TRIS Rating Co., Ltd. has affirmed the "A-" ratings to MINOR International PLC (MINT), formerly Royal Garden Resorts PLC (RGR), and its senior debentures (MINT078A, MINT07NA, MINT10DA, MINT105A). The outlook remains "stable". The ratings continue to reflect management's extensive experience and long-term proven record in the hotel and quick service restaurant (QSR) businesses of MINT. The ratings also take into consideration MINT's multiple sources of cash flow, its diversified hotel portfolio, and its leading position in the QSR industry. However, these factors are partially offset by the seasonal nature of the hotel industry, which is highly sensitive to external factors, and the highly-competitive and low-margin nature of the QSR industry. The "stable" outlook is based on the expectation that MINT's cash flow generation will remain strong; however, the company's leverage is likely to remain high in the intermediate term.
TRIS Rating reported that MINT was founded in 1978 by Mr. William Ellwood Heinecke to operate hotels in Thailand. The company's portfolio has grown impressively during the last seven years, making it one of the most diversified hotel companies in Thailand. Currently, it operates nine hotels (1,955 rooms) in Thailand under three well-recognized international brands: Marriott (franchise), JW Marriott (hotel management contract), and Four Seasons (hotel management contract) and its own brand, Anantara, and manages a 122-room hotel in Vietnam. All hotels are high quality properties in good locations and have been well maintained to preserve their competitiveness. MINT expanded into the food business in the second half of 2003 by acquiring MINOR Food Group PLC (MFG), which was established in 1980 and is the largest QSR operator in Thailand. MFG operates four international franchised QSR brands (Swensen's, Sizzler, Dairy Queen, and Burger King) and its own brand (The Pizza Company). At the end of December 2005, there are a total of 482 outlets and 76 sub-franchises located in Thailand and overseas. The management team of MINT Group, including several new top managers who joined the hotel and food businesses in 2003 and 2004, has extensive experience in operating hotels and QSRs in both Thailand and in international markets with international chains. Going forward, MINT's growth strategy will evolve through joint ventures, as a hotel manager for its hotel business, and through franchising its food business.
TRIS Rating said that MINT's revenue streams were quite diverse during the first nine months of 2005 (9M/2005) with 51% of total revenue contributed from the food business, followed by the hotel business (41%), the retail property and entertainment business (4%), and the spa and health club business (3%). For the first 9M/2005, revenue increased by 34.3% year on year (y-o-y) to Bt7,300 million due mainly to the increase of its stake in two hotels (JW Marriott Phuket Resort & Spa and Four Seasons Hotel Bangkok) from 50% to 100% and from 42% to 90.83%, respectively. The hotel business's performance improved with average revenue per available room (RevPAR) of Bt2,823 in 2004 (23.6% y-o-y growth) and Bt2,911 during the first 9M/2005. The performance of the food business also improved with revenue of Bt4,602 million (21% y-o-y growth) in 2004 and Bt3,803 million during the first 9M/2005 (15% y-o-y growth).
Although MINT's debt levels increased to partly fund its expansion, its cash flow protection slightly improves. The company's consolidated cash generation was sufficient to mitigate the higher leverage. The company's ratio of funds from operations to total debt was at 21.41% (non-annualized) for the first 9M/2005, compared with 25.07% for the whole year of 2004. MINT's total debt to capitalization ratio increased to 61.72% as of September 2005 from 57.51% at the end of 2004. MINT plans to raise Bt1,200 million in new capital through a rights offering in early 2006. If the transaction is completed, the company's leverage will improve slightly, said TRIS Rating. -- End
MINOR International PLC (MINT) Company Rating: Affirmed at A- Issue Ratings: MINT078A: Bt1,700 million senior debentures due 2007 Affirmed at A- MINT07NA: Bt500 million senior debentures due 2007 Affirmed at A- MINT10DA: Bt1,000 million senior debentures due 2010 Affirmed at A- MINT105A: Bt1,100 million senior debentures due 2010 Affirmed at A- Rating Outlook: Stable
TRIS Rating reported that MINT was founded in 1978 by Mr. William Ellwood Heinecke to operate hotels in Thailand. The company's portfolio has grown impressively during the last seven years, making it one of the most diversified hotel companies in Thailand. Currently, it operates nine hotels (1,955 rooms) in Thailand under three well-recognized international brands: Marriott (franchise), JW Marriott (hotel management contract), and Four Seasons (hotel management contract) and its own brand, Anantara, and manages a 122-room hotel in Vietnam. All hotels are high quality properties in good locations and have been well maintained to preserve their competitiveness. MINT expanded into the food business in the second half of 2003 by acquiring MINOR Food Group PLC (MFG), which was established in 1980 and is the largest QSR operator in Thailand. MFG operates four international franchised QSR brands (Swensen's, Sizzler, Dairy Queen, and Burger King) and its own brand (The Pizza Company). At the end of December 2005, there are a total of 482 outlets and 76 sub-franchises located in Thailand and overseas. The management team of MINT Group, including several new top managers who joined the hotel and food businesses in 2003 and 2004, has extensive experience in operating hotels and QSRs in both Thailand and in international markets with international chains. Going forward, MINT's growth strategy will evolve through joint ventures, as a hotel manager for its hotel business, and through franchising its food business.
TRIS Rating said that MINT's revenue streams were quite diverse during the first nine months of 2005 (9M/2005) with 51% of total revenue contributed from the food business, followed by the hotel business (41%), the retail property and entertainment business (4%), and the spa and health club business (3%). For the first 9M/2005, revenue increased by 34.3% year on year (y-o-y) to Bt7,300 million due mainly to the increase of its stake in two hotels (JW Marriott Phuket Resort & Spa and Four Seasons Hotel Bangkok) from 50% to 100% and from 42% to 90.83%, respectively. The hotel business's performance improved with average revenue per available room (RevPAR) of Bt2,823 in 2004 (23.6% y-o-y growth) and Bt2,911 during the first 9M/2005. The performance of the food business also improved with revenue of Bt4,602 million (21% y-o-y growth) in 2004 and Bt3,803 million during the first 9M/2005 (15% y-o-y growth).
Although MINT's debt levels increased to partly fund its expansion, its cash flow protection slightly improves. The company's consolidated cash generation was sufficient to mitigate the higher leverage. The company's ratio of funds from operations to total debt was at 21.41% (non-annualized) for the first 9M/2005, compared with 25.07% for the whole year of 2004. MINT's total debt to capitalization ratio increased to 61.72% as of September 2005 from 57.51% at the end of 2004. MINT plans to raise Bt1,200 million in new capital through a rights offering in early 2006. If the transaction is completed, the company's leverage will improve slightly, said TRIS Rating. -- End
MINOR International PLC (MINT) Company Rating: Affirmed at A- Issue Ratings: MINT078A: Bt1,700 million senior debentures due 2007 Affirmed at A- MINT07NA: Bt500 million senior debentures due 2007 Affirmed at A- MINT10DA: Bt1,000 million senior debentures due 2010 Affirmed at A- MINT105A: Bt1,100 million senior debentures due 2010 Affirmed at A- Rating Outlook: Stable