11 May 2015
Words
Carla Cook
Mantra's Got Soul for $20mil
Article - Gold Coast Bulletin - 11th May
By Jenny Rogers
Mantra Group has smashed the record for management buys on the Gold Coast after snaring the rights to the luxury Soul Surfers Paradise tower for $20 million.
The buy cracked the previous city record held by the $15.5 million outlaid by a group of 12 investors in 2010 for the rights to the Turtle Beach resort at Mermaid Beach.
Shares in the Surfers Paradise based Mantra Group yesterday surged more than 5 percent in intraday on the back of an upgrade in full-year earnings guidance after it beat out more than 20 major Australian and international hotel groups to secure rights to the 77-level beachfront Soul tower.
Mantra declined to reveal the price paid but industry sources said it sealed the deal for more than $20 million.
The share price surge continues a stellar run for Mantra. In just under a year since listing, its stock has soared more than 100 per cent as it embarks on aggressive expansion. Mantra’s stock yesterday closed up 13c, or 3.53 per cent, at $3.81.
Australia’s second-largest hotel operator late Friday revealed it expects to report underlying FY15 earnings of between $71 million and $73 million and lifted its full-year net profit forecast to between $35 million and $36.5 million.
That compares with the $69.5 million FY15 underlying earnings forecast outlined in Mantra’s prospectus before its June listing and is up from the $32.6 million full year net profit forecast. Mantra will continue to manage Soul under its Peppers brand.
Chief executive Bob East said the group had been able to lift profit forecast 12 per cent by “keeping it simple”.
“What drives us is growing earnings and having the best hotels we can lay our hands on,” he said.
He said the group was eyeing a number of major hotels as well as smaller properties.
“We are continuing to grow our portfolio in a sustainable manner with one or two hotels but we are also focused on some big assets at the moment,” he said.
In March, Mantra raised $50 million to fund purchase of Outrigger Hotels & Resorts’ Australian operations, beating rivals Accor and Wyndham.
Mantra will pay Outrigger $29.5 million for its four Queensland hotels – in Surfers Paradise, Coolangatta, Noosa and Airlie Beach.
The sale will take Mantra’s portfolio to more than 17,000 rooms under management.
Hunter Green’s Charlie Green said; “Investors are impressed by Mantra’s share price growth of more than 100 per cent which is massively outperforming the market”.
Resort Brokers Australia agent Alex Cook, who with Glenn Millar handled the Soul rights sale on behalf of receivers, said the deal underlined the strength of the Gold Coast market and showed the growing attraction of management rights to major operators.
