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Well, if "hotel operation" is a cash intensive business, just ask Marriott or Hilton. Maybe not, since these are the big boys. But maybe HGC can ask local player Ascott?
Hotel operations and ownership is a cash intensive business. To be fair, the Mgt is pretty aligned to OPMIs and the latter have been rewarded with special dividends from past asset sales. During those asset sales, Mgt did not have their salaries running to the roof (as many others did) but they benefitted from the special dividends.
So if OPMIs tag along, they have to acknowledge ownership is part of HGC's business model and accept that low ROE is the feature.
MINUTES OF THE 56TH ANNUAL GENERAL MEETING
Question 4
From the Annual Report, I note that the Group is over capitalized in terms of its size and operations. There is no gearing, and the annual report shows that there are S$302 million of cash and short-term deposits sitting there. Given the current circumstance, the share price is also trading significantly below its book value and net asset value. Is there any way for the Board to consider improving the return on equity for shareholders? On the IR part, it would be good to consider listing the properties and the percentage of ownership in these properties. Maybe with more transparency, the Company will get more media coverage. Also it would be good to have some press interviews to raise the profile of the Company.
Answer 4
Thank you for your questions. Hotel operation is a very cash intensive business. Given the current inflation and increasing cost on manpower, the Group have tried its best keep the lid on escalating cost. All listed properties in the annual report are owned 100% by the Company. The Board reviews cash management as part of its strategy, from time to time. As for the return on equity, and the IR part, the Board will consider your suggestions.
https://links.sgx.com/FileOpen/HGCL-AGM-...eID=802976
Hotel operations and ownership is a cash intensive business. To be fair, the Mgt is pretty aligned to OPMIs and the latter have been rewarded with special dividends from past asset sales. During those asset sales, Mgt did not have their salaries running to the roof (as many others did) but they benefitted from the special dividends.
So if OPMIs tag along, they have to acknowledge ownership is part of HGC's business model and accept that low ROE is the feature.
MINUTES OF THE 56TH ANNUAL GENERAL MEETING
Question 4
From the Annual Report, I note that the Group is over capitalized in terms of its size and operations. There is no gearing, and the annual report shows that there are S$302 million of cash and short-term deposits sitting there. Given the current circumstance, the share price is also trading significantly below its book value and net asset value. Is there any way for the Board to consider improving the return on equity for shareholders? On the IR part, it would be good to consider listing the properties and the percentage of ownership in these properties. Maybe with more transparency, the Company will get more media coverage. Also it would be good to have some press interviews to raise the profile of the Company.
Answer 4
Thank you for your questions. Hotel operation is a very cash intensive business. Given the current inflation and increasing cost on manpower, the Group have tried its best keep the lid on escalating cost. All listed properties in the annual report are owned 100% by the Company. The Board reviews cash management as part of its strategy, from time to time. As for the return on equity, and the IR part, the Board will consider your suggestions.
https://links.sgx.com/FileOpen/HGCL-AGM-...eID=802976