Hotel Grand Central

[greengiraffe]

http://info.sgx.com/webcoranncatth.nsf/V...1003385A2/$file/HGCFullYearResultsFY31Dec2012.pdf?openelement

Operating earnings dipped marginally despite closure of Orchard Road flagship since 1 Aug 12 (5 months of FY12).

DPS maintained at 5 cents and book value raised to $1.53.

Outlook remains conservative with Hotel Grand expects room rates to be pressured as a results of increased supply of hotel rooms in Singapore and NZ.

With older hotels turning over at between $800k and $900k per key and newly completed hotel owned by UOL opposite Hong Lim Gardens valued at close to $1m per key, it is not expected to value Hotel Grand's redeveloped flagship around $1m per key due to its prime location.

Book value remains understated.

http://info.sgx.com/webcoranncatth.nsf/V...100326342/$file/HGCValuationofAssets.pdf?openelement

With freehold land and leasehold land in Orchard Road valued at $96m and $120m, total land is revalued at $216m. With total construction costs and fit out estimated at $130m, the 752 room new hotels are valued at $460k per key, way below current market value. At $1m per key, additional surplus of $406m or $0.73 per share.

At $201m, the 328 room hotel in Little india is valued at $612,805 per key. I think Hotel Grand has more than double its money in Little India. The leasehold land was successfully tendered at $48.888888m with a capex as revealed under capital commitment in its 2008 annual report of $46m, ie total Little India hotel costs of $94.888888m.

Hi GG

Full yr 2012 EPS only 3.03cts why still can give 5cts dividend???

The Tan family behind Hotel Grand is a bunch of disciplined old bloaks. If you go look at the operating cashflow, they are in fact paying out from there. The accounting profits was affected by an impairment charge on the closure of Orchard Road flagship in excess of S$10m so i suspect they are paying close to 100% of net profits before impairment. Ultra conservative businessmen.

Earlier this year, it was reported in Australian Financial Review that they were in the running for a 4 star hotel in Kings Cross, Sydney. The hotel was put up for sale by Australand, a Capland subsidiary. They eventually lost out to a more aggressive bidder by a couple of million. Comparing to St******, I think Hotel Grand management is more proactive in a sense that they will trade assets when the price is right.

Please correct me if I am wrong.