Summary
Number of updates
3
Number of managers
2
Last update
March 2025
Recent activity
Hold
The fund managers believe EVT Ltd presents a unique investment opportunity, with a strong focus on its dual operations in accommodation and hotels and cinemas. They note that the share price, currently around $13.31, is below the net tangible asset backing, indicating undervaluation. The cinema division has struggled due to past disruptions, including the COVID-19 shutdowns and the recent Hollywood writers' strike. However, the fund managers expect a recovery in the cinema business driven by a backlog of blockbuster films, which could enhance profitability over the next 18 months. Furthermore, they highlight potential value realizations from property development opportunities and possible divestitures of non-core assets, such as Event Cinemas, which could see significant bids reflective of market interest. In their opinion, these factors position EVT as a compelling investment, poised to generate substantial shareholder value in the near future.
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Source: Trading View
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Commentary From The Managers
Oracle Advisory Group
31 Mar 2025
$13.31
Thesis Summary
- Oracle Advisory Group has enhanced its position in EVT, a major player in Australia’s cinema sector.
- The decision is grounded in the belief that property valuations are stabilising.
- The cinema industry is expected to recover notably in 2025 and 2026.
- Recent disruptions from the Hollywood writers’ strike have created a backlog of potential blockbusters.
- Oracle increased their stake at a price below EVT’s property portfolio value, indicating a strategic advantage.
- This approach allows the market to perceive the cinema business as essentially cost-free.
- Positive company outlook led to market recognition of EVT’s value, contributing to a 23.4% increase in share price during February.
Naos Asset Management
30 Sept 2024
$10.78
Thesis Summary
- EVT is a core investment in the NAC portfolio for 8 years.
- Two main divisions: accommodation/hotels and Event Cinemas.
- Accommodation division includes brands like Rydges and QT Hotels.
- Profitability in the hotel segment tied to property ownership, leasing, or management contracts.
- Event Cinemas ranks as one of the largest cinema chains in Australia.
- Recent share price pressure primarily from cinema division performance.
- Revenue affected by COVID shutdowns and Hollywood writers’ strike.
- Current share price values EVT below its net tangible asset backing.
- Expectations for earnings re-rating due to improving outlook for blockbuster films.
- Potential for management to explore strategies for unrealized value.
- Opportunities for near-term value realization through partnerships or asset divestment.
Oracle Advisory Group
31 Mar 2024
$12.12
Thesis Summary
- EVT’s enterprise value is currently lower than the value of its property portfolio, which had a 20% valuation uplift in the FY23 result.
- Oracle Advisory Group believes investors are getting the operating businesses, including Event Cinemas, Cinestar, Thredbo, and the Rydge’s hotel chain, for free.
- Value can be realised through the sale or spin-off of operating businesses.
- Event Cinemas, being Australia’s largest chain, could potentially yield a sale price of at least $700m, similar to the bid received by competing chain Hoyts.
- This sale would create significant value for shareholders.
- There is also potential to further develop properties and sell them above current valuations, enhancing shareholder value.
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
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Frequently Asked Questions
Who has invested in EVT Ltd (ASX:EVT)?
Fund managers including Naos Asset Management and Oracle Advisory Group have invested in EVT Ltd (ASX:EVT).
Why have investment managers invested in EVT Ltd (ASX:EVT)?
Fund managers are investing in EVT Ltd due to its underlying value, particularly in its property assets which are currently undervalued by the market. The company operates two main divisions: accommodation and hotels, and Event Cinemas, one of Australia's leading cinema chains. The cinema division has faced challenges due to pandemic-related shutdowns and recent Hollywood strikes, impacting its revenue. However, fund managers believe that the cinema business's profitability will improve as new blockbuster films are expected to boost ticket sales. Additionally, EVT possesses substantial property assets valued higher than its current market capitalization, indicating that investors are essentially acquiring the cinema operations at no extra cost. Managers also foresee potential opportunities for value realization through asset divestment or partnerships, which could unlock further shareholder value. Overall, the expectation of a cinema recovery combined with strong property fundamentals presents a compelling investment case.
What happened to EVT Ltd (ASX:EVT)?
There have been no recent updates from fund managers regarding EVT Ltd although fund managers including Naos Asset Management and Oracle Advisory Group have previously commented.