Member Info for Maddox

There is a saying within the cyber security community 'that there are those businesses that have been hacked - and those that don't know that they have been hacked!' These announcements are unfortunately becoming a fact of business life, and destined to increase as mandatory reporting becomes the legal requirement. Whilst, the news that Sage have suffered an internal breach of security is very disappointing it is unlikely this will cause a material cost to the business. Dido Harding CEO of TalkTalk was embarrassingly inept in handling the reporting their data breach incident last year - but long-term damage has been minimal and the share price recovered. It will be interesting to watch how well Sage respond and manage the PR. It is these, what I call, 'acid test' moments that provide a great insight into how good the management team of a business is. A serious challenge such as this, if well handled, can reinforce confidence that you can trust them with your personal investment in their business. Regards, Maddox

There is a saying within the cyber security community 'that there are those businesses that have been hacked - and those that don't know that they have been hacked!' These announcements are unfortunately becoming a fact of business life, and destined to increase as mandatory reporting becomes the legal requirement. Whilst, the news that Sage have suffered an internal breach of security is very disappointing it is unlikely this will cause a material cost to the business. Dido Harding CEO of TalkTalk was embarrassingly inept in handling the reporting their data breach incident last year - but long-term damage has been minimal and the share price recovered. It will be interesting to watch how well Sage respond and manage the PR. It is these, what I call, 'acid test' moments that provide a great insight into how good the management team of a business is. A serious challenge such as this, if well handled, can reinforce confidence that you can trust them with your personal investment in their business. Regards, Maddox

Another jump in the sp today up 15p to 716p as I post. I'm wondering whether this is market reaction to the Sage Summit in Chicago. It seems that CEO Stephen Kelly has made a step-change in the pace of product innovation and is making a good job show-casing them in Chicago. That, together with the new partnerships and market positioning of Sage 'championing entrepreneurs' is starting to change perceptions. I like the bold ambition of Stephen Kelly and, whilst it's still early days, I think it'll come through in the numbers. If you have seen anything else that might be driving this sp rise - please post it up. Regards, Maddox

EPRA earnings up 22% to �36.1m, EPRA eps up 15% to 16.3p, EPRA NAV up 7% to 620p. Interim div up 9% to 6p/share. Loan to Value 35% - very conservative leverage. IFRS profit including revaluation gains down at �106.7m (2015 �208.3m) due to big uplift last year. Conversion to REIT in 2017. http://www.investegate.co.uk/unite-group-plc--utg-/rns/interim-results/201607260700101864F/ Ironically, UTG was the share I was most confident was Brexit-proof but took the largest hit!! Whatever, nothing of concern in these figures and outlook statements very positive: 'Despite the uncertainty caused by the result of the EU referendum, the fundamentals of our business and the student accommodation sector remain strong. The demand:supply outlook for student accommodation remains favourable and our earnings growth trajectory is underpinned by our efficiencies of scale and a high quality development pipeline, focused on cluster flat accommodation with a lower price point, where the rental growth outlook is strongest.' Regards, Maddox

Positive update and valuation uplifts on their student property funds - albeit independently valued prior to 23rd June - driven by rental growth and a positive outlook statement 'we expect to see continued high demand for purpose-built student accommodation' Regards, Maddox

Couple of points for your consideration: aa) Student accommodation is a very different species to commercial property (office and retail primarily); bb) The cost of developing student property will be dropping along with the fall in commercial property development activity; and cc) More land will be available at more reasonable prices for student accommodation development. The financial viability of student property development in Central London was becoming marginal in competition with commercial property development. IMHO the linking of the post-Brexit travails of commercial property with student accommodation is miss-placed. Every cloud as they say..... Regards, Maddox

Hi Nige, Well maths ain't got much to do with it - we're talking predictions of the future and that is obviously inherently uncertain. So FWIW just run my own numbers (assumptions) and my sp target from now until 31 Dec 2016 is 675p. Regards Maddox

First Half Results - the highlights: Operating performance ‒ Improved organic revenue growth to 6.2% (H1 2015: 5.0%), achieving double digit recurring revenue growth of 10.0% (H1 2015: 8.1%); ‒ Accelerated software subscription growth to 35.3% (H1 2015: 25.4%) in line with planned transition and corresponding decline in SSRS revenue of 6.3% (H1 2015: -2.0%); ‒ Customers embracing closer relationships with a 50% increase in subscription contracts to 842,000 (H1 2015: 561,000); ‒ Strong results in Europe, North America and Africa were balanced by a slower performance in Asia, which benefited from non-repeating revenues in the prior period. - An 8% increase of the interim dividend to 4.80p. - Underlying cash conversion of 111%. So the 22p drop in the share price is surprising and I presume in response to the fall in margins from 28.2% (full-year 2015) to 25.4%. However, this fall was flagged and due to an increase in marketing spend. The full-year target of 27% operating margin remains in place and the CEO and MD repeatedly stated that they are confident of hitting it and 6% revenue growth. So IMHO little to be concerned about, in fact there was much to be optimistic about in these results. The transformation of Sage appears to be working albeit it's too early to be evident in the top-line figures. Growth in new product sales (all priced on a SAAS model)look very encouraging but primarily customer conversions rather than new customer wins thus far. Also, this decisive transformation is causing some collateral damage with office closures and a shedding of staff in non-strategic areas. Seventy of the top one hundred staff have changed with thirty new recruits to execute the new strategy. So with Mr Market taking a different view to my own I'm tempted to pick up a few more. Regards, Maddox

Unite has been tipped in the Investors Chronicle BUY at 600p. Key points: currently trading at a discount to f/cast NAV of 657p 31/12/2016 and 709p 31/12/2017 (Liberum figs. Prospective yield 4% from conversion to REIT. A strong and growing student market - BREXIT proof. Regards, Maddox http://www.investorschronicle.co.uk/2016/04/28/tips-and-ideas/share-tips/get-into-bed-with-unite-rMWZBQ0vWIPTKv3kHrwRJJ/article.html

Unite have secured another site for development in Liverpool with planning permission for 713 student beds - but Unite think that this can be upped to over 1000 beds. This is scheduled to open for the 19/20 academic year - so a nice bit of forward visibility of NAV growth. Their target return on cost is >8% for regional developments. Another point is that the £70m cost will be funded from internal resources - that I'm interpreting to mean that they will be staying within their conservative <40% loan-to-value financing. This despite the anticipated increase in dividend yield as they convert to a REIT. NAV growth and increasing yield - what's not to like. Regards, Maddox

USB reiterates sell recommendation and 490p sp target. Regards, David

Jefferies Group reiterate their BUY recommendation and up their share price target to 710p from 670p.

At last we see an upgrade .... Sage Group The PLC (LON:SGE) was upgraded by JP Morgan Cazenove to Overweight rating in an analyst note issued to clients and investors on Friday, 4 December. The firm after the upgrade has GBX 670.00 target on the stock. JP Morgan Cazenove’s target is 18.48% from SGE’s last price. hxxp://www.financialmagazin.com/jp-morgan-cazenove-time-to-give-faith-in-sage-group-the-plc-lonsge/ This is what I've been expecting Regards, Maddox

Hi Mick, Good spot. Very much like the Thomson Reuters clip from CNBC: Stephen Kelly is a very good communicator - comes across very well. I like this theme that Sage are looking to service the SME businesses that are the 'heros of the economy' driving economic growth and creating employment! Powerful market positioning towards what is a huge Global market offering their new Smartphone optimised cloud-based accounting services. Regards, Maddox

These results show that Sage is performing well. The key metrics are: >> Revenue growth target of 6% was met; >> Operating profit £380m is up 8.3%; >> Underlying eps 25p up 12.6%; >> Dividend up 8% to 13.1p; and >> Free cash flow up 29% to £296m (c. 21% of revenue). Which on the face of it make the initial sp drop this morning look a bit excessive, even if you factor in that the analysts seem to have higher expectations than Sage is prepared to accept? Underneath these figures there is a lot of transformation taking place: >> Move to subscription pricing that depresses revenue in the short-term: >> Restructuring to become a Global business from a federated country- specific: and >> Launch of new cloud-based products. Breezing quickly through what is a huge amount of detail they appear to be making good progress on its transformation plan (as outlined in its Capital Market Day in June 2015). However, it’s still very much early days and there are up-front costs and problems and issues in some areas but also many signs that the strategy is sound, they are doing the right things and it appears to be working. Regards, Maddox

Hi Guys, Well the full year results will be out on the 2nd December - so we won't have too long to wait. I'm long and set out my views: hTTp://www.stockopedia.com/content/sage-has-rediscovered-its-mojo-98464/ so I'm also keen to see whether things are progressing as well as I hope. Interesting article with Stephen Kelly CEO, a year into the job, on the 5th Nov: hTTp://www.cbronline.com/news/cloud/aas/force-for-change-sage-ceo-one-year-in-4711011 '"Even now our growth in subscriptions is 30% plus, so we'll continue to see momentum and healthy growth and that portion of our business will grow faster. And what we've said on perpetual licences business from quarter to quarter is going to go up and down. And some quarters it might go down." "Generally the trend is good on licences and the really accelerated growth is on the subscription business. So we do this right and challenge ourselves pretty hard to say within that we want to maintain 28% margin. We are very profitable, create great free cash flow and progressive dividends compared to our competitors. The 28% operating margin underpins the business" Sage, he says is not expecting a pinch.' So I think there is cause for optimism, but we'll see.... Regards, Maddox

Despite the share price volatility we're experiencing Unite is progressing extremely well as confirmed by their fund valuations announced today: 'At 30 September 2015, USAF's property portfolio was independently valued at £2,017 million representing a like for like increase of 2.1% during the quarter (11.1% in the nine months to 30 September). The portfolio comprises 26,813 beds in 75 properties across 24 University towns and cities in the UK. LSAV's investment portfolio was independently valued at £720 million, up 2.3% on a like-for-like basis in the quarter (14.8% in the nine months to 30 September). Following the practical completion of the 759 bed Angel Lane development in Stratford in August, LSAV's investment portfolio now comprises 4,636 beds across 12 properties in London and three properties in Edinburgh. The increase in valuations is driven primarily by rental growth and eight basis points of yield compression in both USAF and LSAV on a like-for-like basis in the quarter (54 and 69 basis points respectively in the nine months to September). The overall USAF portfolio is now valued at an average yield of 5.8% and LSAV's portfolio at 5.1%.' ....and the letting demand remains extremely robust: 'The lettings cycle for the 2015/16 academic year is now largely complete. Unite's total portfolio of over 46,000 beds has achieved strong occupancy levels, with 99% of bed spaces let delivering rental growth of 3.8%.' This last piece of news obviously bodes well for the rest of the year. Place this organic growth on top of the further developments and acquisitions and the stars appear to be very much aligned for Unite. Regards, Maddox

Hi Sampson, the offer is now unconditional and so that's it. The offer will now remain open for acceptances for two weeks. In theory if you don't accept you could get locked in to a delisted company. So I'll be accepting and moving on to some other attractive opportunities I have in my sights. Good luck with your future investments. Regards Maddox

Just goes to show what Financial Institutions (managing our money) might achieve if they had more balls. Elliott bought in or around the 131p offer and stood to lose substantially should Lone Star have withdrawn. However most of the Financial Institutions with substantial holdings meekly accepted what was clearly a poor offer price. Congratulations to all you guys who held out for a better offer!

Press report that Lone Star has increased its offer to 141p in response to Elliott.