Mantra Group Ltd (ASX: MTR) booked in an impressive set of full-year results which exceeded forecasts provided when it recently listed on the ASX in June 2014.
For the year ended 30 June 2015, revenue increased 10% to $498.8 million compared to the prior corresponding period. Net profit after tax came in at $36.2 million equal to earnings per share of 14.2 cents. A 5 cent final dividend was declared, bringing total dividends for the year to 10 cents per share.
The stock opened at $3.70, 8% above yesterday's close, but despite the good result and dividend declaration it has since fallen and is trading below $3.40.
Mantra is a leading Australian accommodation owner and operator currently managing over 120 properties including hotels, resorts and serviced apartments across Australia, New Zealand, and Indonesia. The group reports three main business segments:
- CBD operates accommodation properties in capital cities throughout Australia. In FY15 revenue increased 15.3% to $272.3 million, total rooms available increased 12.7% to 1.6 million, whilst the occupancy rate and average rate per room saw minor increases around 1%.
- Resorts operates leisure retreats and resorts. Revenue increased by 2.5% to $181.8 million, total rooms available decreased 0.8% to 1.9 million whilst occupancy rates increased 5.9%.
- Central revenue and Distribution manages Mantra Group's in-house customer management, online booking services and digital marketing. Revenue increased 13.3% to $41.8 million.
Operating cash flow increased 133% to $59.1 million mainly due to lower finance and interest charges compared to the prior corresponding period. General operating expenses increased roughly in-line with revenue indicating that future revenue gains will be delivered by increasing the number of properties under management and increasing occupancy rates at its existing properties. Debt remained constant during the year at around $105 million.
The Mantra Group CEO Bob East provided the FY16 outlook stating that: "In the year ahead Mantra Group is well positioned to capitalise on growth and development via asset and investment opportunities" in strategically aligned CBD and leisure locations throughout Australia, New Zealand and Asia. Mr East said they would "take advantage of its strong development pipeline and forecast growth in Australia's tourism sector." Net profit for FY16 is forecast to climb 13% to $41 million.
Whether the group achieves this target is dependent on the Australian tourism and travel market. The depreciation of the Australian dollar against the other major currencies will likely result in more tourists hitting our shores which, combined with further additions to their property portfolio, could deliver the growth they are looking for.
The company is currently trading around $3.40 per share which puts it on a trailing price to earnings ratio of around 24 and a fully franked yield of 3%. The stock doesn't provide compelling value for me at these prices (considering the bargains currently available) and I'll be leaving it on my watchlist for now.
