Minor International

Minor International Plc (MINT) 

- 4Q14 profit makes year's peak as expected    

 

MINT's 4Q14 profit made the year's peak at B1,619m, growing 4%yoy, and normalized income was B9,855m, up 5%yoy. Income from the hotel, spa, and hotel management business (41% of total income) rose by 13%yoy because the domestic hotel business rebounded after the political situation became stable and the overseas hotel business (both own-equity and under management business) was strong. Income from the property business (8% of total income) fell 30%yoy because there was no sale of Residence in Samui like in the previous year. Income from the food and restaurant franchise business (40% of total income) grew 8.2%yoy since same store sales rose by 0.4% and 164 new branches were opened, totaling 1,708 branches. Overall, MINT's FY2014 normalized profit was B4,333m, growing 14% yoy. Net gearing of 1.03x is not worrying. 

 

- Every business to boost profit significantly in 2015   

 

MINT's FY2015 net profit is estimated to jump 27%yoy to B5.5bn since the domestic hotel business has rebounded since the political situation has become stable and the company has been expanding its investment in overseas hotels. MINT recently acquired six hotels in Brazil and Portugal, which have started generating profit for MINT since February, probably boosting occupancy rate of own-equity hotels by 10%yoy to 70% and raising RevPar by 5%yoy. For the property business, MINT would recognize income from at least three units of Anantara Estates Phuket (US$10m for each unit). Income from the food business is projected to grow by at least 10%yoy since income from new restaurant would increase by 8-10% and same store sales would grow by 2-3% (versus 0.4% in 2014). 

 

- Ten existing shares: one stock dividend, B0.25 cash dividend   

 

MINT announced to increase its capital by issuing 440.168 million new shares at the par value of B1/share, 20.006 million as a reserve for the adjustment of exercise ratio of convertible securities and another 420.162 million as a reserve for stock dividend payment at the ratio of ten existing shares to one stock dividend, with stock dividend payment of B0.10/share and cash dividend payment of B0.25/share; XD date is April 17 and dividend will be paid on April 27. Since the amount of shares was increased by 10% from the amount prior to the dividend payment announcement, FY2015 fair value (DCF, 9% WACC) is B43 before XD date and decreases to B39.00 after XD date.