Action Hotels (AHCG) continued its push into the Middle Eastern and Australian hotel markets last year, opening three new hotels in three new countries. That brought its total number of operational rooms to 2,181, a 40 per cent increase from the year before. Pre-opening and finance costs resulted in a net loss over the year of $6.3m (£4.9m), and higher debt pushed the loan-to-value ratio up from 49 per cent to 51 per cent. Despite a stable average overall occupancy rate of 76 per cent in mature hotels, there are reasons to be concerned about the estate.
That high occupancy was maintained by cutting prices at its Middle East hotels amid a climate of "global macroeconomic and political uncertainty", which together with new room openings pushed revenue per available room down to $61.50 compared with $71.10 in 2015.
Investment in developing new rooms, delays to new openings and depreciation charges hit cash profit margins, which fell from 37 per cent last year to 35 per cent in the reported period.
Analysts at Zeus Capital expect a loss after tax of $9.5m in FY2017 with a loss per share of 6.4p, recovering slightly in FY2018 with losses of $8.2m and 6.2p (from $6.3m and 3.1p losses in FY2016).
| ACTION HOTELS (AHCG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 38p | MARKET VALUE: | £56.1m | |
| TOUCH: | 37-39p | 12-MONTH HIGH: | 65p | LOW: 34p |
| DIVIDEND YIELD: | 5.9% | PE RATIO: | na | |
| NET ASSET VALUE: | 121ȼ | NET DEBT: | 117% | |
| Year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (ȼ) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 28.2 | -0.3 | -0.2 | nil |
| 2013 | 29.8 | -7.1 | -9.0 | 0.96 |
| 2014 | 37.6 | 2.2 | 1.3 | 2.17 |
| 2015 | 43.5 | 3.0 | 1.9 | 2.21 |
| 2016 | 53.1 | -6.3 | -4.0 | 2.26 |
| % change | +22 | -311 | -311 | +2 |
Ex-div: 25 May Payment: 15 Jun £1=$1.29 | ||||
