Member Info for Guitarsolo

Paul, welcome to the game that I've been playing for the last 6 or 7 years! Same pitfalls; 4 or 5 days to move funds (although better now with 2 day settlement on trades), price moves for or against you etc.

Slik's advice is good if you have £20k in cash to hand (or multiples thereof) but personally I haven't held much cash with bank interest rates so low (£20k in cash is 'losing' £1k+ in dividends!).

The only advice I would add (from personal experience) is that if you're moving more than one stock from bed to ISA, do them one at a time. Trying to juggle a few companies can be quite difficult. Also, check out for upcoming news dates for each company and choose a 1-week period when there is nothing planned to come out (e.g. half-year reports) as these can move the price up whilst you're not holding - presuming you're holding because you expect some good results! You can play around with ex-divi dates if it is going to make a difference to you on dividend tax or CGT.

Assuming you have identified a no-news week then look to sell into a 3-day rise on the hope you might get a fall afterwards!

Mostly I have come out about even, after costs. There's been the odd big success and the odd loss. And once they're inside the ISA you can relax!

Guitarsolo

Morning Devon, I'm still sniffing around these to make up my mind whether to buy some if the price drops to something desirable (sub- Euros 6.00?). However, I'm also trying to find a platform for how to invest. My usual options of HSBC Invest Direct and Hargreaves Lansdown both draw a blank. I'm guessing it's because they don't want to hold these in nominee accounts (not enough shares around?) and will only offer a hold-the-actual-certificate option. That would add extra costs and only make it worthwhile with a larger holding. Have you identified any way to buy VTA at low cost?
Guitarsolo

Sorry, I thought I was being clear! It's two dividends a year, each based on the half's performance (UFFO) with a potential third to top up to comply with REIT regulations.

SMJ, to what are you replying?!

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?

Choo Choo,

Where are you getting your data? What do you believe the current net debt to be?

I only ask because in my experience we don't get too many updates from RNWH (but when we do they're usually a pleasant read). So any published debt figures are often quite out of date. For example, the two most recent that I am aware of state:

June 2021 accounts: "As at 31 March 2021, the Group had pre-IFRS16 net debt of £16.9m (31 March 2020: £16.1m) as a consequence of the £29.5m acquisition of Browne"

June 2021 trading update (acquisition of REL): "Renew (AIM: RNWH), the leading Engineering Services Group supporting UK infrastructure, announces that its wholly owned subsidiary, QTS Group Limited ("QTS"), has acquired the entire issued share capital of Rail Electrification Limited ("REL"), ("the Acquisition") for a total cash consideration of up to £5.3m."

So the Browne purchase at nearly £30m didn't substantially increase net debt between March 2020 and March 2021 - because they were paying down debt with the cash generated. If we add the £5.3m to the £16.9m and assume there hasn't been any other debt taken on then we would have £22.2m. My guess is that come the publication of the March 2022 position we may be down to nearly zero debt again unless there are more acquisitions. It's one of the the traits I particularly like about RNWH is that they pay off their debt quickly to allow a strong balance sheet to easily fund further acquisitions when the opportunity arises.

Guitarsolo

MTB, I think the rat can go straight into the filter!

Redtom,
Thanks for the correction! I thought I had remembered the 30% as someone else's discount but if it is VSL's and the Bakkt share price continues to rise (or even just stay around $33) then come next September, if nothing has changed, there will be a big step change to the NAV when VSL can book the value on the basis without having to require such a discount. (There would still be some discount, but not 30%).
I've always wondered what they will do about their promises made to ward off those guys that wanted to break VSL up.... We'll see. They're still holding those shares in Treasury I think, they haven't been cancelled.....
Anyway, I've been here since not long after the IPO and have loaded up as they ditched the market loans in favour of balance sheet loans. These guys know what they are doing.....but never lose sight of who the ultimate borrowers are. There's a reason for the coupons!
Guitarsolo

Sorry for the double post earlier.....and to boot, a third (different) post hasn't appeared!

Anyway, continuing the Bakkt theme and the fact that VSL is trading at a substantial discount to the "true" NAV, should VSL do more buy backs whilst they have the chance? I've presumed that much of the previous buy backs (over 27% of the issued shares!) was funded from maturing investments rather than profits or debt. So it would depend on what investments mature in the short term to repeat the process. But if they are trading at something like a 30-40% discount to the true NAV with Bakkt at fair value, that's more than you'd get as the coupon on reinvestment.

BTW, my other post was basically just asking about whether there is a possible buying opportunity next August/September just before the 12-month close period expires and Bakkt potentially hits the NAV. It presupposes that only really VSL and a tribe of private investors (us!) are really paying attention for now. Bakkt is held on the balance sheet at a 20% discount because it can't be sold until next September/October. When announced Bakkt was at $28 (please correct me if I am wrong!) and is now $33. If people aren't paying attention before that hits the NAV next year, it could be an idea to set a reminder in your calendar! Just a thought.

Guitarsolo

Firstly, sorry for the double post! The back button shouldn't take you back to a screen to post a message again....oh well.

Going back to the Bakkt thing.......So we know that VSL is locked into its holding for 12 months. Let's say until September 2022 (please correct me if you can be more accurate). It is also holding it on the books at a 20% discount because it can't sell them yet even if it wanted to. Fair enough. But come September 2022 should we expect a significant increase in the share price as it tries to catch the NAV?

To some extent it depends if the market watches the Bakkt share price and factors this in to VSL. There is a chance it won't if they're not following it closely. Which might provide private investors with an advantage for once! Depending on what happens to the Bakkt share price (what was it booked at? $28?) and VSL's own share price, there could be a compelling reason to top up prior to the 12-months expiring and VSL's NAV jumping up?

Any thoughts? Should we set calendar reminders?!

Guitarsolo

Hi ADV, sorry I can't remember exactly when (and I couldn't find it with a search!) but I want to say about 3 or 4 years ago. naturally it caused alarm but it turned out to just be a technicality and so trading was resumed and no harm done. To be fair to VSL, I think the majority of decision-makers are in the US rather than the UK where it is listed. That's why I question where is the NOMAD?
GS

Hi ADV, sorry I can't remember exactly when (and I couldn't find it with a search!) but I want to say about 3 or 4 years ago. naturally it caused alarm but it turned out to just be a technicality and so trading was resumed and no harm done. To be fair to VSL, I think the majority of decision-makers are in the US rather than the UK where it is listed. That's why I question where is the NOMAD?
GS

We've had this before when the stock was temporarily suspended. One asks though, what is the NOMAD doing? Surely they should be highlighting procedural requirements to VSL if there is any danger of KIDs falling out of date or trading being suspended because of technicalities.

But behind the scenes, VSL doing well I would say.

Hi Devon, well there's a lot in that post! To answer a couple of points you raised:
- Litigation funding. I have dabbled in here before with the likes of Juridica Investments (got it, got out for small profit!). I've also looked into Manolete Partners but it was too expensive for the potential returns. If you can live with the idea of actually encouraging lawyers to pursue claims (!) then it's an area of interest. But I don't quite know how to assess value etc.
- Vodafone! I have some of these in my mother-in-law's account! They're way underwater but I see quite a lot of research that suggests the future cost of infrastructure investment will begin to wane (pipe dream!). But such a big beast has to come good eventually. I just wish they had lower debt.
Rea: Thanks for confirming you think it is the same coupon. If that has been paid to NCYF post results it would bring the 4.18pps report up closer to the dividend. I'll hope that was a factor why they felt OK to keep the dividend going.
Other: Impressed by your 400%!
All the best,
Guitarsolo (stuck in East Devon!)

I've now had a chance to look through the capital day slides, not the webcast (https://www.nrr.co.uk/investor-center/financial-results or file:///C:/Users/simon/Downloads/210930-nrr-cmd-final%20(1).pdf). As usual, there's a lot of management speak rather than plain explanation, but hey ho. The things I jotted down are:

Rent collections returning to pre-covid levels
£2m business interruption insurance received (balance due H2)
Occupancy at 97%
Valuations stabilising
New dividend policy will ensure dividend is sustainable and remains fully covered going forward.
FY22 dividend paid twice a year. Topped up at year end to ensure REIT compliance.
NRR now has £318m of drawn debt and total facilities of £533m with an expected annualised reduction in debt costs of £7m per annum

There's no projection of future UFFO (perhaps there is in the webcast, or the Q&A) which would give us an easy calculation for the dividend. I hope verbally they at least acknowledged that the cancelled dividend (understandable as that is) was a bitter blow to many. Even if you're not forced to sell with a capital loss, the cancelled dividend has caused pain. So it is all about how they build it back up again.

My feeling is that the share price doesn't reflect the quality of the assets, high occupancy, affordable rents, under-control debt etc. But ultimately, this is all driven now by the UFFO and the dividend.

Guitarsolo

I think the problem with CSN is it just bores the **** out of people! There's not much to get excited about - but then, who wants to?! The dividend record is terrific, even if the increases are inflation or just above each time.

It's not a priority for me to top up but, if I was going to, I would hold out for a chance into the 270s for sure or just forego it.

Guitarsolo

What was the market expecting if it has marked it down 3.5% on saying it was "on track"?!

Did they just see the bit about adjusted operating profit and not read the rest?

I'll be looking forward to seeing what the debt has reduced to as I think that is a key long-term issue to address. That's got to be brought down before the dividend can increase meaningfully (imo), which in turn is probably what is required to drive the share price higher. Likewise, reducing the debt makes the company more attractive in a takeover. But I am not hopeful of this as I've been a shareholder since 2012 or something and it's been forever mentioned and never happened.

Sit back and hold.

Guitarsolo

The last update made not long before the end of the accounting period (30.09) said that "adjusted operating profit" would not be less than £50m. With 79m shares that would equate to adjusted EPS of over 63p (it depends how much they adjust them!).

But if anywhere close, that put RNWH on a multiple of under 12 which for a no/low debt, consistently profitable and critical service provider still strikes me as cheap. I would add more but this is already my largest holding by value, and I generally want dividends so it has to sit in the growth corner of the portfolio!

Hi Devon, I hope all is well?
Thanks for your remarks. Interesting to hear that your REA prefs have paid their coupon. I wonder if that is the same coupon that NCYF remarked had been missed (at the time obviously)? If so, it would be a bit of a boost for next year's figures at least and might explain NCYF's readiness to dip into the reserve (i.e. if they believed the REA coupon was just delayed).
Your mention of Volta made me smile since, yes, it is one on my radar! In fact, I think I posted on the VTA board to see if there was anyone out there. Without unduly clogging up this thread, I do find it interesting because even currently the yield is 6.7% or more. But I need to see how they are going to grow it from there. Is it just by refinancing and releasing a bit of margin, or are there more and more opportunities for them to build on? Just like you, it's on my radar for as and when the market is in a panic about something! I have noticed it is creeping up from EUR 6 to more like 6.30. Ideally I would refer it at more like 5.50 to give that degree of protection and a better yield! Not sure how/when it would get there.
Meanwhile, PEY has stellar NAV performance and VSL knocks out the divis!
Stay well.
Guitarsolo

Shanny, beware a very large spread on these shares. It makes it definitely a buy-and-hold investment in my eyes. As for timing an entry, I'll leave that to you but I would check-in on any day when the market has a general panic over something (e.g. Evergrande or something unrelated) as it might be a chance to pick some up at a good price.