Redcape has announced its first results since its listing in November, showing strong outcomes on the back of a string of acquisitions.
Redcape Hotel Group Management Ltd – responsible entity for publicly listed Redcape Hotel Group (ASX:RDC) – announced results for the first six months of FY19, ending 31 December 2018.
Highlights of the “1H19” report includes EBITDA up 13.8 per cent, and a lift in overall portfolio value to $1.06 billion.
Key to this was the divestment of the Belrose Hotel, for a reported 5.1 per cent premium to book value, and acquisition of six venues, with total purchase price of $158 million.
The acquisitions represent a 17.52 per cent addition to the portfolio by value, and are noted as largely responsible for the 17.5 per cent increase in revenue over the period compared to 1H18, to $142.6 million.
Gaming produces the lion’s share, representing 63.6 per cent of total revenue, up slightly on 1H18. On-premise (bar) earnings have increased more than two per cent, to 18.79 this time around.
Beyond moves into complementary sectors, such as the Group’s acquisition of the Australian Hotel & Brewery in July, RDC has undertaken refurbishment projects at its high-performing Eastwood and Leumeah Hotels, and is planning to deliver a “premier venue post refurbishment” at its Cabramatta Hotel.
The Group’s gearing remains at the lower end of the target range, at 37.5 per cent, and 1H19 sees distributable earnings of 4.3cps, which is on track to meet annual guidance of 8.8 – 9.0 cents per security.
Successfully listing 30 November, debuting at $1.04 per share, RDC closed today at 1.035, while Net Asset Value stands at $1.13 per security.
Redcape CEO Dan Brady says the “result was solid” given some variability in trade in the second quarter he sees as consistent with commentary on consumer sentiment.
“Redcape’s active approach to portfolio management aims to enhance the quality of the portfolio and its earnings. Our acquisition, repositioning and refurbishment programme is designed to ensure our venues deliver on our customers’ desires and maximise profit generation.
“Finally, we remain focused on securityholder returns and delivering predicable earnings from our portfolio while continuing to assess acquisition and capital recycling opportunities that complement the strategic direction of our business.”