Mantra Group Ltd

MTR Details

Mantra Group Limited (ASX: MTR) has entered into an agreement to acquire The Art Series Hotel Group comprising a portfolio of seven luxury 4 - 5 Star unique hotels in popular cultural hubs in key Australian capital cities. The Art Series Acquisition consists of 7 properties under a combination of Leasehold and Management Letting Rights (MLR) operating models, over 1,000 hotel suites and apartments and many conference and event facilities, restaurants and luxury hotel style amenities, a well-recognized and unique luxury hotel brand and freehold title to key commercial lots, reception areas and offices. The purchase price of approximately $52.5 million (excluding transaction costs) will be funded via available cash and existing debt facilities. The acquisition is consistent with Mantra Group’s ongoing strategy to selectively secure sizeable acquisitions and this acquisition presents Mantra Group the opportunity to expand its portfolio with a luxury and unique portfolio of hotels in cultural hubs in key Australian capital cities.

The Art Series Acquisition is expected to contribute approximately $7 million in Underlying EBITDA in its first full year of ownership providing a material Underlying EBITDA uplift to the CBD segment. This includes The Chen, Box Hill which is expected to open in November 2017 and will be loss making in its first year of ownership. At stabilization, the portfolio is forecast to contribute between $8.5 million and $9 million in Underlying EBITDA. The impact of the Art Series Acquisition is expected to be immediately accretive to Underlying EPS. We give a “Buy” recommendation on the stock at the current price of $2.86

Blackmores Limited

BKL Details

Leadership Changes: The Blackmores Limited (ASX: BKL) has announced that Chief Executive Officer and Managing Director Christine Holgate will leave Blackmores on 29 September 2017, after nine years of stint at the Australia’s leading natural healthcare company. Further, the board has asked Director Marcus Blackmore to return from sabbatical to step in as Interim CEO till the Board appoints a new Chief Executive Officer, and announced that Stephen Chapman will continue as Chairman after the new CEO has been appointed. Marcus Blackmore will continue as a Director of the company with an added responsibility as Brand President. Recently, Blackmores has been appointed in a key leadership advisory role to the China Association for Quality Inspection (CAQI), a high-level non-profit Chinese organization with responsibility for product quality inspection. The recognition as Vice President Company of CAQI was fostered with the appointment of Peter Osborne, Blackmores Managing Director, Asia, as Vice Chairman of CAQI’s Advisory Committee, the first and only foreign citizen to hold a CAQI board position. Given the unpredictable behaviors of Chinese buyers and impact on company’s financials going forward, we maintain an “Expensive” recommendation on the stock at the current market price of $91.14

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