Amalgamated Holdings: Result 2015
Recommendation
Having ventured to Thredbo for a team-bonding exercise last year – or at least a bit of skiing – we're delighted to take our slice of the credit for Amalgamated Holdings' 38% increase in net profit in 2015.
We had to wait until the end of reporting season, by which time the snow was pretty scratchy, but the 'outstanding 2014 ski season' more than doubled the profits from Amalgamated's Thredbo resort compared to the prior year, which was 'one of the worst on record'.
The number of skiers increased by 13%, but revenue increased by 23% as a result of the company's ability to raise prices on lift tickets and ski hire (ouch!). A reduction in electricity prices and more efficient snow-making also helped.
Year to 30 Jun | 2015 | 2014 | /(–) (%) |
---|---|---|---|
Revenue ($m) | 1,175 | 1,097 | 7 |
EBITDA ($m) | 234 | 177 | 32 |
D&A ($m) | 75 | 62 | 21 |
EBIT ($m) | 159 | 115 | 38 |
NPAT ($m) | 109 | 79 | 38 |
EPS (c) | 67.9 | 49.1 | 38 |
DPS (c) | 45* | 42 | 7 |
* 29 cents final dividend 8 cents special dividend, both fully franked, ex date 1 Sep |
The presence of Intelligent Investor's finest skiiers probably isn't a pre-requisite for similar results in future years, but the incidence of snowfall – or, in its absence, sufficiently cold nights to allow good snowmaking – undoubtedly is. As a result, profits from this business are likely to be as bumpy as the mogul fields on 'Funnel Web'.
Profits from Amalgamated's cinema chains in Australia, New Zealand and Germany, meanwhile, benefitted from Hollywood's preference for sequels over original content, with Fast and Furious 7, Jurassic World and The Avengers: Age of Ultron all proving very popular at the box office. Moviegoers' willingness to fork out an arm and a leg for popcorn and oversized cokes also helped.
Over the next three years Amalgamated will expand the number of its Australian cinema screens – either 100% owned or in its joint venture with Village Roadshow – by 13%, but the popularity of future movie releases will continue to determine this division's performance.
In its Hotels and Resorts division, revenue per room in the company's owned hotels increased by 6.3% as a result of increases in both occupancy rates and prices. The declines in both the Australian and New Zealand dollars against major foreign currencies helped due to their positive effect on inbound tourism.
The stock has risen 3% since Amalgamated hits the heights on 20 May 15 (Sell — $12.75) and we continue to recommend you SELL.