Good morning! It's Paul here.

I read an astonishing article in the weekend press. It stated that the cost of tax relief for private pension contributions has now risen to a staggering £53bn p.a. - enough to wipe out the entire Govt spending deficit. Bear in mind that this is mostly going to the affluent, and I don't see how the present arrangements can possibly be justified, or continued. So I think we'll see another raid on private pensions by the Government fairly soon.

I have an ancient SIPP, however it's a system which makes me very nervous. The money is tied up for years, and in the meantime who knows what awful policies successive Governments might implement to raid my savings? ISAs seem much more attractive - at least you could grab that money & wire it abroad, if a hostile Government were to be elected.

Elegant Hotels (LON:EHG)

Share price: 84.8p (up 5.7% today)
No. shares: 88.8m
Market cap: £75.3m

(at the time of writing, I hold a long position in this share)

Trading update - for the year ended 30 Sep 2017.

This company owns & operates 7 freehold "upscale" hotels, plus a restaurant, in Barbados. Note that renowned entrepreneur Luke Johnson is a NED, and owns 12.5% of the company.

Rather surprisingly, things seem to be going well;

Trading since the interim results in June has remained in line with market expectations. Whilst the Group is only 12 days into its new financial year, it is pleased to report that bookings are currently tracking ahead of the same period last year.

I say surprisingly, because this company is heavily reliant on tourists from the UK - who make up something like 70% of its revenues. So my main worry was that the post-Brexit plunge in sterling might trigger a reduction in British tourists visiting. Apparently not!

Also, the refubishment of one of its hotels is going to plan, with re-opening scheduled for the start of the peak tourist season.

Valuation - this share looks strikingly cheap, which makes me worry that there might be something wrong?

Zeus are forecasting 8.1p EPS for the year just finished, 09/2017. That's a PER of 10.5 .

For y/e 09/2018, they are forecasting 10.4p EPS, for a PER of 8.2 . …

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