Mantra shares have had a rollercoaster 2017, surging in January through March (and sliding as well) as speculation rose and fell that it could be facing a bid from private equity or a big global hotel chain.
The shares finally hit their 2017 high of $3.15 in late July, then fell sharply to a recent low of $2.71 earlier this month before regaining those losses to hit $3.65 in the middle of the month.
Since then the shares have resumed their now usual slide, and yesterday’s 2016-17 results added to the downward pressure, pushing lower by more than 6% at one stage before some buying trimmed the loss to 2% as the shares ended the day at $2.86.
The reason this time was a slightly weaker than forecast profit for the year to June as the company rode the fallout of the Dreamworld tragedy last October which saw four people killed in an accident on a ride.
Mantra is Australia’s biggest listed hotel and resort operator and it said underlying profit after tax was $47.2 million in the year to June – below market guidance of $48.5 million to $52.5 million – as its key Gold Coast hotels underperformed.
Underlying operating earnings of $101.2m were up 12.7%.
Forecasts for 2017-18 have operating earnings in the range of $107 million to $115 million, which isn’t all that much of an improvement, despite the Commonwealth games on the Gold Coast early next year.
Despite missing its net profit target, Mantra CEO Robert East said 1016-17 been a “good year”."The business is trading well. The operating environment is reasonable," he said.
Mr East said its Gold Coast Coast portfolio – which accounts for almost a quarter of its accommodation business (5000-plus rooms) – had been an underperformer.
"This [underperformance] was related to the tragedy at Dreamworld and its flow-on effects," Mr East said.
"We are starting see improvement in the market. The Commonwealth Games are on the Gold Coast early next year so its not a market we are nervous about. We are positive about the outlook moving forward," he said.
Mantra’s strongest leisure market was the Sunshine Coast with Tropical North Queensland also doing well. Over the year, revenue was up 13.7% or $82.9 million, to $689 million as it added six properties to take its portfolio to 128 including the Ala Moana resort in Hawaii.
Mantra paid a full year dividend of 11 cents a share, ip half a cent from 2015-16 with a final of 6 cents a share (up half a cent).