focusIR May 2024 Investor Webinar: Blue Whale, Kavango, Taseko Mines & CQS Natural Resources. Catch up with the webinar here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
SD, from the June 2021 accounts (FY):
"Our future dividend policy will be to pay dividends equivalent to 80% of UFFO, with any top up as required under the REIT regime rules to be confirmed at the full year results. Dividends will be declared twice annually at the Company’s half and full year results, with reference to the most recently completed six-month period."
I read that as two dividends per year with a potential third to top-up to comply with REIT requirements. However, it doesn't say that the two main divis are the same. So the second won't necessarily be another 4.1p but will depend on UFFO for H2.
Does anyone read it differently?
Pedsy,in September you suggested NAV was 160p.The actual 130p is 10p more than many of us thought it would be despite the 11p loss on Hawthorn.Debt reduction is not incredible.It has mostly been known about since the Hawthorn sale.And the gearing ratio at just under 40% is still considered high for a REIT.NRR was in debt trouble and had no choice but to sell the pubs- just to get to a stable position.Divi is excellent and should drive the share price,depending on the UFFO in the second half.NAV may have a few pence to fall yet,but a share range of 85-95p ought to be a fair discount for the immediate future.
Nice gain hopefully they will hold onto it.
I am still down on one purchase 3% but up 37% on the other. Can't complain.
Am I remembering right, two dividends a year with a third if there's anything left over to meet the REIT requirements?
I think I read that somewhere?
As people have said - great dividend, massive discount to NAV but also remember they are back on track in terms of overall strategy plus valuations seem like they could be turning the corner (inflation will help) so lots of great stuff stacked together. I agree, anything under 100p is a bargain, I'm glad I stacked in during the mid-70s.
I mentioned on here a few months ago about NAV at a buying point.
Now : still a great NAV, rent collection at 95.8%, div at 4.1p, SP at bargain price, EPS shortly to improve . And best of all, incredible debt reduction with no concerns ( re. loan maty) until 2028. dyor.
"The dividend will be paid on 14 January 2022. The ex-dividend date will be 9 December 2021, with an associated record date of 10 December 2021. The dividend will be payable as a REIT Property Income Distribution (PID)"
Any price under 100 is a bargain
Agree the dividend is extremely generous, & portrays a lot of confidence from the company. Has anyone worked out when the shares go ex div ?
If you read the results today,which are hugely positive,you will see that the company is still near the top of its 40% debt ratio.And they have considerable capex and dividend commitments.Cash is only £37m- with maybe £15m more from post bs sales.Absolutely no chance of share buy- back.More likely they will issue new equity to try and accelerate the move to retail parks etc.NB 30% of UFFO is non- recurring from Hawthorn.
Great results. Just checked fill or kill only on HL
cant by on HL for some reason
8.2 % dividend yield and a 50 % discount to NAV... Bargain basement at these prices..
In My opinion should start the upward move now. Dividend increasing
That’s a good point …a buy back would make sense but it would infringe the 40% LTV they treat as a doctrine ..
They could finance a buyback from the proceeds of asset disposals plus the 20% of profits that they don’t distribute in dividends
Let’s face it NRR now has far too much share capital for a business which halved when they sold off the pubs
Back in 2017 the share price was £3.60, today it is less than 75 pence . I think it would be reasonable for all directors but particularly those who were there in 2017 for an explanation.
Most of the debt is long dated 2028 bonds so although gearing a concern in a falling market, the finances are solid. Also unsecured.
With 8 million square foot of retail space and an average price per square foot of £11.54 I don't think there much to worry about to be honest. Next five years should be good for the company going forward whilst disposing the poorest assets and purchasing / building more assets. I wish they would follow the likes of London Metric where they build fantastic logistic distributions centres and so on.
Paying off debt is sensible if you are over- leveraged.NRR will raise more equity when the market perceives it has stabilised to fund expansion.That could come as soon as the results are released.Your concern should be that when leases expire how much lower are the new ones being written at.
Wait, it makes no sense to sell pubs and then just "pay off the loans" to reduce LTV, why would the business do that? Yes a high LTV is never a great aim for a company but the BTL payments should be covered by existing rental which stays fixed as at the point of origination with the only change being interest rate fluctuation. If the non-pub side IS indeed profitable (and covered by rent) why would you pay back the bank?? The 200m will still be liquid asset that they could use to buy more properties and is the best use of the capital.
I ignore broker ratings...they are written by young wet behind the ears ex public schoolboys who probably frequent Madame Sins after work for a spanking ..!
Actually they publish broker ratings as a way of getting themselves out there . Very often they send out another note , saying it's a reiteration of the previous note but changing the share price target by about 5 pence..waste of time .
You might as well read what Motley Fool have to say
Barclays 70p
Liberum Capital 130p
You sometimes wonder if they are writing about the same company.
7p gives me 9.5% and 11.2% dividend and hopefully a significant capital gain.
Worth waiting for.
Sorry I meant of around 7 pence..
Hi Mitch ...
I think those estimates sound very reasonable .
Barring another pandemic profits can be predicted with reasonable accuracy since revenue is contractually based and costs are largely predictable .
Dividends of around 8 pence are very attractive for a share priced below 75 pence ..
Best
FWIW Stockopedia has estimated EPS and dividend numbers for 2022 and '23. These presumably represent consensus figures from 6 analysts covering NRR.
For '22 the figures EPS of 8.08p and a divi of 6.47p; for '23, 9.08p EPS and 7.27p divi.
I shall mostly be holding.
In response to various points raised i would like to make the following comments
1. Ian ..I agree , they shouldn't have got involved with pubs in the first place ..it is not what they were good at . Core retail is their primary area of expertise and they should have focused on that
Conversely though, the pubs were highly profitable and generated half of all profits , they were also relatively risk free because most of the risk had been transferred to the leaseholders and publicans
As a result of a sale of the pubs EPS will be halved from 20 pence ish per share to around 10p...dividends will be halved from pre covid
2. They had no alternative than to sell the pubs. Due to lockdown LTV of their assets went from 35 % to 51 %
The sale of the pubs went to reduce debt so LTV has now reduced back to below 40%
So no £200 million bonus to buy new commercial properties
Any new acquisitions will have to be funded by further asset sales and recycled into new ones with higher net returns .the aim is to go for JV arrangements to reduce risk
3. The pubs weren't sold for a huge profit at all.. They were actually sold at a loss of £ 33 million
It's difficult to put a new fair value on the business until we see the interim accounts
Finally , the business has now contracted by half but the numbers of shares remain .. accordingly they may need to buy back more than 10% of the shares to salvage back some extra value for shareholders.
Limited amount of spare funds available though
As always please DYOR