Minoan Group - Update
The end game and long awaited value realisation point at the company’s key Cava Sidero project in Crete now looks to be on the horizon for 2019
Minoan Group joined AIM in 2007 to further its project on the Cavo Sidero peninsular in Crete. Amongst other things, holiday makers visit the Greek islands for the relaxed pace of life. Investors have got to admire the stamina and tenacity of the board, led by Executive Chairman Christopher Egleton who, for more than 10 years, has navigated this project through the Greek system to emerge, finally, triumphant in June 2017.
Upmarket resort project designed to be the most sustainable in Europe
This large Crete holiday resort project is being rapidly advanced further through the planning and development process, adding more value. Management are now sensibly seeking to crystallise the large value that has been created by bringing onboard operational and financial partners.
Crete has the best climate in Greece and a shortage of upscale resorts
Problems in the sea and sun destinations of Turkey and Egypt have led to record levels of tourism in Crete, which sits far away from the migrant route. The project lies on an unspoilt peninsular which is a unique location in which to build a modern low density upmarket integrated resort.
Travel & Leisure division sold off reducing debt burden materially
With Stewart Travel now sold, leaving just £900,000 of debt on the balance sheet, the hindrance to a potential outright sale of the company and the prior onerous debt interest burden has now been removed.
Our conservative valuation suggests an upside of 244%
Peer comparisons provide a conservative valuation. We update coverage of Minoan Group with a very conservative target price of 8.6p, offering upside of 244% and accordingly we reiterate our Conviction Buy stance.
RISK WARNING & DISCLAIMER
Minoan is a research client of Align Research. Align Research owns shares in Minoan. For full disclaimer information please refer to the last page of the full document. This investment may not be suitable for your personal circumstances. If you are in any doubt as to its suitability you should seek professional advice. This note does not constitute advice and your capital is at risk. This is a marketing communication and cannot be considered independent research.
| Year to Oct | 2016A | 2017A | 2018E | 2019E |
|---|---|---|---|---|
| Revenues (£'000) | 7,317 | 8,700 | - | - |
| Pre-tax (£'000) | (2,272) | (2,516) | (1,450) | (1,000) |
| EPS (p) | (1.19) | (1.23) | (0.66) | (0.38) |