LGL Performance

I stated LGL performance would be bad this quarter due to its diversified new leisure sector. Sadly for this quarter its main sector energy also shows a drop in GP margin and Profit. After a good performance in first few quarters the EPS shows a bad drop to Rs.0.10.

If we look at the main contributors for this drop, it comes from the leisure with an operating loss of Rs 26.7Mn. Apart from the main sector energy showing a drop in GP margin, the finance cost has bloated to Rs.12mn for the quarter compared to Rs.1.7mn last year same quarter. Now the biggest question is, how long will the Leisure sector and finance cost going to affect the bottom line of the Company.

Taking a look at the cash flow and balance sheet, it shows the company is borrowing now heavily. Its interest bearing long term loans have increased massively compared to previous year

In its Annual Report, chairman’s statement starts with the phrase “Small aim is a crime” with the hotelspicture in the background. I feel personally, only the cost is aimed high at building this hotel, and LGL going to struggle to find its revenue.

Q2Q EPS
2013/14-Q1----------0.70
2013/14-Q2----- -----1.60
2013/14-Q3----------0.98
2013/14-Q4----------0.10
2013/14 FY-----------3.38

Applying a PE of 10 gives the value of share Rs.33.80-34.00
Suppose if the last quarter results repeated for few quarters until the areas highlighted above make an improvement, the value would come down tremendously. This is what I have been waiting to highlight

There is a possibility for the annualized EPS to drop to 0.4 to 2.00 ranges until it makes a speed recovery

HE

We can't think last quater profit was decrease. Then next year EPS decrease.. i think, company start a hotel sector in march. Then this quater no generate revenue. This year Borrowings are increase. Bt now interest rate low. They invest borrowing money.(hotel,property) Then finance exp. Low this day.We are compare last annual report & this report. This year preforms good. This is my opinin..

lakmal87 wrote:We can't think last quater profit was decrease. Then next year EPS decrease.. i think, company start a hotel sector in march. Then this quater no generate revenue. This year Borrowings are increase. Bt now interest rate low. They invest borrowing money.(hotel,property) Then finance exp. Low this day.We are compare last annual report & this report. This year preforms good. This is my opinin..

Every think is perfect, But the thing is this part of world never attend to collect until result is appear.

lakmal87 wrote:We can't think last quater profit was decrease. Then next year EPS decrease.. i think, company start a hotel sector in march. Then this quater no generate revenue. This year Borrowings are increase. Bt now interest rate low. They invest borrowing money.(hotel,property) Then finance exp. Low this day.We are compare last annual report & this report. This year preforms good. This is my opinin..

if you check how much it cost them to build, and visited the hotel see how much they have spent on each detailed area (Ex: ceiling fans if you note ,its made of woods and from Thailan if im not mistaken, and not very cheap).each area is unique from buffet tables to dishes.its beautiful..But what is different to other hotels is they have to get the correct customers to make profit

Whom will they target to spend this luxury?

Hawk Eye wrote:

lakmal87 wrote:We can't think last quater profit was decrease. Then next year EPS decrease.. i think, company start a hotel sector in march. Then this quater no generate revenue. This year Borrowings are increase. Bt now interest rate low. They invest borrowing money.(hotel,property) Then finance exp. Low this day.We are compare last annual report & this report. This year preforms good. This is my opinin..

if you check how much it cost them to build, and visited the hotel see how much they have spent on each detailed area (Ex: ceiling fans if you note ,its made of woods and from Thailan if im not mistaken, and not very cheap).each area is unique from buffet tables to dishes.i beautiful..But what is different to other hotels is they have to get the correct customers to make profit

Whom will they target to spend this luxury?

Hotel sector have 2.9 Bn property.. they made one hotel. It's name Anantaya restor. Hotel have 87 rooms. Commence on Feb 15. You look at cash flowe of LGL. Then you can understand that borrowing how to use. They use that borrowing built of capital exp. That mean they use the low interest rate borrowing high demand of future hotel sector. .

i heard
they going to buy mercantile finance

lakmal87 wrote:

Hawk Eye wrote:

lakmal87 wrote:We can't think last quater profit was decrease. Then next year EPS decrease.. i think, company start a hotel sector in march. Then this quater no generate revenue. This year Borrowings are increase. Bt now interest rate low. They invest borrowing money.(hotel,property) Then finance exp. Low this day.We are compare last annual report & this report. This year preforms good. This is my opinin..

if you check how much it cost them to build, and visited the hotel see how much they have spent on each detailed area (Ex: ceiling fans if you note ,its made of woods and from Thailan if im not mistaken, and not very cheap).each area is unique from buffet tables to dishes.i beautiful..But what is different to other hotels is they have to get the correct customers to make profit

Whom will they target to spend this luxury?

tel sector have 2.9 Bn property.. they made one hotel. It's name Anantaya restor. Hotel have 87 rooms. Commence on Feb 15. You look at  cash flowe of LGL. Then you can understand that borrowing how to use. They use that borrowing built of capital exp. That mean they use the low interest rate borrowing high demand of future hotel sector.   .

I think we are talking different languege...i am talking about and have been talking on their sales strategy and customer base

Acualy i don't know dear their sales strategy. Bt their have good customer base their are products. I belive this company better long term investment.

there results will reveal the truth...lets wait for it

I feel this time their core business should improve profit. prices slowly making up with good collection

Hawk Eye wrote:I feel this time their core business should improve profit. prices slowly making up with good collection

Easily LGL should show very impressive results. So fingers crossed. If you have it.

RPPA wrote:

Hawk Eye wrote:I feel this time their core business should improve profit. prices slowly making up with good collection

Easily LGL should show very impressive results. So fingers crossed. If you have it.

Yes..Bought at 28- 30 range for a long term purpose, collected again at 37-39..Results will decide to buy further or not for short term trading