THG 0.00% 79.5¢ thakral holdings group

hotel rooms on the rebound, the australian

  1. 75 Posts.

    http://www.theaustralian.news.com.au/business/story/0,28124,26115725-36418,00.html

    Good news for THG. Majority of thg's hotels are on the east coast + the majority of revenue comes from hotel operations. In the 09 annual report THG predicted flat earnings for 2010 (ie around $13m assuming no further property write downs). This was partially predicated on a further slide in earnings from hotel operations. If hotel operations improve then earnings should move back towards FY2008 levels. With the exception of '09 THG has always paid out increasing dividends ('04 6.00 '05 6.25 '06 6.50 '07 7.00 '08 7.00 '09 1.00). With profit recovered I think they will aim to restore investor confidence in their yields with a distribution of around 3.5 cps for FY10 - ie a yield of 8% at current prices. Assuming favourable markets THG would then move to get back to the 7 cps div level. For me, this (and a other factors like the price/nta ratio of <.5 and the renegotiated debt) makes THG a good medium term opportunity at current prices.

    food for thought, DYOR
 
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