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EL&C Baillieu First | Event Hospitality & Entertainment (EVT) | Business update

EL&C Baillieu First

6 July 2020

Event Hospitality & Entertainment EVT
Business update
Rating*: Hold Price Target*: $10.00 Analyst: Nick Caley

+61 3 9602 9283

Risk: Medium Share Price: $8.88  
*Note: Rating and Price Target recorded at pre-announcement levels as detailed in our research report dated 4 June 20200.
·    Update:  EVT has released a business update as to the current status of each business in addition to details of its current financial position.  No numerical guidance has been provided due to the uncertain nature of COVID-19.

·    Entertainment: Full range of cost initiatives were undertaken during venue closures such as a stand down of the majority of the workforce. The majority of the cinema network in Australia and NZ has re-opened in recent weeks supported by Government subsidies such as JobKeeper. EVT citing the release of a backlog of blockbuster film titles in late 2020/early 2021.

·    Hotels: The majority of EVT’s hotels have remained open during COVID-19 albeit with a streamlined offering. Other uses have been found for a number of sites such as Government and essential service stays in addition to quarantine and isolation. Employee stand downs and Government subsidies have been actively used. EVT citing that it is starting to see some slow improvement in occupancy rates.

·    Thredbo: 2H20 negatively impacted by bushfires and COVID-19. The precinct re-opened on June 22 with a 50% capacity restrictions on visitations and a range of other distancing measures such as private-only ski lessons. EVT citing a current unprecedented demand for lift passes.

·    Financial position: EVT has increased term debt facilities by A$205m to A$750m and currently has cited current available liquidity at A$320m – this implies net debt of A$430m versus A$333m at 1H20. Due to the uncertainty as to the outlook EVT has decided not to pay a final dividend for 2H20 and 1H21. Importantly, the divestment of 6 cinema sites in Germany from the Cinestar network continues which will release sale proceeds of Euro187m when finalised

·    Our view: Whilst some investors will be disappointed by the decision not two pay the next two dividends, EVT looks to be typically conservative. The business looks to have been well managed through recent periods with cash burn reasonably modest considering the scope of assets. The success of the film slate and the return to domestic tourism will be the keys to the EVT story during FY21. Confirmation that the German sale process continues in welcome.


The information in this email is to provide an update on the relevant security. There are no changes to the recommendation of the security. You should refer to our published research (where applicable) for further information including financials and valuations.


This information is not intended to constitute general or personal advice to any retail client. There has been no consideration of the investment objectives, financial situation or particular needs of any particular person or entity and the recipient of this information must not rely on the veracity of the information in making any investment decisions.


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Nick Caley
Research Analyst

E.L. & C. Baillieu Limited    
ABN 74 006 519 393   Level 22, 35 Collins Street
AFS Licence No. 245421   Melbourne VIC 3000 Australia
Direct  +61 3 9602 9283   Mobile +61 4 1387 2324
Phone +61 3 9602 9222   Email    


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