Research: Consumer
Galvanised by further strong investment-led sales in FY23 (up by 11% like-for-like), which more than absorbed a near-doubling of energy costs, Compagnie des Alpes (CDA) is awash with growth initiatives, backed by a targeted 15% rise in FY24 capex to €270m. The enhancement of a diverse and hugely popular estate, with over 23 million visitors pa across 22 key sites (12 of which are leisure parks and seven are outside France), provides scope for lucrative marginal revenue growth. Continued buoyancy in Q124, allowing for a change in timing of school vacations, complements the better-than-expected progress with environmental policy, which CDA sees as key to corporate wellbeing. On consensus FY24 EBITDA forecasts, double guidance of c 7% growth, CDA’s EV/EBITDA is 4.5x.
Compagnie des Alpes |
New peaks
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Travel and leisure |
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23 February 2024 |
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Galvanised by further strong investment-led sales in FY23 (up by 11% like-for-like), which more than absorbed a near-doubling of energy costs, Compagnie des Alpes (CDA) is awash with growth initiatives, backed by a targeted 15% rise in FY24 capex to €270m. The enhancement of a diverse and hugely popular estate, with over 23 million visitors pa across 22 key sites (12 of which are leisure parks and seven are outside France), provides scope for lucrative marginal revenue growth. Continued buoyancy in Q124, allowing for a change in timing of school vacations, complements the better-than-expected progress with environmental policy, which CDA sees as key to corporate wellbeing. On consensus FY24 EBITDA forecasts, double guidance of c 7% growth, CDA’s EV/EBITDA is 4.5x.
More than what it says on the tin
Notwithstanding the competitive advantage of its predominantly high-altitude ski areas (above 1,800 metres) in terms of snow conditions, CDA is at pains to diversify its business offering in both winter and summer. This has been facilitated by becoming a key player in mountain accommodation through its 2022 acquisition of MMV, the second largest operator of hotels and club residences in the French Alps. CDA has also been extending the opening periods of its leisure parks, with a notable increase in demand at Halloween and Christmas. Aside from the eponymous ‘Alps’, recent awards for Park Astérix as ‘European Park of the Year Award 2023’ from Park World Excellence and Futuroscope’s ‘Chasseurs de Tournade’ as ‘World’s Best Attraction’ by the Themed Entertainment Association are testimony to CDA’s development expertise.
FY23: All-round strength
Trading results in the year to September 2023 confirmed the resilience of CDA’s model. A 16% rise in Leisure Parks like-for-like EBITDA, driven by 5% more visitors and 7% higher average on-site spend (reflecting capex up by a third) more than made up for the 6% reduction in Ski Areas like-for-like EBITDA, attributable to the 120% increase in energy costs. However, Ski Areas outperformed the market with 2% more skier days, thanks to their high-altitude positioning. With operating cash flow positive, despite the step-changes in capex and taxes, net financial debt/preIFRS 16 EBITDA was 2x, affording a 10% rise in the proposed dividend.
Valuation: Low altitude
While consensus FY24 EBITDA forecasts exceed management’s guidance, the rating may not reflect potential returns from sustained record capex on a landmark portfolio.
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Consensus estimates
Source: Refinitiv. Note: *Adjusted. **Excluding non-recurring items, mainly COVID-19 financial aid and Belgian flood insurance (2022: €43m; 2023: €4m). |
EDISON QUICKVIEWS ARE NORMALLY ONE-OFF PUBLICATIONS WITH NO COMMITMENT TO WRITING ANY FOLLOW UP. QUICKVIEW NOTES USE CONSENSUS EARNINGS ESTIMATES.
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Research: Healthcare
IRLAB Therapeutics reported positive feedback from its FDA end-of-Phase II (EoP2) meeting earlier in the week for mesdopetam. According to management, the meeting was held in a constructive and engaging spirit, and discussions during the meeting suggested alignment between the company and the regulatory authority on the design of a Phase III programme for mesdopetam as a potential treatment for levodopa-induced dyskinesias (PD-LIDs). In our view, this update is a positive sign for further clinical development of IRLAB’s lead asset, and we expect management to share more details on the formal feedback, which is expected in approximately 30 days.