Current Account doesn't know how much a full page colour advertisement in this newspaper or a full page advertisement in the Irish Independent costs, but obviously Sean Henneberry and Pat Coyle think it's money well spent if it means telling shareholders what a wonderful job they are doing running Ryan Hotels.
The fact is that this advertising splurge on the day of this week's annual general meeting coincided with the recent arrival of the Israeli hotel chain Red Sea and the McEniff brothers on the Ryan share register. Is this the first part of a pre-emptive strike by Ryan against a possible bid by Red Sea and/or the McEniffs?
It's hard to know what the aim of those "Dear Shareholder" advertisements in this week's papers is, as most of the information is already in shareholders' hands in the annual report they got weeks ago. So why go to the bother of producing colourful advertisements with pretty charts showing how profits, dividends, bedrooms, guests and asset value have risen in the past couple of years?
Some companies far bigger than Ryan - Independent News & Media comes quickly to mind - also take out adverts on the day of their annual meetings - but these are usually limited to a quarter page plus a picture of Tony O'Reilly. So why did Ryan feel the need to plough more than £30,000 into full-page newspaper advertisements?
Even Sean Henneberry's chairman's address was a defence document in everything other than name. Great emphasis on Ryan's "valuable" assets, and the "business is undervalued".
More emphasis was placed on how the group plans to realise value from its properties through a mixed residential/commercial development beside the Royal Marine Hotel in Dun Laoghaire and selling off surplus land around the hotels in Limerick, Galway and Killarney.
There is little doubt that the revised net asset value of €1.59 (£1.25) a share is a pretty conservative one and does not take into account the development opportunities and the value of Ryan's land bank. But the market doesn't tend to take much notice of net asset value estimates and, after an initial run up to €1.30 after Red Sea and the McEniffs disclosed their interests, the shares have fallen back to €1.17 - a 27 per cent discount on net asset value.
Even at this level, Ryan is trading on a higher price/earnings ratio than the far bigger and far more diversified Jurys and pretty much in line with British hotel groups like Friendly, Jarvis, Millennium & Copthorne, McDonald, Regal and Thistle.
By now, there is a general belief that a bid for Ryan is an event waiting to happen, with the most logical approach being a combined one from Red Sea and the McEniffs. The Israelis would be most interested in the four British and European city centre hotels, the McEniffs interested in the "family" hotels on the west coast, while either party might be interested in the Gresham and Royal Marine.
Sean Henneberry took time this week to talk up Ryan Hotels and he was quite correct to do so. Ryan Hotels is undervalued, but then so is every other small and mid-cap Irish stock, and there is no doubt that the McEniff's got in very cheap when they got their 5.3 per cent at an average of around 80 cents a share. Likewise Red Sea's 16 per cent stake came cheap at around €1.00.
If a bid does come - and all the logic points that way - the Ryan board is perfectly correct to boost the value of the company and make any offer as expensive as possible for the bidders. Certainly, the net asset value of €1.59, which would value Ryan at €119 million, sets an absolute floor for any bid and Red Sea and the McEniff's should not expect to pick up Ryan on the cheap.
