Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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RNS Anything to worry about as an investor?
Lots of Private Equity funds are trying to purchase UK assets for bargain prices.
CEO and BOD need to be strong and refuse to budge until UK REITS improve.
GSK has sold GSK House in Brentford for half its book value.
Another example is Carlyle have taking over Southend Airport after asking owners
to pay up outstanding loans - the owners were meeting monthly instalment payments but
could NOT pay the remaining balance.
Sharp practices indeed.
I don't know how it works for them. Likely they'll have their own portfolio, and they will want to integrate the Bicester village project into it. Which would be different to just buying shares.
If any bid was to come for Bicester village collection
Surly the people interested in it would buy shares first then make an offer because they are getting such a discount on net asset value
Say Bicester is worth £1b the market is valuing them at £500m
Any thoughts anyone?
This is a really odd share.
It is remarkable how the market makers have been able to keep the share price fixed at almost exactly 25.5p now for days on end. The consensus is that the share price should be exactly one half of the net asset value of the company. It is unusual for the market makers to retain a fixed share price for so long a period. It will be interesting to see how long this fixed price will last.
As far as I know, there are no restrictions on how often a company can make use of a scrip dividend. A scrip dividend is like a mini “rights issue”. It bolsters the cash position of the company, eventually, over time, making it more valuable, as the net debt of the company is reduced.
Troajan
oops, i got confused. dismiss my figure. Still curious how did you get to yours
Troajan
It seems to me 20mil....How did you get 58mil?
58 mill,just there?
Generally you can always require if you so wish to have your divi as a scrip - of the SAME value as cash... In HMSO's the scrip alternative was largely very welcome by PIs - because it was MORE advantageous than cash... Is there a rule/legal restriction on how many times a company can make use of scrip of a different value than cash divi?... If there are none, and it is so advantageous for both company and investors, why the company is not doing it any more?...
There is a different between the profits from trading and the overall value of the company. As an REIT, Hammerson must pay out at least 90% of its trading profits. It has consistently done so, generally by way of the issue of a scrip dividend, by which shares equal to the value of the trading profit, about 2p per share, are distributed, rather than an actual cash dividend. Those shareholders wishing to have an income in cash can then simply sell their scrip dividend shares. So, in fact, with the current share price of 25p, a dividend of 2p represents a distributed profit of about 8% which is excellent, by comparison with other REITs, which generally, do not achieve a return (based on their share price) any higher than 6%.
Examining the financial facts has been a way more reliable path than just blindly accepting promises.
I don't think it's worth putting an effort into explaining someone's hopes or dreams.
So let's see the actual results (although some here are turning a blind eye on those).
Yuri,
'''....property market won't be in a very good shape in near term and consequently any disposal to maintain healthy liquidity - might be a very painful process.''''
In the RSN the CEO is strongly upbeat. How do you explain that?
Re:...so Hammerson will always pay a dividend as it is running quite profitably...
Not sure what imaginary alternative universe this came from but in here (the real world) net profits were consistently showing loss for 6 consecutive years. Matched with range of asset value write-offs - equity has drastically deteriorated from 6 Billions at the end of 2017.
It's not as disastrous as in office space segment (hugely leveraged lending and corps cancelling rental contracts because their workers say at home) but nonetheless property market won't be in a very good shape in near term and consequently any disposal to maintain healthy liquidity - might be a very painful process.
The low share price is a result of the company being seen as a risky investment, the risk being associated largely with its high level of indebtedness. This risk can be reduced, of course, if the company pays out its profits in the form of a scrip dividend.
All REITs must pay out all of their net profit so Hammerson will always pay a dividend as it is running quite profitably. It makes no difference at all whether the dividend is paid out in cash or by way of a scrip dividend, since the shareholder is able to sell the new scrip shares so as to have the dividend in cash, if he wishes. So, the form in which the dividend pays will have no affect on the share price at all. This is clear enough - in announcing that part of the profits will be paid out as a cash dividend, rather than as a scrip dividend, the share price has not altered at all, for the simple reason that the net position is exactly the same, in whatever form the dividend is paid. However, in the longer term, the company will become more attractive if the dividend is paid out in the form of a scrip dividend, since the indebtedness of the company will be reduced, making it a less risky investment.
For a long time now, the market has set the share price for Hammerson at one-half of its net asset value per share, so, with a NAV of 51p, the current share price of 25.5p seems in accordance with historic market sentiment. However, if the sale of the share in Bicester Village were to come off, then the share price would, of course, depart from this historic setting, since the company would then have a much lower indebtedness and most risk would disappear. There does not appear to be any news on this possible disposal, though.
This undervaluation is mostly due to how the dividend has been handled... About REITs, Investors can close an eye about growth but they are not going to blink about the dividend. Now we got a dividend at last, the sp should steadily increase. Plus the exciting prospect of additional good news should be coming -
Its still being priced like there was a pandemic on and malls were down to essential shops only.
Such a disconnect.
Interesting innovations at Brent Cross SC - Padel courts, Moorfields Eye Hospital consultants advising.
The CEO Rita-Rose Gagne has declared shopping trends are improving.
Indeed, it's been undervalued for a long while now, not helped by some of the boards decisions.
The news is very positive but very little uplift in SP..
Well, it might not have been explosive right now but the mid-term outlook looks quite good, which is what matters most (to me anyway).
Looks undervalued.
Get the value of the portfolio and subtract the debt and what is left is about x3 the present Market Cap
Imvho
A full year dividend of 1.5p per share represents a return of 6%, based on the current share price. That involves distributing only about two-thirds of the profits.