Research archive for CLH

City Lodge reported numbers for the half year to end December last week. This is the affordable segment of the market, it is not the "cheap" end of the market, in other words, a nice balance between quality and price. 900 Rand for the Tower Lodge on Special, per night, 1500 Rand a night for the Courtyard hotels, that is the going "Sandton" rate. Cape Town, the walk in rate for the V&A Waterfront is 1850 Rand per night, that is hardly "cheap".

Yesterday City Lodge released their 6 month results and earlier in the month they announced that they bought the remaining share of their Kenyan operations.

Yesterday afternoon we received full year results from City Lodge. It is always exciting to get results from a recommended stock, it reminds you whether you are on the right track or not. In this case I certainly think we are. And here is why.

Yesterday, just after the close we received a very good looking trading update from another one of our recommended stocks, City Lodge.

Yesterday City Lodge released their interim report for the six months ended 31 December 2012. I did this fairly detailed report titled City Lodge revised trading update, still good a few weeks ago when the trading update was released. It focused mainly on the property underpin and how the value increase has perked up the market cap and of course the yield has increased earnings. It also covers the fundamental analysis of the numbers.

Last year City Lodge came out with a trading update which suggested that normalised earnings per share for the six month period are expected to grow between 20% and 35% from the previous comparable period. That is great news but the estimation is wide. Yesterday we got some more clarity from the company.

Yesterday we received results from one of our recommended stocks which is always an exciting occasion here at Vestact. This time it was City Lodge who managed to grow revenues by 11% while normalised operating profit increased by 13%. Normalised headline earnings rose by 17% to 442.8c. Occupancies for the current year increased by 3% to 59% which is very encouraging. Remember we said that a small occupancy increase will result in a bigger earnings increase because of the big capacity ramp up? Well that is what we are seeing here.

On Tuesday afternoon we got a trading update from our preferred property/hotel company City Lodge. This update is for the year ended 30 June with the full results release expected in the middle of August.

There were a few company announcements yesterday that we missed, one specific to our City Lodge holding. We had of course been alerted to the fact that they, City Lodge were looking for a wider African footprint, wider than South Africa and Botswana, and what better place to start than in Nairobi. They bought into a family managed hotel, buying half exactly of a small company, Fairview Hotel Limited, that owns runs (and owns) two hotels in the Upper Hill area of Nairobi. Now that means nothing to me, absolutely nothing, because I do not know Nairobi at all, but there was some useful insight from a Kenyan chap down in Joburg who works for CNBC Africa, a fellow by the name of Larry Madowo, follow the link to see his twitter profile.

We saw results from one of our recommended stocks yesterday after, City Lodge reported their interim numbers to end December 2011. Reminder, the group has 52 hotels with 6440 rooms across four different brands. They opened two new hotels during the period, the Port Elizabeth Town Lodge and a City Lodge in Hatfield. There are some encouraging signs at last, we were aware that the general backdrop for the hotel industry was improving, but this confirms that. Occupancies rose ever so slightly from 59 to 60 percent. What the group points out, is that the corresponding period (six months to end December 2010) included two weeks of World Cup trade. City Lodge say that their hotels continue to gain market share and wait for it: "...the last quarter of calendar 2011 produced stronger occupancies than in the same months a year earlier, the first time that this has happened since early 2008."

City Lodge released their full year numbers to June 2011 on Friday afternoon. A bit of a strange time to be releasing results, but there you go, Friday afternoon, we were here at our desks. We knew that they were going to look a whole lot worse than the time before, that was telegraphed. It is a measure of the economy, the company caters for business travel. By absolute volumes, in rooms sold, the number is higher than this time last year, but because a whole lot of new rooms were built, occupancy levels have fallen sharply from 70 percent this time last year to 56 percent this time around.

Oh dear, we had City Lodge Hotels coming out with a disappointing trading update yesterday announcing that normalised headline earnings per share are anticipated to be between 30%-36% lower than the previous financial year. They don't go into anymore details other than that results will be released on or about the 12 August where we will get all the details. However it is our job to take this info and analyze it straight away, especially for a recommended stock like City Lodge.

One of our other recommended stocks, City Lodge (two in one day) reported interim numbers yesterday afternoon late. They were pretty much telegraphed to the market. First things first, the group now operates 52 hotels with 6440 rooms across the country. The first hotel was opened back in 1985 opposite the Sandton Clinic, you know, behind the Chicken Licken and opposite the new developments diagonally across from the Sandton Clinic. Those familiar with the area should know where I am talking about. The first manager of that hotel, Clifford Ross, now runs the group, having taken over the reins from founder Hans Enderle. Enderle still owns 10.5 percent of the company. As per the City Lodge website, the company is in the top 250 hotel chains in the world.

City Lodge, a recent addition to our portfolios, released a very iffy trading statement. I guess poor could be the better way to describe it, here is the official release: "diluted / undiluted headline and basic earnings per share for the six months ended 31 December 2010, which include the costs and effects of the BEE deal, are anticipated to be between 25% and 30% lower than the previous year." And without that impact: "Normalised headline earnings per share, which excludes the costs and effects of the BEE deal, are however anticipated to be between 15% and 20% lower than the previous year."

City Lodge results yesterday, they were pretty well telegraphed in a trading update not so long ago. 750 million Rands in sales. Earnings per share of 459 cps, dividends for the full year 327 cents, the final dividend showing a 12 percent increase on this time last year, but flat for the year. 1.7 times dividend cover, which is handsome by any measure, but lower than last year's 1.5 times, that is largely due to more debt as a result of a ramp up and an empowerment transaction. The board values the replacement cost of the buildings at 3.5 billion Rands,