MANTRA MAKES GOOD ON ITS BIG SHARE RUN
Written on the 27 August 2015 by Jenna Rathbone
THE figures are in and Mantra Group (ASX:MTR) has proved why it is the Gold Coast's top performing share float of the past year by posting a $36.2 million profit in FY15.
The result compares to a minor loss of $323,000 a year ago and well ahead of the company's prospectus forecast of $32.6 million.
The Gold Coast-based hotel and accommodation group boosted revenue 9.7 per cent to $498.8 million, aided by expansion in both the corporate and leisure travel markets.
EBITDAI (earnings before interest, tax, depreciation, amortisation and impairments) has landed at $73.1 million for the year ending June 2015, an increase of nearly 20 per cent in FY14, and ahead of the $69.5 million prospectus projection.
Mantra shares held steady at $3.40 today following the news, however the company's market capitalisation has surged 90 per cent to $909 million since June last year after topping the magic $1 billion mark earlier this year.
The stellar rise in the company's value is tracking just ahead of another Gold Coast growth story, SurfStitch, which has seen its market worth lift 80 per cent to $435 million since December.
Mantra credits its growth to a capital raising of $56.7 million in March this year, and a strong focus on growth and development aimed at increasing its portfolio.
The company added 11 new properties in FY15 across its Peppers, Mantra and BreakFree brands, which grew total rooms available by 12.7 per cent.
Mantra Group secured its first CBD hotel under the Peppers brand, opened its largest hotels in Melbourne in January, added three properties to its Brisbane portfolio, added one property in Sydney CBD, increased by two properties in Tasmania, opened is second property in Bali and opened a redeveloped hotel in Christchurch CBD.
"This result reflects the strength of the performance of the business in FY15 driven by acquisitions, strong performances in each of the operating segments as well as an ongoing management focus on cost control and improved efficiencies in key areas of the business," says Mantra Group CEO Bob East.
The group saw strong CBD revenue growth of 15.3 per cent driven by an increase in revenue from higher booking volumes through central channels and increased management fees from new properties under management.
Resorts grew revenue by 2.5 per cent to $181.8 million.
With total assets of $601.4 million, net assets of $337.4 million and a strong cash flow, the group says it is well placed to continue delivering value in 2016.
"In the year ahead Mantra Group is well positioned to capitalise on growth and development via asset and investment opportunities and take advantage of its strong development pipeline and forecast growth in Australia's tourism sector aimed at increasing shareholder value," says East.
Five further properties have already been added in July 2015 including four ex-Outrigger resorts in Queensland, including two on the Gold Coast.
In addition, Soul in Surfers Paradise was added to the group's portfolio in the current financial year after Mantra Group secured the management rights to the tower earlier this year.
Properties scheduled to enter the portfolio in FY16 include Chevron Renaissance at Surfers Paradise, Mantra on Mary Brisbane, Hotel Richmont by Mantra Brisbane and Peppers Docklands Melbourne.
The group is paying a 5c final dividend, bringing the total fully franked dividend for FY15 to 10c a share.
As the second-largest accommodation operator in Australia, Mantra Group services more than two million guests a year and employs more than 4000 people.
The group's portfolio consists of 119 properties with more than 13,000 room across Australia, New Zealand and Indonesia.
Author: Jenna Rathbone
About: Jenna Rathbone is a Queensland-based journalist who writes on a range of issues including business and property affairs and social issues.Connect via: Twitter