Hemas buys 7% extra stake in Serendib Hotels for Rs. 164 m
Thursday, 5 June 2014 01:14
Ricky Mendis sells down from 10% holding enjoying capital gain
In an apparent show of confidence in the booming leisure sector, Hemas Holdings Plc yesterday bought a further 7% stake in Serendib Hotels Plc (SHOT) for Rs. 164 million.
Hemas was already directly holding 21.8% and with yesterday’s acquisition the stake is estimated to be just above 29%. A related party, Leisure Asia Investments, is the other major shareholder of SHOT with a stake of 28.14%.
The deal was done at Rs. 30 per share at which price the counter closed up by 50 cents. Overall 5.85 million SHOT traded for Rs. 175.5 million.
The major seller yesterday via a crossing of 5.4 million shares was F.G.N. (Ricky) Mendis who as at 31 March 2014 was holding a 10% stake. Mendis first bought into SHOT in September 2012 with an 8% stake at Rs. 23 per share and later paid Rs. 28 for the balance.
Analysts expect Mendis to sell the remainder of his stake as well though this couldn’t be confirmed.
SHOT’s highest price in the quarter ended 31 March 2014 was Rs. 32 and closed the period at Rs. 28.
Trading on SHOT normal share saw its non voting share gain by 80 cents to Rs. 19.90 though on this volume.
The Serendib Leisure Hotels Group comprises of Serendib Hotels PLC and its subsidiaries Dolphin Hotels PLC, Sigiriya Hotels PLC and Serendib Leisure Management Ltd. The Group currently manages Avani Bentota Resort and Spa, Avani Kalutara Resort, Club Hotel Dolphin and Hotel Sigiriya with a consolidated inventory of 410 keys.
Serendib Hotels Group recorded revenue of Rs. 568 million for the fourth quarter of 2013/14 financial year, which was an increase of 14% over the corresponding period in 2012/13. This was mainly due to a 17% increase in the average Group ADR while further, the financial year closed with a revenue of Rs. 1.3 billion, which was only a 12% decrease over the previous year despite Club Hotel Dolphin and Hotel Sigiriya being closed for refurbishment for six months and three months respectively. The resultant decrease of room nights by 25% was however partially compensated by an average increase of 32% in room rates over the financial year.
During the year under review, SHOT successfully completed the refurbishment of Club Hotel Dolphin and renovated Hotel Sigiriya within the planned timelines and approved investment plans.
The Group earned a Profit Before Tax (PBT) of Rs. 240 m for the fourth quarter and closed the financial year with a PBT of Rs. 237 m, exceeding forecast, despite the closures for refurbishment mainly due to the better than expected pick-up in performance at Club Hotel Dolphin after the re-opening in November 2013 and the positive effect of hedging foreign currency loans.
All hotels in the Group recorded occupancies of over 80% in the fourth quarter except Hotel Sigiriya which exceeded the forecast, recording occupancy of 78%. The overall Group occupancy for the financial year was 76%.