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Conygar has been one of the last real estate companies to embrace the renaissance in property values. True, it operates in one of the less vibrant parts of the country, which helps explain the 20 per cent discount to forecast book value. However, given the unrealised potential locked up in the development pipeline and the recovery moving to the regions, the lowly rating looks unjustified. Buy.
Great article in tomorrow's IC - The property boom in London and the south-east is finally starting to percolate out into the provinces and for Conygar (CIC), which has the bulk of its property in Wales, that's great news. Net asset value in the year to September increased by more than 13 per cent to 197.5p as the property developer started to crystallise some of the gains within its portfolio. As well as its rental portfolio, Conygar specialises in bringing land through the planning process and selling off parcels to retailers and housebuilders. And this is where hidden value can be found. Take the 93-acre site at Haverfordwest, for example. It is valued in the books at £17.2m. But in May just under 10 acres were sold to J Sainsbury for £13.75m, which represented more than five times book value. And once highway and infrastructure work is complete, at a cost of £7.8m, Conygar will start to market the residential land, which already has planning consent to build 729 houses. Another key development that is progressing well is on Holyhead waterfront. Planning consent here has been secured, although an application for a village green could reduce the area for development. But potentially, the mixed-use development is big enough for 326 waterfront apartments and town houses, a 500-berth marina and 50,000 sq ft of retail, leisure and commercial space. All this is valued on the books at less than £10m. Also in Holyhead, the company entered a £6m joint venture to develop and operate a nine-acre, 200-space truck-stop facility, which is expected to open next year. This is important because Holyhead is the key embarkation point for lorries travelling to Ireland, and a bespoke facility with sleeping and eating areas is likely to pull in more business. There are also plans to introduce logistics and distribution warehousing facilities on adjacent land, which are not part of the joint venture, and for which planning consent has already been obtained. Book value is just £3m. Meanwhile at Fishguard waterfront, outline planning consent has been issued for a 450-berth marina, 253 residential apartments and other tourist-related space. This is on the books valued at just over £1m. The total development land bank is currently valued at £37m, but analysts at Liberum reckon there is a potential 44 per cent net asset value (NAV) upside from the development pipeline; equivalent NAV upside of 87p a share. The contracted rent roll in the year to September fell by £2.2m to £12.2m, but this was mainly due to disposals that fetched £25.7m and made a £1.6m profit. Portfolio vacancies rose from 16.7 per cent to 18.2 per cent, although several negotiations are currently in place, which are expected to reduce this in the coming months. Group finances remain in good shape. Including £29.3m raised through the issue of 30m zero-dividend preference shares in January, gearing stands at just 9.2 p
Great results announced today, earlier than I thought but very pleasing.
It moves slowly upwards, next week will be interesting as results come out which should be good. I'm in this one for the long term as expect it to continue going upwards over the next 2 years.
Results expected w/c 8th December. Interesting comment from ST at IC - Also I don’t think that many investors have fully cottoned onto the fact that a management profit share agreement means that Conygar’s main board needs to grow the company’s net asset value per share by 41 per cent to 245p in the three financial years to September 2016 to trigger a payout for themselves. This means there is an even greater incentive for the company to realise gains on development properties and make some shrewd opportunistic purchases to create value. And this is what the senior management team have quietly been doing.
Early December me thinks
Would be good to get some news, nothing since July but staying long with this one
Joined you in at 176 earlier.
Did you read my last post? Hurry....
Recommended by Midas share tips today....should see a good rise here Monday...well done to all in.
Been looking at this from the sidelines but still consider it good value. The sector looks promising after years of inactivity, outside the London market. Recent announcements and fundamentals look positive so NAV and PE should look after themselves. Nice and boring just the way I like it so I'm in. GLA
Hi. You're not alone on here...I've been following CIC for around 6 months now and they're up around 25% since I bought in. Their market cap was less than the NAV at the time and it looked as though an upturn in the commercial market was probable so I was happy to take a chance. As you say, it's been progressing steadily for a while now...
is there anybody out there? just nod if you can hear me? lol.. I'm invested here since the questor team tipped this share.. ticking up nice and easy.. Anyone else in here or is it just me :))
Oops picked up the wrong article, that one was from 2009 Here is a snippet from the one Written a couple of days ago. Positive technical set-up Interestingly, Conygar's share price has traded in a tight range between 123p and 131.7p for the past 10 weeks. The 14-day RSI is neutral, currently giving a reading around 50, while the price is sitting on the 50-day moving average at 128p. That trend line has offered strong support all this year and every time the shares pull back to the 50-day moving average a decent rally has ensued. In my opinion, a breakout of the trading range is not just likely but could be imminent. The combination of director buying, a share repurchase programme, positive newsflow on the development pipeline and the embryonic signs of a recovery in regional property markets as investors head out of London to take advantage of the high yields on offer and play the economic recovery, is an attractive mix. Add to that a likely sizeable uplift in the company's net asset value when it reports full-year results at the end of November and the odds favour a positive outcome. Needless to say, I rate the shares a trading buy on a bid-offer spread of 128p-131p. My three-month target price is 150p, subject to a likely upwards revision post the forthcoming results.
From IC together with Director buying..... The company stepped up a gear last month by at 105p a share to snap up undervalued property assets in a placing that was supported by an array of institutional investors. Conygar now has over £100m of cash on deposit, meaning that its pro-forma net asset value (NAV) is around 140p a share. The board has already looked at £500m of potential deals and is conducting due diligence on two separate deals. Although no deals have yet been announced, Mr Ware's glowing track record in the City means Conygar stands a good chance of working with banks and institutions as they unravel problem property portfolios. SHARE TIP SUMMARY: So with increasing evidence that the commercial property market has hit bottom, and with Mr Ware at the helm, Conygar is sure to attract some compelling deals. The good news is that retail investors can still get in at the ground floor as, despite its strong financial position, the shares are trading at a 16 per cent discount to pro-forma NAV. That looks unwarranted and with the full benefits of the TAP takeover yet to come the shares rate a buy.
Decided to join you, looked like a good opportunity.
Great to see the SP ticking up at last. I first bought these at 1.19 but have bought steadily since and its now looking good. I don't think the Haverfordwest decision is priced in so that should give the SP a boost assuming its positive. Work at Parc Cybi seems to be rumbling along too. Looking forward to some news in the next 2 or 3 months that might move us along nicely. Very good management team in here.
Top Director Buys Conygar Investment Company (CIC) Director name: Mr Preston Rabl Amount purchased: 40,000 @ 105.00p Value: £42,000
Been looking at this one. Might have to tuck a few away!!!
This has certainly motored along in the last week.Tried to buy some more circas 88p the other week but couldnt quite swing it and missed out on the rise. Anybody have any ides what has caused this spurt.Im not sure when formal consent for Haverfordwest is due but it cant be far off
Have they been buying shares back in today
I'm very happy to hold this share and have just added in the last week. The senior team is first class and with a good track record. They've bided their time before making their application and hopefully they are in good shape. Leaving Haverfordwest to one side, this is a profitable company with tiny debt and great development potential that is likely to deliver value over the next 5 years plus. As the number of shares in issue continues to fall and the assets are converted to improved value this should do well. That's my hope anyway. I'm going to hold for the long term.
Conygar after 12 months of negotiations will the council have now made the formal palnning application for the development of a Sainsburys foodstore togter wit hthe residential elemnt The application has been negotiated and as a result of consultations so baring unforeseen nightmare will achieve a consent and cement the value of this important site
I bought the shares when I read about their development of a coastal project . Feed back from them when I asked about the timetable was excellent