Author Topic: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?  (Read 176345 times)

sculpin

  • Hero Member
  • *****
  • Posts: 808
Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #100 on: September 22, 2017, 09:34:54 AM »
And Parq opens next Friday...

http://parqvancouver.com/


GMP's take...

Parq Casino could be portfolio ace

In our view, DC.As medium term performance largely depends on three core
items: opening the Parq Casino, completing the sale of United Hydrocarbon
(UHIC) assets and managing liquidity at the corporate level. In this report, we
are taking a deeper dive into each of these three items.

Parq Casino set for fall 2017 open

The Parq Casino project in Vancouver remains on track for a fall 2017 open.
Management projects Parq may generate $75-$100 million annual EBITDA
with an estimated 12-month ramp up to full operations. We have performed
a sensitivity analysis for the project using the EBITDA range, possible debt
refinancing, and valuation multiples based on gaming peer comparables.
Although our range is wide, we calculate DC.As 40% equity stake in the
project may be worth ~$196 million at our midpoint assumptions. With ~$102
million carrying value, we see potential for a material win here, and the
addition of a lasting, cash generating property to the investment portfolio.

UHIC sale a positive outcome

DC.A recently announced the sale of UHIC assets (DC.A ownership 85%) to
Delonex Energy Ltd. for US$35 million cash on closing, US$50 million cash on
first oil, and a royalty stream. The deal is subject to a number of conditions
with uncertain timing including approval from the government of Chad. GMP
is advising UHIC on the transaction. We see this announcement as positive for
DC.A. Although our NAV was reduced, we believe the market may have been
assigning near nil value to UHIC. Closing the deal would remove monthly cash
requirements to maintain the property and add long run royalty potential. For
now, our NAV conservatively reflects only the initial payment on closing.
Maintain BUY DREAM sale eases any liquidity concerns

We continue to pay close attention to DC.As liquidity position. On May 19th,
DC.A sold all remaining shares in DREAM Unlimited Corp. for net proceeds of
$106 million. We calculate this brings DC.As net cash position at the
corporate level to ~$57 million and offers management significant flexibility.
We anticipate selective cash injections into existing investments, with an eye
towards funding those most likely to reach profitability in the medium term.
Our updated NAV is now $9.79 (previously $9.77). We apply a 20% discount
to yield our price target of $8.00 (unchanged). We maintain our BUY rating.


doc75

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 593
Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #101 on: September 22, 2017, 12:14:30 PM »
I've been buying some more of the prefs (D series) over the past week as they were trading with a >10% current yield.  Anybody else?

Rod

  • Full Member
  • ***
  • Posts: 205
Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #102 on: September 22, 2017, 12:25:38 PM »
And Parq opens next Friday...

http://parqvancouver.com/


GMP's take...

Parq Casino could be portfolio ace

Parq Casino set for fall 2017 open

The Parq Casino project in Vancouver remains on track for a fall 2017 open.
Management projects Parq may generate $75-$100 million annual EBITDA
with an estimated 12-month ramp up to full operations. We have performed
a sensitivity analysis for the project using the EBITDA range, possible debt
refinancing, and valuation multiples based on gaming peer comparables.
Although our range is wide, we calculate DC.As 40% equity stake in the
project may be worth ~$196 million at our midpoint assumptions. With ~$102
million carrying value, we see potential for a material win here, and the
addition of a lasting, cash generating property to the investment portfolio.

Thanks for this info sculpin. I like that GMP is using ~$200M for the Parq value. I had been optimistic it would be worth $120M.

sculpin

  • Hero Member
  • *****
  • Posts: 808
Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #103 on: September 22, 2017, 12:33:47 PM »
And Parq opens next Friday...

http://parqvancouver.com/


GMP's take...

Parq Casino could be portfolio ace

Parq Casino set for fall 2017 open

The Parq Casino project in Vancouver remains on track for a fall 2017 open.
Management projects Parq may generate $75-$100 million annual EBITDA
with an estimated 12-month ramp up to full operations. We have performed
a sensitivity analysis for the project using the EBITDA range, possible debt
refinancing, and valuation multiples based on gaming peer comparables.
Although our range is wide, we calculate DC.As 40% equity stake in the
project may be worth ~$196 million at our midpoint assumptions. With ~$102
million carrying value, we see potential for a material win here, and the
addition of a lasting, cash generating property to the investment portfolio.

Thanks for this info sculpin. I like that GMP is using ~$200M for the Parq value. I had been optimistic it would be worth $120M.

For an opening a week away looks like quite alot of outdoor work still going on. Hopefully they are ready to go on the 29th...

http://skyscraperpage.com/forum/showthread.php?t=213941&page=33

Rod

  • Full Member
  • ***
  • Posts: 205
Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #104 on: September 22, 2017, 12:42:39 PM »
I've been buying some more of the prefs (D series) over the past week as they were trading with a >10% current yield.  Anybody else?

I haven't been buying any D's because I already have a ton. I think this one is a no-brainer. When you calculate the future yield based on the ability to convert into the B's in 2 years and likely interest rates increases, the number starts getting silly high.

Cardboard

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 3356
Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #105 on: September 22, 2017, 12:46:16 PM »
I was surprised that the stock did not react more favourably following Q2 results as they had mentioned that the sale to Delonex could close in Q3 (market expectations were for end of year), liquidity risks were significantly reduced with the sale of their Dream Unlimited stake or no longer any bank debt, Blue Goose had turned profitable, HQ costs have been reduced significantly (Toronto office, less interest cost) and Parq Casino was on its way to open.

Technicals look really good right now and I would expect the company to start doing some financial engineering which should bring this thing to $4+ in no time.

Cardboard

gokou3

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 541
Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #106 on: September 22, 2017, 01:04:56 PM »
... I would expect the company to start doing some financial engineering which should bring this thing to $4+ in no time.

Cardboard

There are a few things they can do on this front in the near- and medium-term:

1) Refinance Parq loan at lower interest rate (I think they are paying 8%+ now in a USD construction loan; lucky for them that CAD is now strong)
2) Buy back the preferred at 10% after-tax yield.  These shares offer higher return than most of their investment ventures ;)
3) Further monetize non-core assets and buy back the common

OTOH, they would need to redeem 17% of the outstanding Series 5 preferred shares in January so that's a $15M outlay.  Given the net cash position they are in I am not worried about liquidity.

doc75

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 593
Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #107 on: October 02, 2017, 09:40:13 AM »
The Parq Casino opened this past Friday (Sept 29) at 11pm.  I've found surprisingly little media coverage of the event.  Plenty of coverage leading up to the opening, but very little after the fact. Just a handful of folks on Reddit making moderately negative statements  about the casino itself (poor layout, very small, no better than what it replaced, no buffet, ...) and some moderately positive comments about the food (biggest complaint: no buffet).  I guess Parq is only licensed for the same number of tables as the Edgewater Casino that they replaced. So perhaps they'll see how things go and push for more tables at some point in the future.  Still lots of construction going on in the outdoor spaces, and the hotels aren't even taking guests until end of October.

BUT:  The casino did indeed open, apparently without any huge issues.  I think this is solidly in the positive column for Dundee investors.

Cardboard

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 3356
Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #108 on: October 03, 2017, 09:20:22 AM »
It is very positive indeed to have an opening on time and on budget. I am also fairly confident that the $75 to $100 million in EBITDA/year for Parq Casino is conservative or based on past run rate from Edgewater.

Despite its troubled past, this team seems to have done a lot of positive moves over the past year or two. I am a buyer.

Cardboard

longlake95

  • Sr. Member
  • ****
  • Posts: 323
Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #109 on: October 03, 2017, 10:43:14 AM »
People are more bullish on the preferreds too. The Series III's have moved some 12% in a week.
« Last Edit: October 03, 2017, 10:52:46 AM by longlake95 »