Leading entertainment, hospitality and leisure company Amalgamated Holdings Limited (ASX:AHD) has released a solid set of half year numbers.
For the six months ending 31 December 2014 revenues were flat at $570.5 million, however, net profit after tax (but before individually significant items) leapt 21.8% to $51.2 million.
The profit result equates to earnings per share of 32 cents per share (cps). The profit growth also led to a higher pay-out with the interim fully franked dividend increased from 15 cps in the prior corresponding period (pcp) to 16 cps.
Thredbo and Hotels perform strongly
Delving into the performances for the operating divisions of AHL, there were two key highlights –
- An outstanding ski season in Thredbo saw skier numbers increase by 15.1%. When coupled with cost containment this led to an 85.4% jump in earnings to $16.9 million from $9.1 million in the pcp.
- Meanwhile, the Hotels division, which includes the Rydges brand, increased occupancy by 2.4% and the average room rate by 2.3%. All up, the Hotels division increased earnings by 24.2% to $23.2 million.
The one black mark against the group's results was a 9.4% decline from the Entertainment division which reported a drop in earnings from $27.3 million to $24.8 million. The earnings slip was caused by "a soft film line up in the first quarter of 2014/15" in Australia which didn't help admissions revenue or screen advertising revenue.
Buy, Hold, or Sell?
Unfortunately no guidance was provided by management, however, based on research provided by Morningstar, AHL is forecast to earn 57.8 cps and to pay a dividend of 44.3 cps for the full year. Given the results for the first half, this would appear achievable.
With the shares treading water at $11.73 post results release, those buying today are paying a forecast price-to-earnings ratio of 20.3x and yield of 3.8%. Compared with its peer Village Roadshow Ltd (ASX: VRL) this would appear to put AHL on the expensive side.
