Nicco Parks & Resorts Ltd BSE Scrip Code: 526721 Other Leisure Facilities September 14, 2012 Equity Statistics Current Market Price Rs. 15.9 52 Week High / Low Rs. 24.4/15.2 Market Capitalisation Rs. crores 74.2 Free Float Rs. crores 29.0 Dividend Yield % 4.4 One Year Regression Beta Times 0.4 BSE Volumes Trend - Average = 3.73 Thousand 25 20 15 10 5 0 in '000s Relative Returns Business Summary Nicco Parks & Resorts Ltd (Nicco) is in business of leisure and entertainment and runs an amusement park in Kolkata, West Bengal. The company has been running the amusement park for last 20 years and has catered to 2.6 crore guests till date. Nicco has also diversified into extending overall consultancy for setting up theme parks and water parks in addition to engineering, manufacturing and supply of amusement park s rides. Company also undertakes turnkey contracts for setting up composite amusement park and waterpark from concept to commissioning. Nicco reported net sales of Rs. 32.5 crore and adjusted net profit of Rs. 3.4 crores in FY12. Nicco is the only listed standalone amusement park company in India, it also offers consultancy services for setting up amusement parks (from planning, to building and maintaining amusement parks. During the last decade domestic tourism had grown at 14% on an average and currently it is estimated at 55 crore. Relative to this, the amusement park industry generated only 1.9 crore footfalls during last year. Globally, domestic and international tourists comprise more than 50% of the total footfall at popular amusement parks. Nicco is currently trading at 22.9 times FY12 EPS and 4.4 times FY12 adjusted book value. 150 125 100 75 50 25 0 Sensex Nicco Returns (%) 1M 3M 6M 1Yr Absolute -3% -5% -20% -30% Relative to Sensex -8% -12% -24% -36% Shareholding Pattern 100% 50% 0% Sep '11 Dec '11 Mar '12 Jun '12 Promoter DII FII Others Board of directors Person Role Mr.S.N.Menon NED, Chairman, Non Indepedent Mr.Rajive Kaul NED, Non Independent Mr.Sujit Poddar NED, Independent Mr. Anand Chatrath NED, Independent Vice-Chairperson, NED, Non Ms. Pallavi P. Kaul Independent Mr. Tapan Chaki NED,Independent Ms.Pritha Sarkar NED, Non-Independent Ramavatar Goenka NED, Independent Mr. Arijit Sengupta MD & CEO Source: AR and CARE Research Note: NED: Non Executive Director, MD: Managing Director, CEO: Chief Executive Officer. 1 Initiative of the BSE Investors Protection Fund
Background Nicco was incorporated in March, 1989. The company is a joint venture between Nicco Corporation (a well-diversified business conglomerate) and the Government of West Bengal represented by West Bengal Industrial Development Corporation (WBIDC) and West Bengal Tourism Development Corporation Limited (WBTDC). The company has set up and runs the 40 acres theme park in Kolkata, Eastern India s first theme and amusement park. The park was set up with technical advice from Blackpool Leisure and Amusement Consultancy Ltd., UK, and was inaugurated on October 13, 1991. It is the first amusement park, set up in India, which achieved ISO 9001 quality management certification from a well-known European Certifying Authority Business Overview Nicco derives its revenues from three segments 1) Park Operations (73.2% of total revenues in FY12) 2) Consultancy, Contract and Sale of Ride Components (6.2% of the total revenues in FY12) and 3) F&B and other recreational facilities (20.6% of the total revenues in FY12). Geographically, the company derives 100% of its revenues within India. Strengths and growth drivers Core strength is prior experience (over 20 years) in establishing and successfully running large amusement park. Nicco is the only listed standalone amusement park company in India. It also offers consultancy services for setting up amusement parks, from planning, to building and maintaining amusement parks. Risk and concerns Slowdown in the domestic economy which would lead to overall lower discretionary spend, would have an adverse impact the operations of the company. Opening up of new amusement parks by the competitors, within the region. Future strategy and expansion plans The company plans to expand its consultancy business to diversify its revenue stream. To expand overseas by opening amusement parks abroad through joint ventures. Industry outlook During the last decade domestic tourism had grown at 14% on an average and currently it is estimated at 550 million. Relative to this, the amusement park industry is estimated to have generated only 19 million footfalls during FY11. Globally, domestic and international tourists comprise over 50% of the total footfalls at popular amusement parks. With large parks in India gradually converting themselves to larger destination parks with resort facilities, following the footsteps of large global parks, footfalls in amusement parks in India is expected to see an increase, going ahead. Currently, Indian amusement park industry is estimated to be generating revenue of approximately Rs. 2500 crores. Quarterly financials Quarter ended June 30, 2012 Income statement (Rs. crore) Q1FY13 Q4FY12 Q3FY12 Q2FY12 Q1FY12 Total income 8.3 9.0 8.9 5.8 9.4 Net sales 8.2 8.8 8.8 5.6 9.3 EBITDA 5.0 5.4 3.8 1.3 4.8 Ordinary PAT 1.1 1.2 1.0 (0.2) 1.3 Adjusted PAT 1.1 1.2 1.0 (0.2) 1.3 Growth (Q-o-Q) (%) Growth in net sales (7.3) 0.5 56.3 (39.5) Profitability ratio (%) EBITDA margin 61.2 61.4 43.2 23.2 52.2 Adjusted PAT margin 13.6 13.4 10.8 (2.8) 13.8 2 Initiative of the BSE Investors Protection Fund
Financial analysis In FY12, Nicco reported net sales of Rs. 32.5 crores up 88.3% y-o-y. Total income witnessed a growth of 89.3% in FY12 Employee, selling and administrative expense constitute major portion of total expenditure. In FY12, these expenses as a % of net sales were at around 63%. The company reported EBITDA margins and adjusted PAT margins of 18.5% and 10.2%, respectively in FY12. The total debt as on March 31, 2012 was at Rs. 3.1 crores compared to an adjusted networth of Rs. 16.9 crores. The company consistently has had negative working capital (since last five years). The company has paid a dividend of Rs. 0.7 per share in FY12, resulting in a dividend yield of 4.4% at CMP of Rs.15.75 per share. Annual financial statistics FY08 FY09 FY10 FY11 FY12 Income statement (Rs. crore) Total income 22.0 25.7 30.6 17.5 33.1 Net sales 21.5 24.4 29.3 17.3 32.5 EBITDA 3.7 3.7 3.9 3.7 6.0 Depreciation and amortisation 1.5 1.4 1.4 0.6 1.2 EBIT 2.2 2.3 2.6 3.2 4.8 Interest 0.7 0.5 0.4 0.1 0.4 PBT 2.0 3.1 3.6 3.2 5.0 Ordinary PAT 1.3 2.1 2.4 2.1 3.4 Adjusted PAT 1.3 2.1 2.4 2.1 3.4 Balance sheet (Rs. crore) Adjusted networth 9.7 11.2 12.9 14.3 16.9 Total debt 3.9 3.4 1.8 2.4 3.1 Cash and bank 5.7 3.3 3.4 6.6 5.5 Investments 0.9 2.7 5.2 5.2 5.3 Net fixed assets (incl. CWIP) 13.6 13.3 12.2 11.8 14.3 Net current assets (excl. cash, cash equivalents) (4.6) (3.0) (4.5) (4.9) (3.0) Per share data (Rs.) Adjusted BVPS 2.1 2.4 2.8 3.1 3.6 Diluted EPS* 0.3 0.4 0.5 0.5 0.7 DPS 1.2 1.2 1.2 0.1 0.2 Growth (Y-o-Y) (%) Growth in total income 17.0 19.0 (42.8) 89.3 Growth in net sales 13.6 20.0 (41.1) 88.3 Growth in EBITDA - 7.9 (5.1) 61.0 Growth in adjusted PAT 60.0 13.5 (10.2) 59.0 Growth in EPS* 60.0 13.5 (10.2) 52.3 Key financial ratio EBITDA margin (%) 17.0 15.0 13.4 21.7 18.5 Adjusted PAT margin (%) 5.9 8.1 7.7 12.1 10.2 RoCE (%) 8.3 8.5 11.6 15.6 RoE (%) 20.4 19.6 15.6 21.5 Gross debt - equity (times) 0.4 0.3 0.1 0.2 0.2 Net debt - equity (times) NM NM NM NM NM Interest coverage (times) 3.3 4.3 7.4 28.6 13.0 Current ratio (times) 1.2 1.1 0.9 1.2 1.4 Inventory days 11.7 8.6 17.7 11.6 Receivable days 12.6 12.1 18.0 10.9 3 Initiative of the BSE Investors Protection Fund
4 Initiative of the BSE Investors Protection Fund
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