Mantra Group Ltd

MTR Details
Good results and rising tourism opportunity: Mantra Group Ltd (ASX: MTR) has recently reaffirmed its guidance for FY17 with underlying EBITDAI, NPAT and NPATA to be between $101.0m - $107.0m, $48.5m - $52.5m and $51.0m - $55.5m, respectively. The group expects FY2017 growth across the Resorts, CBD and CR&D segments. MTR earlier reported a 21.5% rise in total revenues for FY16 to $606.1 million. Underlying EBITDA grew 23% to $89.8 million while underlying profit was up 21.1% to $43.8 million, translating into EPS of 16.2 cents, a growth of 13.8%. The company declared dividend of 10.5 cents per share. During the year, the company added 11 properties, and currently their property portfolio has about 126 properties with 21,500 rooms under management across Australia, New Zealand, Indonesia and Hawaii. The company is Australia’s second-largest accommodation provider owing to the BreakFree, Mantra and Peppers brands, which are targeted at the budget, mid-range and luxury accommodation markets, respectively. The company with its portfolio size is in strong position to benefit from the rising trend of inbound tourism to Australia. The company is further planning to add 12 more properties to its portfolio during FY17 and FY18.
 

Demand Forecasts (Source: Company Reports)
 
Furthermore, group’s business model is different through its use of complex management agreements with property owners. The stock has fallen 8.43% in the last three months (as at November 17, 2016). We rate the stock as a “Buy” at the current market price of $ 3.22

 
MTR Daily Chart (Source: Thomson Reuters) 

Sealink Travel Group Ltd

SLK Details 
Strong portfolio:Sealink Travel Group Ltd (ASX: SLK), focused mainly on owning and operating commercial ferries as well as ferry tours, has reported for a strong FY16 performance. For FY16, SLK reported underlying profit of $23.1 million recording a rise of 141% while the group reported sales of $177.3 million. SLK achieved a near doubling of underlying earnings per share from 12.6 cents in 2015 to 24.4 cents in 2016 

FY16 Results (Source: Company Reports)
 
During the year, the group completed the acquisition of Transit Systems marine business and Captain Cook Cruises Western Australia. The market conditions have been indicated to be positive for the year and the prime focus of the group includes maximising utilisation for fleet of 73 vessels. The gearing remains relatively low at 33%, well below banking covenants. We rate the stock as a “Hold” at the current market price of $ 4.19

 
SLK Daily Chart (Source: Thomson Reuters) 

Skydive the Beach Group Ltd

SKB Details 
Acquisition to add value:Skydive the Beach Group Ltd (ASX: SKB) has completed the acquisition of Raging Thunder Adventures, an adventure tourism company based in Cairns, Queensland. The acquisition would cost the group $15.45 million and is expected to improve EBITDA of the group by $3 million per year. Raging Thunder Adventures offers white water rafting, canyoning, hot air ballooning and Barrier Reef cruises and activities. The adventure tourism is fastest growing segment of travel industry and the acquisition would benefit SKB to leverage upon the opportunities. For FY16, the company reported revenues of $58.5 million (up 122%) and $13.5 million EBITDA (up 123%). Post the year end, the company raised $15 million by share placement and acquired Wanaka Skydive and some associated assets. Considering the acquisition benefits to be realized in future, we recommend a “Hold” at the current market price of $ 0.61

 
SKB Daily Chart (Source: Thomson Reuters) 

Village Roadshow Ltd

VRL Details
Cinema Exhibition division continues to perform well:Village Roadshow Ltd (ASX: VRL) reported an EBITDA of $168.8 million and attributable net profit of $15.7 million, or $50.9 million before material items for FY16. VRL aims to enhance and grow its Cinema circuit. Two exciting new bar concepts in Victoria, with Roc’s at the Jam Factory and nineteenforty on the Rivoli Rooftop have been opened in FY17. The FY17 product line-up is strong and includes Rogue One: A Star Wars Story, Fantastic Beasts & Where to Find Them and The Lego Batman Movie. The Cinema Exhibition division is expected to deliver good results but the blend between first and second half results is said to differ to FY16. Film Distribution division is still challenged while standout titles included Mad Max: Fury Road on DVD and Blu Ray. Slowdown in DVD sales has impacted the division, with the industry down 4.3% over FY16. On the other hand, digital online sales are kicking off well. The company has implemented a number of initiatives including restructuring costs to reduce overhead and so forth, which would add value from FY17. The group completed a renewal of its film financing facilities for USD775 million until 2021. Trading at a strong dividend yield, we recommend the stock as a “Buy” at the current market price of $ 4.57

 
VRL Daily Chart (Source: Thomson Reuters)

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