Mantra on track, PAS weathers storm, TFS record, Greencross expands
AUSTRALIA’S second largest hotel and resort operator Mantra Group is on the hunt for acquisitions after notching up a profit consistent with its full year prospectus forecast.
Mantra, which debuted on the Australian Securities Exchange in June, says the accommodation industry is poised to grow in line with favourable supply and demand factors in full year 2015. The Sydney-based company said pro forma net profit was $31.2 million which was consistent with its full year prospectus forecast of $30.1 million.
Shares in the company jumped more than 5 per cent on the news.
Based on the group’s earning capability and cash flow position, Mantra chief executive Bob East said his company was well placed to take advantage of growth opportunities.
“We continue to strengthen our platforms and we are taking advantage of leading distribution capabilities and brand appeal,” Mr East said.
“These factors are also aiding our development team as they continue to sign new properties into the portfolio.”
The company expects to announce its first dividend for the six months to December 31.
Mantra reported a four per cent increase in pro forma revenue to $452.6 million, reflecting improved occupancy levels and average room rates as well as a focus on costs and improved efficiencies. However, statutory net profit was down $300,000 which was still higher than prospectus forecasts of $2.2 million.
The company added that it plans to target higher yielding corporate accounts and secure corporate contracts as well as expanding through the acquisition of properties in key CBD and leisure destinations in Australia, New Zealand and the south-east Asia region.
Between January and June 2014, Mantra Group added five new hotels to its network, including two in Brisbane, one in Melbourne, one in Wollongong and the first Peppers property in Bali.
At noon AEST Mantra shares were 12c, or 5.8 per cent, higher at $2.18.
The group’s shares debuted on the market at $1.85 two months ago.
Mantra Group manages and markets hotels and resorts on 114 properties in Australia, New Zealand and Indonesia under the brands Peppers, Mantra and BreakFree.
- AAP
PAS GROUP WEATHERS ‘PERFECT STORM’
THE fashion retailer behind the Review and Yarra Trail labels expects a significant boost to profits this year after weathering a “perfect storm”.
Newly listed retailer The PAS Group made a $12.97 million net profit in 2013-14, up 56 per cent on the year before.
The opening of 40 stores and new distribution deals with brands, including Slazenger, Everlast and DKNY Menswear, are expected to lift this year’s net profit to $17.7 million.
Those new stores are expected to offset any weakness in comparative sales growth.
Chief executive Eric Morris said the May federal budget and unseasonable warm weather in autumn and early winter had hit sales in the fourth quarter of 2013-14.
“It created the perfect storm for retailers because we had the warmer start to winter coupled with the federal budget which didn’t help consumer sentiment,” he said.
He said if there was a repeat of those warm weather conditions next year, PAS would try to ensure its stores were well-stocked with trans-seasonal clothes.
Women’s fashion label Review was the company’s strongest performing business.
But Mr Morris said brands with an older target market, such as Breakaway and Black Pepper, had large growth potential.
Pas Group’s net profit result for 2013-14 was boosted by a number of one-off significant items including a $7.6 million tax benefit.
Its underlying profit rose by 0.6 per cent to $16.8 million, which just beat the $16.6 million forecast made in its prospectus ahead of its June stock market listing.
- AAP
CHINA, INDIA, EUROPE TO DRIVE TFS GROWTH
AUSTRALIAN Sandalwood producer TFS Corporation expects China, India and Europe to drive strong demand for its wood and oil products following a bumper profit.
TFS achieved a record $82 million profit and announced that its ownership of Indian sandalwood plantations had increased by 52 per cent to 3,167 hectares.
Chief executive Frank Wilson said the company was continuing to increase its ownership of plantation assets after making significant progress across all areas of the business.
“We expect strong demand from core end markets in China, India and Europe for a range of natural and sustainable wood and oil products,” Mr Wilson said.
“Indeed, we expect these markets to bid for our products at pricing equal to or in excess of the pharmaceutical market.” TFS recently announced it will supply sandalwood oil to a pharmaceutical company owned by global giant Nestle.
Under a long-term supply agreement, the company will supply pharmaceutical grade oil to Nestle’s wholly owned dermatology group Galderma at $US4500 ($4868.81) per kilogram as it develops acne and eczema treatment products.
Mr Wilson said the company was confident that investors would benefit from the deal and that Galderma had the potential to consume a large proportion of TFS’s future oil.
TFS Corporation’s net profit after tax rose 48 per cent to $82.5 million, from $55.7 million a year earlier.
Revenue increased 13 per cent to $212.2 million.
TFS has also maintained its full year 2015 profit guidance of at least $70 million.
Mr Wilson has previously said the company expects to generate exports of $1 billion over the next decade as its oil fetches $5000 per kilogram.
TFS claims to be the world’s only supplier of pharmaceutical grade sandalwood oil and the world’s largest owner and manager of sustainable Indian sandalwood plantations.
- AAP
PETBARN OPERATOR CONTINUES TO EXPAND
PETCare specialist Greencross will continue to expand its retail and vet networks as its seeks to boost its market share in the fast growing sector.
Greencross is targeting a 20 per cent share of the market, up from its current share of 7.5 per cent.
It currently has 156 Petbarn and City Farmers stores across Australia, 26 Animates stores in New Zealand, and 116 vet practices.
In the current financial year it expects to open at least 15 new pet stores, in addition to the 42 City Farmers pet stores it bought in July.
So far this year, Greencross has opened five new stores.
The company also intends to buy more vet practices to generate an additional $15 million to $20 million in annual revenue.
Greencross has bought five vet practices so far in 2014-15, generating $4.1 million in annualised revenue.
Greencross made a net loss of $128 million in the year to June 30, down from a $7.8 million profit in the prior year, due to a $130 million impairment charge on goodwill arising from its merger with the owner of Petbarn and Animates.
Pro forma net profit, which excludes the goodwill writedown, rose 45 per cent to $21.6 million.
The company said it is finalising the terms of a customer loyalty program covering its vet services and all of its retailers. Shares in Greencross have been halted from trade ahead of an announcement of a sale of 16.6 per cent of Greencross shares to institutional investors by investment firm TPG Star.
They last traded at $10.
Source: The Australian - 29 August 2014
