MCK - Millennium & Copthorne Hotels NZ Limited

Started by BlackPeter, Jun 29, 2022, 11:52 AM

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Clearasmud

Quote from: BlackPeter on May 23, 2023, 02:29 PMAgreed - this was as well the subject of some hard hitting questions from the floor in todays AGM, particularly (but not just) from the ACC account manager ... and I found their answers re independence of decision making (and in whose interest the directors acted) not quite satisfying. No meaningful answers related to business case either - its all commercially sensitive.

Clear "go away" to minority share holders.

Probably fair to say that the board does not need to care about the views of minority share holders (given that the Singaporean Kwek family holds through various investment vehicles something like 70%) ... and this was something which strongly came across today. They just did their formal duty, but clearly didn't see any reason to communicate with or work for minority share holders. They don't even emphasize that they acted in our (shareholders) interest - just in the interest of the company (whatever this means).

Quite disappointing ...

I think you missed it the chairman said they are working for all shareholders.
They should be printing money now the room rent % is near normal.
They are "for real" look at the share price performance since listing.
They are using their Australian asset sales and aud cash to finance this hotel and they said have waited years for an opportunity this good.
It will be earning accretive for day one.

BlackPeter

Quote from: Clearasmud on May 24, 2023, 09:18 PMI think you missed it the chairman said they are working for all shareholders.
They should be printing money now the room rent % is near normal.
They are "for real" look at the share price performance since listing.
They are using their Australian asset sales and aud cash to finance this hotel and they said have waited years for an opportunity this good.
It will be earning accretive for day one.


Not sure I heard that, but he would say that, wouldn't he?

But maybe you missed one of the so called independent directors pushing back against the shareholder question (asked by the responsible ACC account manager - sorry. forgot his name) implying that they should work in the interest of the shareholders of MCI ("the people in this room"). The director clarified that they work for the interests of the company and made clear that this is a different thing.

Quite funny when afterwards the person asking read to the meeting the confirmation the board actually sent to the NZX to get the waiver (talking about the interest of all shareholders) for related parties dealings. It appeared the directors don't quite understand their duties and clearly they didn't know what they signed!

Sure - maybe they work too hard and had a slip of attention or whatever, and maybe there have been misunderstandings ... but I do believe in Freudian slips :) ;

Crackity

NBR excerpt published today



NZX-listed Millennium & Copthorne says it is "in negotiations" with Auckland Council and Precinct Properties over the future of its MSocial hotel property, which sits in front of their downtown carpark development project.
Precinct was selected last October as preferred developer for the Council's 6442 sq m downtown carpark site, although final terms on a deal are yet to be agreed.
At Millennium & Copthorne's annual meeting last week, chair Colin Sim was asked to comment on the company's approach to the development.
Sim confirmed Millennium & Copthorne was in talks with the Council and Precinct. "Let's be very clear, we sit on a very valuable property," he said.
"We sit on the key to unlock value and enhance the investment next door. So yes we are in a prime position and we are in negotiations and we will make sure it is to the benefit of all shareholders."

Crackity

Second article in two days on MCK at NBR and this one is a longer one


Heading - A hotel company with an attitude
problem


ANALYSIS: Millennium & Copthorne's disdain for minority shareholders is written all over its accounts.


Excerpt 1. -


The MSocial would also be far from the only valuable property on the hotel company's books. For example, according to property records its Copthorne Hotel at 31 Frankton Rd in Queenstown has a land value on its own of $46.75m, slightly

 more than the book value of all the land on MCK's balance sheet. Including the buildings the property has a rating valuation of $116m.
That's just one of 14 hotels in the MCK owned portfolio.


Excerpt 2 -

Seen in that light there is surely at least potential for value realisation at MCK. The hard part will be getting the board to admit it when a lowball takeover offer is so much easier.
Investors who want to check it out will have to read the notes closely.

Mos

Absolutely right Crackity. There is serious hidden value to be unlocked in the hotel sites. Question is can it be unlocked and if so how?

Crackity

#20
Quote from: Mos on Jun 02, 2023, 05:42 PMAbsolutely right Crackity. There is serious hidden value to be unlocked in the hotel sites. Question is can it be unlocked and if so how?


I've been perusing the latest annual report of the ultimate parent company ( CDL in Singapore ) - here are 3 snippets....


UNLOCKING VALUE IN HOSPITALITY - glossy page 6

Since the privatisation of Millennium & Copthorne Hotels Limited (M&C) in 2019, we have streamlined our portfolio through opportunistic asset divestments to unlock latent value and reallocate capital for growth. These include the record sale of Millennium Hilton Seoul and the completion of the collective sale of Tanglin Shopping Centre in 2022 – both held by M&C.
Spurred by the continued recovery and restored confidence in global travel, our hotel operations made a strong rebound in 2022, having recovered in most markets to pre-pandemic 2019 levels. The segment is well-positioned to continue its growth trajectory, riding on the return of corporate travel and unabated pent-up demand for leisure travel.

We also continue to enhance our hospitality offerings and revitalise our assets through AEIs and repositionings, focusing on revenue generation and asset yield optimisation. Several key hotels will be rebranded to M Social. These include M Social Hotel Phuket, M Social Hotel Downtown, New York



And here's the second paragraph of the Executive Chairman's report -

Prudent divestments and strong operational performance from our core business segments drove the Group's stellar earnings. In FY 2022, we realised significant capital gains from our successful divestments of several major properties held at book value over a long period of time – a testament to the Group's ability to extract value at the most opportune time.



And here's something in the Group CEO report -

Transforming for the Future
Our hospitality portfolio is a key transformation lever. Since we privatised Millennium & Copthorne Hotels Limited (M&C) in November 2019, our hotel operations segment has undergone an upheaval, with the pandemic decimating the travel industry in 2020 and 2021. However, with the reopening of borders and easing restrictions in 2022, our hospitality segment has rebounded strongly, with operations in most markets having recovered to pre- pandemic levels. With a more stabilised position, we will accelerate our plans for asset optimisation and drive alignment to the Group's strategic plans and processes.

Following a holistic review of our hospitality portfolio, we have executed strategic asset divestment and restructuring initiatives to unlock latent value during the year. These include the KRW 1.1 trillion (approximately $1.25 billion) sale of Millennium Hilton Seoul, the divestment of interest in Tanglin Shopping Centre held by M&C, as well as the accounting deconsolidation of CDL Hospitality Trusts (CDLHT) from the Group following a distribution in specie of CDLHT units in May 2022 to reward shareholders



My takeaway -
This is quite different to what the NZ company said at the recent MCK AGM - maybe they haven't got the memo.....

I'm also pondering why the Brisbane purchase is a jv between the parent company and the NZ listed arm.

Hmmmm - interesting



Here's the link
https://ir.cdl.com.sg/static-files/bce35724-c632-4077-a6df-d94f41869916

Mos

Thanks for the link Crackity. An interesting read.

Good to see the parent company focused on value realisation with respect to some of their global assets. It would be great if MCK can realise the value of the M Social site on the Auckland waterfront followed by some of their other very valuable but sub-optimised properties.

From the outside it seems quirky for the parent to do a JV with their 76% owned subsidiary for the Brisbane hotel acquisition. I note the parent company capital structure is more 50/50 equity/debt so quite different to the MCK fortress balance sheet.

 

Crackity

#22
Twin towers and a laneway weaving its way from Britomart to the Viaduct are proposed if Auckland councillors agree to sell the Downtown carpark building to Precinct Properties.

A pack of confidential images leaked to the Weekend Herald reveal Precinct's plan to expand its portfolio of office towers on the Auckland waterfront from Commercial Bay to the Viaduct.

To pull it off, Precinct plans to buy and demolish the carpark building and develop the prime 0.625ha waterfront site where the plain, but functional seven-storey building with 1944 spaces has provided affordable parking since it was built in 1970.

The twin towers will be almost 40 storeys high and offer spectacular views for office workers and apartments.

Central to Precinct's plans are two slim skyscrapers nearly 40 storeys high towering above the M Social hotel on Quay St that will have a mix of office space and apartments with spectacular views of the Waitematā Harbour and the Hauraki Gulf.


Herald today - MSocial site potentially blocks most of the harbour views from these proposed towers if ever redeveloped 🤔


Mos

Quote from: Crackity on Nov 11, 2023, 02:34 PMTwin towers and a laneway weaving its way from Britomart to the Viaduct are proposed if Auckland councillors agree to sell the Downtown carpark building to Precinct Properties.

A pack of confidential images leaked to the Weekend Herald reveal Precinct's plan to expand its portfolio of office towers on the Auckland waterfront from Commercial Bay to the Viaduct.

To pull it off, Precinct plans to buy and demolish the carpark building and develop the prime 0.625ha waterfront site where the plain, but functional seven-storey building with 1944 spaces has provided affordable parking since it was built in 1970.

The twin towers will be almost 40 storeys high and offer spectacular views for office workers and apartments.

Central to Precinct's plans are two slim skyscrapers nearly 40 storeys high towering above the M Social hotel on Quay St that will have a mix of office space and apartments with spectacular views of the Waitematā Harbour and the Hauraki Gulf.


Herald today - MSocial site potentially blocks most of the harbour views from these proposed towers if ever redeveloped 🤔



Exactly. How much would Precinct pay to protect the views and enlarge their proposed $1b+ development? Good time to be a MCK shareholder - perhaps the hidden value our one of our best sites will be unlocked in the next year or two.

 

Hectorplains

Quote from: Mos on Nov 11, 2023, 04:12 PMExactly. How much would Precinct pay to protect the views and enlarge their proposed $1b+ development? Good time to be a MCK shareholder - perhaps the hidden value our one of our best sites will be unlocked in the next year or two.

 

Yikes, they're already being dubbed 'the twin towers', that's a moniker Precinct would want to rapidly move way from.   

I imagine I'd be a bit of a sod for M-Social to lose that parking?  Walking is off putting for casual restaurant diners etc.

Mos

I see Precinct is paying $122m for the Downtown Carpark site for their $1b+ proposed development (excerpt from Precinct NZX release below). Surely it makes good commercial sense for Precinct to enlarge and preserve the views of this development by making a very solid offer for our M Social hotel.

"The Downtown Car Park site purchase price is $122 million, payable at the end of 2025 with Auckland Transport to continue to operate the carpark until then. Demolition cannot commence before 30 April 2025. While design is underway, development timing will be dependent on a number of factors, including demand, feasibility and consenting processes."

Mos

With council approving the downtown carpark sale, surely an attractive offer for the valuable waterfront M Social site is getting closer.

https://www.stuff.co.nz/national/politics/local-government/301014518/auckland-downtown-carpark-a-122-million-done-deal-despite-tempers

Crackity

Hotel Data New Zealand (HDNZ) figures.


Queenstown reconfirmed its status as a highly sought-after destination, experiencing a resurgence in occupancies to 88 per cent following a 13 per cent year-on-year rise in the number of room nights sold. The robust demand resulted in a 17 per cent increase in ADR across all hotel categories compared with the previous year.



entrep

Very interesting thread and company structure with the Singapore majority owners. The price has been going one way though despite all the optimism?

Crackity

Quote from: entrep on Mar 18, 2024, 10:05 PMVery interesting thread and company structure with the Singapore majority owners. The price has been going one way though despite all the optimism?


Yes