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Hi Optimus - 'Is the market broken' is a great question. Essentially whole swathes of the market are trading at levels I have not seen in my 35 years in the industry. The whole financial sector, is going for a song, whilst Interest income for the banks should be flying, and, as discussed, the insurance companies in the annuities market (LGEN, PHNX, and now MNG). In addition, the discounts to NAV in the Inv Trust market are also incredible. Yes - our economy is structurally one of the worst in the West currently (for a variety of reasons) but some of the stock prices simply don't make sense. I'm going to hang in!!
It's almost as if predicting the future of an extraordinarily complex adaptive system with literally billions of agents is difficult, if not impossible. Oh wait a minute, that's 100% correct. Essentially the world is too complex a place to forecast with any degree of accuracy, so we shouldn't be surprised when they're out. That said, if you're a policy maker, you have to make decisions based on something, so you're broadly caught between a rock and a hard place!!
Interestingly, still at or around the 80p mark.
What isn't in dispute is a company which is growing on a PE of 6 and an a yield of 7% - that's just too cheap!
This is a laughable case of do as I say, not as I do. L&G is already the largest provider of bulk annuities in the UK - this is where they take on the assets and liabilities of a DB pension scheme. So, presumably then, they put their money where their mouth is and have a significant allocation to equities? Nope, it's about 1%!! And for good reason - why risk the vagaries and vol of equities, when you've received a premium large enough to pay all the benefits using contractual income assets such as gilts and Investment-grade credit. The whole article is written by someone with some knowledge of pensions, but not a deep understanding of how the industry works.
2014 - 2022 dividend growth was 5.8% pa, and whilst I can only see the final dividend paid in 2013, it looks like 2014 was up about 20% on 2013. This means that the 10 year 6.88% pa div growth is entirely plausible. I don't dispute the 382m number, I think this might well be close to £1 per share once the 7% buyback is taken into account, now putting this cash flow monster on 6x earnings potentially yielding up to 7% with a divvy increase. Feels a pretty comfortable holding position as we await the strategy to pay off. Much lower than here, and the I think acquirers would begin circling.
SD235 - Re the 91.8% figure. From the 2022 Annual results statement, under 'Operational Highlights' quite near the top.
"91.8% of rent due was collected during the year, 25 out of the Group's 27 lessees recorded no material rent arrears."
One of the reasons (main reason) why RPs go bust is because they don't collect the rents properly from the local authorities/housing associations. So, there is a real chance of getting the arrears back.
One point where DivvyH is wrong - HOME REIT is a completely different animal - it was housing the homeless, and did not have the guaranteed support from the government does for Social housing.
All quiet here - hope all is well.
I don't get the LGEN price. The Firm is growing and the bulk annuity business (where they are leader) is going to grow strongly for years to come, which also helps their asset management business. Yet the stock is on 6x earnings with a 7% yield. It's absolutely bonkers!! It is now my biggest holding.
Just to clarify, in the year to end March, they collected 91.8% of rents owed, so even before Auckland, they were 8% short. In fact, Auckland was not the main culprit behind this , that's My Space. It would be good to hear how successfully TP is moving away from My Space and whether they will still be able to claim the arrears back from the local councils. It has been a difficult year for TP, but the halving of the share price is way way overdone and that's why we're seeing takeover activity in the sector. Other big thing to watch out for is whether they increase the dividend in June (they should do as rents have been put up by 7%). Expect an announcement at the end of May.
Interesting. They also bought 5% of Civitas last week as well. Perhaps they've sold some to buy this, but nothing in the CSH RNS's to suggest this as yet! I'm wondering whether they are being investigated by FSA for insider trading.......! :-)
GRQ - This is a cash only bid - no shares being offered here I don't think.
Seems to be a few misconceptions here. This is a cash bid - you will NOT be receiving CK Shares, or any future dividends after the bid has gone through. The next (and last) CSH dividend is contractual as it is explicitly mentioned in the takeover announcement. In terms of holding on, if CK can get 90% of shares and voting rights, the remainder will be compelled to sell, so they'll have no choice.
So, around 20% of the company has changed hands today. If that 's simply CK hoovering up shares, then that's one thing, but if it's actually hedge funds or activist investors banking on a better offer (and prepared to vote as such) then this might well create a new dynamic, and potentially a better offer......?
Agree with a lot of that Tick. I don't think the IM will be concerned - it's confirmed that they will continue to manage the portfolio - I assume that this was part of the deal from the CIV Board's perspective.
For those who want to retain exposure to the sector with a 50% discount to NAV and a yield over 10%, I suggest you look at Triple Point (SOHO). The characteristics above are AFTER the rise of c18% today.
Some what surprised we aren't seeing a wave of messages on this Board? Certainly wasn't a lack of people when news was less good? I think we'd all like to hear from Punter 987 who sold his entire holding on 22 April....... :-)
Switched half my holding in CSH to SOHO at 52p. Cannot believe the stock is only up c10% on CSH news!!
Interestingly, Triple Point (SOHO) the other large layer at a huge discount to NAV and a 10% yield is only up c10% on this. I've just switched a block of CSH into SOHO, and may do more if the discount doesn't narrow.
Ok, so feels like great news, although still a 20%+ discount to NAV. Personally, I was quite happy to hold onto the stock and receive my 10% Yield until such time as the stock went back to NAV. So, somewhat mixed feelings here.....
Panorama programs are always scary - it's kind of their mantra, and frankly, is about as close as the BBC gets to gutter journalism dressed up as investigative. Unfortunately, the only property they will be able to sell at a decent price will be ones that are fully let and where rents are 100% up to date - ie NOT Myspace.