Shares in the ASX-listed Redcape Hotel Group rallied following news of upgraded forecasts in its full-year earnings guidance and distribution payout.
The high-profile Group spoke of improved trading as its shares rose over four per cent yesterday, as the overall share market retreated.
Redcape (ASX:RDC) lifted its FY21 earnings forecast five per cent from guidance in February, to 10.2c per share, and increased fourth-quarter distribution 46 per cent, lifting full-year distribution over 11 per cent, to 8.16c.
The earnings upgrade was reportedly driven by improved trading, through both the further easing of restrictions and a recognised increase in people seeking and engaging with local venues.
RDC has had its Publinc loyalty program in place since November, allowing members to earn points at the bar, foodservice or gaming at its venues. Points can be used for discounts on products or donated to local community initiatives.
Chief executive Dan Brady told the AFR the program has been deemed highly successful in fostering ‘localism’, leading them to donate $300k to around 60 causes so far, with hopes to extend that to $1 million this year.
Backed by Moelis Australia, which has been busy acquiring its own pubs, notably Kinselas for $45 million and the adjacent Courthouse Hotel for $22 million, RDC is understood to have balance sheet capacity to continue to grow, citing its plans for further “discerning acquisitions” where it believes it can add value.
The RDC portfolio stands at 36 venues, valued at more than $1.2 billion. RDC reports a market cap of $563 million.
After a surge yesterday following the announcement, RDC closed today up another 1.9 per cent to $1.04, representing a high since November 2020 and closer to its pre-pandemic price of $1.12.
