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Japan Leisure Hotels

  • BY: Andrew Hore |
  • POSTED: 18/05/2009 |

Weak sterling has helped to boost Japan Leisure Hotels’ NAV to 91p a share by the end of 2008.

The NAV had been 53.4p a share at the end of June 2008 but in Yen terms the NAV was slightly lower at the end of 2008. The shares rose 3.5p to 52p each, which values the short-stay hotel operator at £22.9m.

JLH operates six short-stay hotels in Japan with 242 rooms. The occupancy rate of the five Bonita branded hotels, which excludes the latest acquisition in August 2008, is 257% - up from 254% the previous year.

Last year was the first proper trading period for the company. Revenues were Yen1.18bn (£6.1m) in and JLH reported a profit, but most of that Yen 811m profit was negative goodwill written back to profit. That is because hotels were bought for less than their asset value.

The business did generate cash, though. There is still Yen263m (£2m) of cash in the bank.

There should be opportunities to buy more hotels from owners that get into financial difficulties. To take advantage of these opportunities JLH will need to use shares to finance deals.

This is a £31bn a year market.

Trading continues to be satisfactory.

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