Member Info for MattTheBrave

Sheltie - there is no such thing as truly binding terms until the owners (ie shareholders) have agreed until then, any other bidder is free to enter the fray, and the Company Board must give due consideration in the interest of shareholders. Where this happens, I know of no situations where the Board has rejected a higher cash counterbid from another party. I would say 50/50 whether this emerges, but ultimately, as the minimum you will get is 6.20 if you hold on, I think the optionality is pretty valuable here. I'm hanging on!!

...since I invested back on 12 March. Stock still looks cheap, but is no longer the absolute no-brainer it was back then. Might wait till it hits 25p before reducing........ :-)

Can finally spend some proper time managing my portfolio. Wonder if that will make things better or worse..... :-))

Thanks MH - yes I accept much of what you say, and clearly there is risk here, but it's priced for insolvency and hugely reduced NAV from the last valuation. I'm a bit confused by your numbers though? Are you comparing rental income with LTV figures? Those numbers of £m are not net debt numbers (which is c£400m)?

LTV falling is just a consequence of falling prices. Property is a riskyish asset, so prices go up and down. For me, it's all about rental income (which is much more stable) and the extent to which this covers interest payments and dividends. This position still looks pretty healthy, certainly more healthy than a 40% dividend yield would suggest (all IMHO of course!)

It's not about whether it's fine or not, or whether there's risks or not. It's about Gauging what's in the price versus the reality. The property valuations already take account of whether a property is vacant or not, and a 70% discount to NAV, with rent easily covering interest and dividends, and a yield of nearly 40% represents good value, particularly when the recent issue is caused by an incredibly inept RNS rather than a fundamental change to the business. The trick is making sure you size these opportunities correctly in you portfolio - less than 0.5% for me on this one.

You can keep repeating stuff, but it doesn't make it true. No one buys a property thinking they'll rent it for less. Rents fall if the market becomes awash with new properties or demand for rental properties falls. Given 98% rent collection, doesn't really seem like demand is falling. Most Companies who rent do so because they don't want to tie their capital up in an illiquid asset, or they cannot afford/get decent enough terms on a loan. And even if they do start buying, this would just push up prices and NAV for someone like Regional. We can agree that the RNS yesterday was a big mistake, but your understanding of commercial real estate is flawed. I've had dealings in this space for a few decades now, so I'm pretty familiar with it.

TOD - sorry, no. Rents are driven by the supply and demand for rental properties, not property prices. In fact it's actually the other way around - rents ultimately drive prices but with a lag. There is no evidence that rents are falling - actually, quite the opposite. Do you really think an investor buys a property on the cheap, and then cuts the rent.....? Madness. Most commercial rents in the UK are upwards only anyway. Do some research.

TOD - certainly well named.

Whilst uncertainty remains high, I just keep going back to the fact that the rental income is significantly above the interest charges and the dividend combined, whilst any lender gets real asset backing. As such, I think there's reasonable chance that the re-financing goes through with little issue. If so, upside of over 100% here I think, whilst downside limited. Just my view.

The debt holders aren't going to foreclose on this. That amount of asset value protection combined with the cash flow from the 98% rent being paid means lenders should be queuing up. Remember, we're not talking an increase in debt, just a refinancing. I think the share price move today will put pay to this being equity financed - and yes, the statement from the Company actually stating that an issue was being considered at a large discount to the the price was weird and damaging in the extreme, but does not mean the property is suddenly worth less. Anyway, whilst risks remain , the upside potential here now is substantial, and fortunately, my broker did allow me to trade, and I initiated a position at 13p this morning. Happily, you don't have to put a lot into these sorts of stocks to make a difference if the story plays out so just a couple of £k for me :-)

So what am I missing here. Debt of 437m, at 3.5% = 15.3m interest per year

Annual rent roll of £67.8m, so interest is over 4x covered.

Current annual dividend of 4.8p per share = £24.8m, so easily covered by rental income after interest - why do they need more finance??

Div Yield of 36%

Surely someone's going to come and buy this aren't they?

Hi GS - essentially yes. Annuity funds will largely be invested in government bonds, although there may be some high quality corporate credit there as well. The key though is that they will be exposed to medium to long term rates and inflation - or put another way real yields. So if you believe that real yields will fall (ie rates will fall more than expected inflation) then you will expect to generate a nice return in an annuity matching fund. However, it's probably easier to just invest in Fixed income or index linked gilt funds if you want to play that game. Is this something you're looking at as part of your DC pot?

Can't help wondering if this is just a clever wheeze by JD to scare out all the shorters and keep them away (he's under no obligation to actually bid at this juncture.) If so, I think it's working.... :-)

GSF also down but not as much as GRID. I wonder if this might be a reaction to all the battery capacity coming on stream over the next 18 months? My understanding was that this was all required for renewables generation, although the lower price of gas might have meant that a bit less storage now needed (until gas prices rise again!) . However, This still feels hugely overdone. I hade 3 purchases in the low 70s today, and I'll buy more if this continues in the 60s tomorrow.

I've been a long time bull of this stock, but these figures came out of nowhere for me. Very disappointing indeed, particularly after the good CMC figures. That 90m fall in trading revenue really is a kick in the guts. Only bright point is a small rise in the divvy. New CEO has his work cut out :-(

Yep, the cave is a pretty quiet place these days. A lot of the old stalwarts have gone quiet. :-(

KR1 NAV over £200m vs £164m mkt cap. Should see a nice rise today...... :-)

Thanks GS! That's the second time I've won by putting forward a name I'd (unsuccessfully) used the previous year. Lloyds in 2020 and 2021 (winner) and now KR1 in 2022 and 2023 (winner). :-))

:-) If I'm not too late, put me down for Capita (CPI). Thanks!!

Hi All - Nice post below Opt! I also had EPIC but sold out on the confirmation of wind up and invested back into a bunch of other investment trusts which have pretty much all risen since :-) Happy to have helped in some small way on the pensions question.

Well, it has been a quiet time in the cave this year - only c 40posts which has to be a record low since I've hung out here! Not having Hottentot around could be the main cause - boy, that guy could post :-). One thing I've always liked here is the diversity of approach. Opt v. much a trader, using derivatives, and going short as well as long. Me at the other end, very much a long-only, long-term buy and holder. GS somewhere between the two I'd say..?

Anyway, 2024 is a big year for me as I will be retiring in March - You might well see me on here a bit more regularly when I no longer have any Lords and Masters to serve on a daily basis (apart from the missus obvs :-) )

Anyway, Merry Xmas to all, and a very happy (and prosperous) new year!!!