Ardent Leisure Group (ALG.AX), mcap=$252m, price $0.53 vs $0.54

– The operator of Australia-based theme park operator at 2x historical EBITDA.
– Recently sold its non-theme park business and distributed part of the proceeds to shareholders.
– Has $A190m of cash on the balance sheet vs A$260m market cap.
– Historically theme park operations generated A$30-$35m of EBITDA.
– The business was hit by a fatal accident and then covid, causing significant growth in attendance and refurbishment investments.
– Traffic already starting to recover to pre-accident / pre-covid levels and earnings are expected the follow.
– Rumored interest from ‘global PE fund’ in the ALG theme park business.
– Ownership of unutilized land provides further upside.

– In late 2020 main comp acquired at 8x pre-covid EBITDA.
– At a similar multiple, the theme park business is worth A$200-300m.
– Coupled with net cash this yields a target of A$0.90 – A$1.10 per share.

Exp. gain: +100% to A$0.9 – A$1.1/share over the next 1-2 years.

Full $ALG.AX write-up (free guest account required):

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