The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
Interesting to see the Capital funds building stakes in AVAP with another RNS today (for crossing threshold on 16th May) Milkwood capital up from 3.4% to 4.7% crossed 3% on 24th April.
RNS on 16th May IG Markets through Equity Swaps crossed 3% of voting rights
RNS on 28th Nov FourSixThree Capital LP NY USA reduced from 5.84% to 4.78%
BUT the big one hovering up shares is Jefferies LLC NY USA on behalf of Rangeley LLC USA with 25.78% as at 10th November 2023 with a second string via JMK Raper 0.1905%. (which can build to 3% without further market notification)
Rangeley has an interest in Value investing, recently looking at 'Covid casualty stocks' it is also very activist, getting on boards, changing management, taking private, refinancing it at lower cost etc..
With over 36% of shares declared to be owned by Capital funds (may be others sub 3%b threshold) with most owned in the USA the future looks interesting.
As always DYOR and best of to all
DZ bank (2nd largest banking group in Germany) has raised its fair value for BT from 160p to 190p. This aligns with HSBC raising their target price to 190p. Morningstar analysts had a fair value of 200p in place before the finals result . I expect we will get a few more updated raised fair values and targets from others.
Whilst the RNS on the sale of two ATR aircraft in quarters either side of 24 year end brings in $10m profit, without AVAP having to increase borrowing to finance the planes it does mean that these next two planes will not now be available for lease. So short term gain (in 6 - 9 months time) at the expense of longer term fleet / turnover /profit expansion. Do current interest rates mean there is limited profit in buying new planes for lease. I note that Ryanair are complaining of lack of planes (they blame it on Boeing output) but could high interest rates also be to blame?
Cord was ungeared at the holding company level, however debt at the 'see through level' is completely different (this is the debt of the assets they hold at the project level) below is the relevant bit from their update in March 24.
In aggregate, the Company and its portfolio companies had gross debt equivalent to £695 million at 31 December 2023, and therefore net debt of £593 million. This resulted in gearing as at 31 December 2023 of 4.7x measured as net debt divided by LTM EBITDA (including Company-level costs) or 40.6% measured as net debt divided by GAV[6].
in total about 70% of this debt is fixed rate (no details of how long for) this does not help investors to assess the overall debt risks involved.
I have held AVAP a very long time, itwas once a bright star in my portfolio, then came a takeover bid foolishly & greedily I bought more, then along came Covid and what a sad story since. Planes grounded, debt interest soaring etc etc...
Well where are we now? At least all the spare planes are sold or on lease - financials are known, cash is flowing in, now we need to see the debt come down to increase profits , so as far as I can see this is a play on interest rates reducing, or a new takeover/merger approach. The big question is when? for either
Forgot to add I like NAV which shows that debt is more than well covered , much of the NAV is in vehicles which are easy assets to sell and normally REDDE sells for above the booked price shown in the NAV
Having owned REDDE since Northgate days and believing in the synergy of the merger it has been good to see (after initial hiccups) the year on year growth in both T/O and profit since then, the statement today says that has continued into year end 24 (final results in July but looking good).
Redde has proved to be not only an excellent value share but also a growth share, through the Covid downturn, and high interest rates (to which Redde is vulnerable as it has large borrowings to finance vehicles). Well done
I like still low PE (around 7), Good Div (around 6%) increase to come?. Vehicle supply in UK now improving (this has been holding REDDE back in UK) better supply in Spain shows in most recent growth there.
I dislike the proposed name change, ugh!! and any attempt to buy Halfords as a whole unless in a fire sale or some of it's sites which will suit REDDE site expansion plans for greater geographic spread
Thanks Uncle_Doug , Great to be back on LSE. Having nursed a very sick wife for five years through multiple operations with the BIG C hanging over us, my time priorities had changed drastically. Despite my nom de plume (from my days as a short term trader) I now mainly invest for the mid to long term, as I did with SMDS some years ago, I loved the circular nature of SMDS's operation - largest UK collector of waste cardboard, recycled into new mainly single use product then round again. If all the takeover stuff falls through I will certainly run my ruler over SMDS again. All the best
I opened my initial position in NRR yesterday - I like the spread of small shopping centres (99% let on decent length upward only leases). Their management platform (with M&G as a core user), and the fact they have the possibility to build nearly 1000 residential units across several of their sites in the London commuter zone. They won't build them but will sell on the sites. My dodgy maths says 30K a site that would give an uplift to the NAV of around 10% if none of the value isn't already factored into NAV. In spite of my non de plume I now mainly buy for the long term and the high Dividend which is well supported gives a good return as I aim for a total annualised return of 8-10% over a 5year period.
OLD news, there has been no change since 30th April and little change in the short positions so far this year - an increase of 0.19% is not earth shattering. The good thing about short positions is that IF the BT price starts to move up quickly they will want to close or reduce those positions which often just lifts the price further. As always DYOR but do check the short positions info that is given on this site.
Took my initial position here yesterday. Found the Keplar trust info very helpful (if you invest in trusts sign up it's free).
I like - diversified assets mainly UK, the discount to NAV (in the past JLEN often had the highest premium to NAV of all the renewable investment trusts), Dividend yield, their initial foray into greenhouses (using waste heat from nearby Bio plant) and first investment in Green Hydrogen in Germany (second one on track). In spite of my nom de plume I am now mainly a long term investor so this one I tuck away and hold. As always DYOR all the best.
Over the last three months the SP has got up to 110p or near twice, we are there again today if we can get above and stay above at close I think it will auger well for a steady recovery. I don't expect any terrible shocks in the FR as the 9 month update looked OK. At present BT is able to fund fibre rollout from revenue ( + some debt) it is in a better position than many others planning similar the high current cost of debt against future returns is very different to when BR was very low. Today I broke the rule don't buy in to losses to avg down and doubled my holding in BT as the div seems pretty secure and at 7% provides a floor. As always DYOR all the best.
When the IP offer was supposed to be worth 415p I sold out at 412p as when I did my own calculations I made the offer worth around 370p but variable depending on IP share price $/£ rate. I knew Mondi would not raise it would be too diluting to their existing shareholders . If Suzano deal goes through I expect SDMS to fall back to the lower of the range before all the takeover talk (see graph between 267 - 325) as SMDS takeover will be off. (may be a great point to buy back in). For IP takeover to go through Suzano will have dropped out of IP so IP share price will be back where it was or lower than pre Suzano and the value will be back around the mid 350's at a guess. I suspect the recent price rise is more due to to DEUTCH starting a SMDS listing with a BUY recommendation and target of 400p (why now goodness only knows , never found them very helpful anyway) best of but as always DYOR
That's the problem when a share declares it may be subject to a takeover/merger then everyone who owns over 1% has to declare whatever they buy or sell hence the storm of rnsssss
Whilst the SP has more than halved over the last 4 years the profits have not, in fact they have stayed in a band near £2 billion.
Fear of competition and lower prices plus the needed spend to roll out FTTH (and 5G since BT acquired EE) and that the dividend will be reduced rather than profits plunging seem to be the downward drivers to the SP.
BUT investors seem to forget that BT has a massive advantage over the competition. It already has a national infrastructure backbone for both landline and mobile that can be easily integrated to provide a seamless end product to the consumer ( see the Halo product with I million already converted ). It has developed new techniques to put thinner /stronger more flexible fibre cables down it's existing ducts. and equally important it has the trained workforce to do the job NOW.
It currently passes 26000 new premises a week with FTTH and believes it can easily reach 30,000.The avg cost is towards the bottom of its predicted range of £300 - £400 per premise (City fibre are cherry picking but expect £500 a premise). Total BT spend for 15 million premises is predicted at £5.5 billion (Cityfibre are predicting £4 billion for 8 million passes.)The government is offering £5 billion to get 1 Gig fibre to every premise to ensure national rollout. Openreach/BT will get the biggest chunk of this and the vast majority of the rural areas are already BT customers as often there are no or limited competition.
BT only needs to convert existing customers to a fibre or fibre/mobile bundle product not spend vast amounts to acquire new customers from cold.
Goldman Sachs (backers of Cityfibre) estimate an enterprise value of £85 billion for Cityfibre when it passes 8 million premises.
SP may not be at the bottom yet but I for one will be adding on the dips.
Bear
As expected - Admin costs at £9.5m (£ 9.1m 2018) (originally expected to rise to £10m)
Dividend cover in excess of 85%
Dividend held at 5 P approx 5%
Expectation 2020 Dividend cover will be 95%
2020 will be the first full year of all properties being in house under 'Hello student' had hoped that would get us to full div cover Plus a bit. Till we get there the div payout is drawing out capital not adding to it.
All moving slowly in the right direction.
Let's hope 2020 expectations are fully met and (double) hope they are exceeded.
Bear
Increased turnover - great
Strongest ever order book - great
Steady stream of new orders (but many are just replacing partly or fully competed orders) - good
Year on year growth in Adjusted profit - OK but not so great
The omission from the update of the vital word PROFIT (without adjusted in front of it) leaves much to be desired as it most likely means that there will be no profit this year thus the listed PE ratio will be negative, cash will diminish (or number of shares increase if earn outs are in shares).
Many investors will not look at a company with a negative PE.
Looks like yet another wait for TPG to make a real profit so the asset base./cash grows instead of keep diminishing.
But what the heck owned some of these either as Corac or TPG for nearly a decade whats another year!
Bearraider
No idea why REDDE shares are falling other than Market doesn't like the idea of the merger? or suspects some nasties in either NTG or Redde accounts/trading? but no red flags in either companies most recent updates.
However I have noticed that the shorts in NTG are growing ( there are no shorts above 0.5% in REDDE) one of the NTG shorters increased from 0.5 to 1.1% on the 20th Jan.
Bear
hi Jolly
hard to call this one.
Negatives, share being shorted, could be some nasties in the figures of either NTG or Redde we don't know about? Market doesn't like the merger? After merger NAV will be lower than Share price. Currently NTG NAV is well above SP around 480p I think whereas NAV for Redde shares is 20p ar SP of £1. NAV always gives a gave a good floor under the shares if it is in readily saleable assets and trading goes belly up.
Positives. hopefully the combined market value will at some point be high enough to get into the Ftse 250 where trackers have to own shares (when DIGS went into the 250 the SP moved up nicely).
Synergy should reduce costs and increase profits, maybe some scope for cross selling whilst also diversifying business.
News would be good to make a rational decision but the most recent update didn't show any red flags. Unless the market really think this merger is a very bad idea there seems no reason for the sell off.