ASX:EVT
EVT Ltd
Investment Summary
The fund managers believe that EVT Ltd is a solid investment, particularly given its dual business model encompassing the accommodation and hotels division, including brands like Rydges and QT Hotels, and the Event Cinemas segment, a leading player in the Australian market. In their opinion, the recent pressures on EVT's share price, currently around $10.78, are primarily due to the performance of the cinema division, which has struggled since the COVID shutdowns and the Hollywood writers' strike. However, they see potential for re-rating of cinema earnings over the next 18 months as the market for blockbuster films improves. Furthermore, the fund managers highlight that EVT is currently valued below its net tangible asset backing, mainly driven by hotel property assets. They anticipate management exploring strategies to unlock value, such as partnerships with quality operators or asset divestments, which could present significant opportunities for investor returns in the near term.
Commentary From The Managers
Naos Asset Management
30 Sept 2024
$10.78
- 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.
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.