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$1.49 ardent leisure group

Mauro- this is not going to ever go back to $2.80- not in a long...

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iamtheoracle

1,688 Posts.

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25/02/17

14:28

Post #: 22902263
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Originally posted by Mauro ↑

If you experts can explain the share price and company valuation and how this is success then I'm all ears... if I have no place in owning shares then by all means you can buy them off market from me starting from $2.80... that's cheap yeah ... lol ... well the analysts that look at this as part of their day job have the following comments... but what would they know hey...

"But Thomas is facing some other headwinds with analysts becoming increasingly critical of Ardent’s aggressive expansion plans in the US. Despite the focus on its Australian theme parks and bowling alley business, Ardent is in the process of a shift which will see more than half its earnings come out of the US, following the sale of its health club business and the d’Albora marina business.

Ardent has been expanding its Main Event entertainment and leisure centres, which include bowling alleys and restaurants, from its base in Texas. It now has 32 centres in 12 states with plans to continue to increase to around 50 in the next two years.

Ardent announced this week that total revenue from the Main Event business was up by 35 per cent to $US102m ($132m), with earnings before interest, tax and depreciation up by 21 per cent to $US18.2m.

But analysts were worried at the news that the margins on the US business were under pressure and the revenue growth from existing centres was down by 2.9 per cent to $US68m over the half.

Like-for-like sales over December and January were down 4 per cent.

“We are concerned about the like-for-like sales deterioration at Main Event and continue to question whether the company has found the right balance between the speed of the rollout and execution at existing centres,” Citi said in an analyst report yesterday.

“We think Main Event’s issues are fixable and continue to see value in the Main Event rollout.”

But it downgraded its recommendation on the company to a sell with a target price of $1.55.

Bell Potter analyst John O’Shea said the Dreamworld writedowns could be “tolerated” but noted that Ardent’s guidance on its US business had softened in recent months. “We consider this highly significant as Main Event is central to the Ardent Leisure investment thesis,” O’Shea says.

Macquarie analysts described the result as “messy” with many different issues including Dreamworld, the temporary closure of its Kingpin Crown centre in the Crown casino in Melbourne for refurbishment and concern about its earnings from the US.

“With Main Event experiencing ongoing sales volatility and reduced earnings visibility, it is difficult to recommend recent share price weakness as a buying opportunity,” it says.

The group’s US chief executive, Charles Keegan, told analysts this week that the US market had been unexpectedly “choppy” and said his staff was “not happy” with the fall in comparative store revenues. Keegan said the restaurant business in the US was “challenging” but he said there was no simple answer for the softer margins on same-store sales given that the US economy was good and unemployment was low.

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Mauro- this is not going to ever go back to $2.80- not in a long time anyway. Current price is a good entry point if not already in the stock in my opinion. If I were you, I'd look to make my money back on something else. I had no luck with its g8 education and just forgot about it. Made my money back and more on retail food group. I'm currently taking a punt on Adairs, which has low debt and trading on a p/e multiple of 10x which is cheap.

Number 1 rule of investing is never to get emotionally involved in a stock- and you are in AAD

AAD Price at posting: $1.65 Sentiment: Buy Disclosure: Held
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