Bright Horizons: Navigating Tourism's Growth Revival
THE LIGHTHOUSE HOTEL PLC
LHL.N0000
Current Price: LKR 34.40
Fair Value: LKR 50.00 (FY25E)
BUY
PE 31 March
Estimates (LKR 'Mn)
Revenue
FY19
FY20
FY21
FY22
FY23
FY24E
FY25E
FY26E
850
510
184
427
731
997
1,146
1,429
155
-65
-175
-10
-19
199
252
372
103
-96
-197
-78
-120
101
153
255
Adjusted EPS (LKR)
2.2
(2.1)
(4.3)
(1.7)
(2.6)
2.2
3.3
5.5
-194%
-104%
60%
53%
185%
51%
67%
15.4x
N/A
N/A
N/A
N/A
15.6x
10.3x
6.2x
0.5x
0.5x
0.5x
0.5x
0.6x
0.6x
0.5x
0.5x
1.3
2.8
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
3.9%
8.1%
Dividend Payout
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
40.0%
50.0%
ROE
3.5%
-3.0%
-6.6%
-2.5%
-4.3%
3.5%
5.2%
8.2%
Leading boutique resort targeting luxury market
The Lighthouse Hotel PLC (LHL) operates three unique properties along the southern coast
of Sri Lanka. Jetwing Lighthouse, the iconic resort of LHL, is one of the renowned architect
Geoffrey Bawa's finest masterpieces overlooking the coastline of Galle and operated with
Jetwing's legendary hospitality with 90 rooms. Alongside Jetwing Lighthouse, it also
operates a boutique hotel, Jetwing Kurulubedda, with two private dwellings and four
rooms, and the trendy, easy-going, select-service Hotel J in Unawatuna.
Over 50.0% growth in the top-line resulted in a reduction of the net loss in 1QFY23
LHL achieved remarkable top-line growth of 56.1% YoY, reaching LKR 212.6Mn, driven by a
significant increase in tourist arrivals. This revenue growth had a positive impact on the
bottom line, as LHL reported a reduced net loss of 44.6% YoY, totaling LKR 24.7Mn in
1QFY24 compared to a loss of LKR 44.5Mn in 1QFY23. However, administrative expenses
continued to rise, primarily due to salary adjustments, leading to a substantial 99.0% YoY
increase to LKR 137.6Mn.
Occupancy rates expected to rise swiftly with higher ARR
The global tourism industry made a robust comeback in 2022, given widespread vaccination
efforts and the relaxation of international travel restrictions in many countries.
Consequently, tourism in Sri Lanka is rebounding faster than expected, with a strong
recovery observed in 1H2023. Furthermore, boutique accommodations have the advantage
of quickly filling up their occupancy rates while commanding higher ARR. As a result, we
anticipate a further 50% improvement in occupancies, with ARR expected to grow at a 3-
year forward CAGR of 7.6% between FY23 and FY26E. BUY
EBIT
Net Profit
YoY Growth (%)
Valuations
PER (x)
PBV (x)
DPS
DY (%)
PER based Valuation
Earnings (LKR 'Mn)
No. of Shares ('Mn)
FY24E
FY25E
101
153
46
46
EPS
2.2
3.3
Expected Average PER
Target Price
18.0x
15.0x
40
50
First Capital
A Janashakthi Group Company
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