Member Info for Etotheipi

I sold GSF from my income generating ISA having been mislead by the board about the 7p dividend for years. There are much better income generating funds out there now. I bought back in my SIPP as a speculative share hoping they'll wind up at a profit like Harmony and others e.g. Hipgonis. I'm guessing Drax are still in the market for battery storage having failed to buy Harmony's assets. I'll be voting for the resolutions, imo the board are incompetent.

Very English and what one would expect from a company that describes itself as the tortoise. Look like more of a bargain than I originally thought, I'm going to top up tomorrow.

By selling their stake in Arqiva.

Fingers crossed, much as I like the dividends the capital loss hurts. Maybe a sale at a profit would be the best outcome.

Mark did an excellent interview on the money makers podcast this weekend. Perhaps that's the reason, I had planned to top up this morning, I think I missed the boat.

9% discount to NAV should read through to GSF, let's see.

"How can a company return capital th shareholders?"

In chatgpt give the following:

"A company can return capital to shareholders in several ways, depending on its financial strategy, tax considerations, and shareholder preferences. The main methods include:

1. Dividends

Cash Dividends: The company distributes cash to shareholders, typically on a regular basis (quarterly, semi-annually, or annually).

Special Dividends: A one-time, often larger-than-usual dividend paid when the company has excess cash.

Stock Dividends: Instead of cash, the company issues additional shares to shareholders.

2. Share Buybacks (Stock Repurchases)

The company repurchases its own shares from the open market or through a tender offer. This reduces the number of outstanding shares, potentially increasing the value of remaining shares.

3. Return of Capital Distribution

Unlike dividends (which are paid from profits), a return of capital comes from the company’s equity or reserves, reducing the shareholder's cost basis in the stock for tax purposes.

4. Spin-offs or Split-offs

Spin-off: The company creates a new independent company and distributes its shares to existing shareholders.

Split-off: Shareholders exchange their shares in the parent company for shares in the newly formed entity.

5. Liquidation or Asset Sales

If a company is winding down or selling off a portion of its business, proceeds may be distributed to shareholders after liabilities are settled.

Would you like more details on the tax implications or strategic reasons for these methods?"

We're being gaslighted.

It is good news about the energised assets but I'm concerned about the RNS, so apologies in advance about being negative.

"

As previously communicated to the market, the application of the ITC proceeds will prioritise shareholder value. The Board is actively assessing this matter and engaging with shareholders and the Investment Manager on their use. Options under consideration include returning capital to shareholders through mechanisms such as a buy-back program, repayment of debt, investing in the portfolio, or a combination of the above."

My first concern and it could be me mis-remembering but I thought that it has previously been communicated to the market that the ITC was to be used to pay the 4p q4 dividend. Why is this no longer mentioned? In fact there's absolutely no mention of the dividend which is very odd.

Even worse, the options given for returning cash to share holders does not include the blatantly obvious one of an enhanced dividend. I don't agree that repaying debt or investing in the portfolio count as returning capital to shareholders. They are just the usual function of an investment trust. I am very worried and now feel that the only hope we have is that Achilles or Saba get involved and the Harmony asset sale goes through around NAV.

What a waste of time and money, the Saba proposals got 1% of non Saba shareholders and they probably pressed the wrong button. The worry is how are they going to unwind their position.

A 220% increase since then. For my portfolio the more comments the worse the performance.

It's a real shame that this trust is likely to sold to private equity. Early investors have taken all the risk while the portfolio has been built up and now are likely to lose the benefits of longterm reliable income.

Changed my mind and bought a whole lot more. 78% discount is a joke.

If I've remembered correctly it's 8% of the nav which is about £1, it doesn't justify a 70+% discount. I thought the cordiant move was positive, clearly the market disagrees. Another one for my bottom drawer which is getting a bit full.

Base rate to continue down then bonds yields reduce and savings interest decline. Money will then flow back into alternatives. In the meantime collect dividend income which seems stable.

Just another 83€ to go to get my wife's employee share scheme money back from July 2020. I believe that 8200%.

The board are requesting comments about the strategic review. Here's what I wrote:

"Thank-you for offering shareholders the opportunity to contribute to the strategic review.

I bought shares in PRS REIT in July 2021 as a income generating asset with some capital growth. The yield has never been outstanding but it's a well run company with as reliable an income stream as possible for a REIT. I would like this situation to continue and am strongly against selling out to private equity. I fully intend to vote against the re-election of Christopher Mills' and Robert Naylor."

The email address is: prs.cosec@jtcgroup.com

Christopher Mills was also a big financial backer of UKIP and is a backer of Kemi Badenoch (source Private Eye), not my politics.

Thanks for the link hghotshot. I've only just found time to read it in detail and generally agree with the estimates. The highlights for me are the estimated NAV of 222pps, the forecasted dividend for next FY of 13pps. That would give a 5.8% yield on NAV and a 10% yield on current SP. Hopefully, we'll see a re-rating given time. Unfortunately I don't think the official NAV will be published until late March. In the meantime the likes of the AIC will continue to quote a NAV of 536pps giving a very misleading discount of 75%. It's more like 40%.

I've done a bit more research and skimmed the corporation tax act 2010 part 12 and CTA2009 chapter 3. I don't think unrealised gains are included in the profit calculation for REIT distributions. I'm going with 90% of net rental income minus cost of debt. In 2023 this calculation ((40.2-16.22)x0.9x100/549.25 = 3.9p. Where net rental income is £40.2m, cost of debt £16.22m and shares in issue is 549.25m.

For 2024, net rental income is 47.3 and the other numbers are the same giving a dividend of 5.1p. This would be a yield on NAV of 3.8% and 4.85% on the current sp (105p) so unlikely to trade at a NAV unfortunately.

You are probably right JD7F, it's really difficult to understand what profits/income are used for the REIT rules. A lot of the increase in net profit are due to the increased valuations. Maybe something like 4.5p to 5p might be more realistic. Still good uptick today.

I am wrong here but a REIT has to distribute 90% of profits within 12 months. PRSR made £93.7m net profit, this amount must not be the profit in the REIT requirement but 90% of this is £84.44m, there are 549.25m shares in issue giving a forecasted divided for next financial year of 15p. Using the same calculation on last year's results would give a dividend of 7.7p, so clearly the calculation is not correct, this year's dividend was 4p, but it seems reasonable to suggest that the dividend for next year should increase significantly, maybe 8p. Add to that the NAV as increased by 11%, the story here is very positive. I've sold other shares to add more.