCK was expecting a much worse Lockdown environment when it gave updated 2020 full year guidance in which it still expected profitability, and there is little doubt the hotel operations are doing better than initially expected, and the extension of the government wage subsidy, favorable new depreciation & tax rules, and stopping of the new auckland council hotel fee is highly likely going to lead to better results than anticipated.

[LaserEyeKiwi]

Government today adds another 4 hotels / 1000+ beds to the border quarantine effort, and signaled more will be needed. One way or another things are turning out better than initially feared - a hotel is getting a massive long term bulk booking via the government, or it is in the ever decreasing pool of hotels open to the domestic market.

[LaserEyeKiwi]

At the daily CV press conference just now the air Marshall overseeing the managed isolation facilities Just blurted out that the government has signed 6 month long exclusive contracts with each hotel guaranteeing 100% occupancy. This is huge news for hotels participating (I’m guessing he wasn’t supposed to reveal this detail).

[LaserEyeKiwi]

Stock up 6% so far today