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Madikwe - just to clarify a couple of things. I confused things with mentioning my deal at the end of my last post, sorry, there was no need to mention it, it just got in the way. PPA's are usually 10 years (and lots of times but not always, they are effectively a 5 & 5, with a break in favour of the developer at 5 years - so the developer can cut their losses). Henry Boot will have employees (planning, technical, project managers etc) that will work on maybe 5 to 10 deals each, perhaps more, depending on the anticipated complexity and timeframe for each deal. They're able to do that because there's usually very little conflict (particularly of time) between each job. They are carefully mapped out.....and things take absolutely ages in planning, It's a painful process.........and there is a huge amount of risk. There are no guarantees of success at all.
Just to give a bit more clarity to Vlad's discussion with the FD of Henry Boot. Planning permissions run with the land, not the applicant. Anyone can make a planning application on anyone else's land, right now, if they wanted to. You, me, anyone, on anyone else's land. No one is stopping you. But the planning permission that you paid for would be awarded to the land you've applied for it on (and therefore the benefit of the owner of course). You'd have paid loads of money to benefit someone else. So a PPA is simply the ability to have a legal interest, without a transfer of the land (and the costs associated with that) taking place, in order for you to have the security/knowledge that spending £600,000 isn't going to end up for nought. Even once planning has been granted it doesn't automatically transfer over to the developer. It's up to them what they do with it (trigger completion and build it out or try to sell it on in the interim after planning - you might have already been trying to tee it up to sell it prior to an expected positive planning decision of course.) I'm actually having a proper look at Henry Boot; I've just exchanged on a deal this week (Option agreement for 36 months - long story but there are some planning issues that mean we might need an extra 12 months over the usual 24 months timeframe for these sorts of deals). We didn't pay any option premium upfront but our commitment is well over £300k for the anticipated planning permission and then we'll decide what to do once we get planning - build it or sell it. I'm just trying to give a bit of clarity to people that might not understand the nuances of what a PPA is and why that land is deemed 'off-book' - they have a legal interest in it but don't actually own it or sell it until the value has been created by the planning permission.
Strictly - let me do some work on some of the sites they've got (or previously sold) and come back to you. The problem with PPA's is that it's a fixed margin (because the land is valued in the present day, not at the point of agreeing and signing the Promotion agreement, with the owner). There are other nuances but let me have a deep delve and come back to you.
I'm guessing, at this stage, the Boot will flip/sell their sites in the majority of cases too. I'll have a look and confirm my thoughts in due course.
The land owner only has to invest their time Madikwe. The developer pays for the legal agreement and all planning costs. That figure is usually capped too (but there should be enough headroom). Once planning is captured the consent is valued and a residual land value generated (but only once the developers planning costs have been reimbursed, as part of that valuation.
What's the split between land that is Optioned and PPA's Vlad? Options are typically 2 year deals (with an appeal clause) and are usually used where the land in question has a good, short-term chance of capturing planning). PPA's are usually 5 years (sometimes) but usually 10 years and are for opportunities of a longer-term nature. planning risk (you might have to get the land into the development plan before you can actually go for planning). We usually try to agree promote agreements (PPA) on an 80/20% split (so once planning has been achieved the planning consent is independently valued and the owner receives 80% of open market value and we receive 20%, after our costs have been taken into account too of course.
Hi English Patient, welcome to a test of, well, your patience tbh! If you're in for the long haul INL is it. If you're looking to flip it constantly......not sure this share is for you! I'm a long term holder here.....hoping, hoping that something will happen eventually.
Workspace Group has sold 13-17 Fitzroy Street in the Fitzrovia district of London’s West End for £92m. - just announced by Property Week - thought I'd share it.
Gas prices/china/russian energy manipulation/biden appearing to be senile/incapable/inflation/germany going left/france being sidelined/the slowdown in ecb bond buying. All this has led to volatility......and volatility is good for Plus500......right?
Interesting to see Kape Technologies buying ExpressVPN. In Kape's words 'Kape chief executive Ido Erlichman said it will complement the company’s cybersecurity tools to help users “protect their data and rights". Surely that's good news for Acuity in as much as it shows there's demand out there for quality cybersecurity businesses. Well, I hope so anyway!
Yep - totally agree with your sentiments strictly bricks. I'm heavily in RDW too (the only other housebuilder I'm in). I'm beginning to think........what's the point of INL? all the angles I thought they'd leverage.....seem to have fallen well short. I'm been for a significant period of time but.....it's just not happening, right now. It would be good to get an update from them.
Really beginning to think I've backed the wrong horse; I'm not one for religion but I'm praying there's good news (or at least positive momentum showing they're going in the right direction) to give me confidence to continue to hold, whatever the metrics say.
Perhaps a combination of poor purchases (or rather, good properties bought at the wrong price perhaps?) and overheads (refurbing existing portfolio/staff overheads) too great? They've got an angle (the REIT element) that should see them prosper, if buying the right kit from the right vendors (ie the vendor's situation). I thought it was a no brainer. I think they are sweating the assets however (looking at the air-rights potential of some of their freeholds to perhaps build more units etc etc). I'm sure they'll come good eventually.
That would make a great deal of sense - there's bucket-loads of money looking for innovative (but proven) companies to invest in at the moment and it would also dislocate Acuity from the KCR investment. KCR might come good in a couple of years of course (it's going in the right direction).
Interesting comment - there's alot of money out there right now looking for interesting/future growth/speculative (but in space that is established) - you could be right. It would also dislocate Acuity from the KCR mess (which might come good, but will take at least 2 or 3 more years to really come good). Hopefully we'll here about further acquisitions too.
I doubt they've hedged material prices to any great degree (they might benefit from 180 day payments but there's no way they wouldn't have suffered to some degree. They might have fixed price contracts with sub-contractors but INL themselves might be on a fixed price contract with the end buyer so I don't doubt there will have been some profit erosion (and if there hasn't been - wow - seriously - that will be a major feather in their caps in my view). On the flip side - land is in massive demand at the moment so hopefully they will have captured some consents and sold some sites or sold the houses they are building on. I also think their Hubb homes has legs (as a separate company too actually). I'll be interested to hear how that side of things has been going too.
Anyone got any thoughts as to where the share price might end up? 3 or 4p? More? less? By the end of the year or end of next year?
I'd be very surprised to see Redrow taken out - myriad reasons but not least because it's a massively expensive way of buying land.
There are far more people on here with more knowledge of world events but I get the feeling that we're in for some turbulent times over the next 6 months. That shambles of an afghan withdrawal (reminds me of the 1842 British withdrawal - and subsequent massacre - from Kabul - look it up if you're interested. Alot of present day issues that did it for America, had already played out for us (British) in the 1800's and then Russia (1970's). You can't conquer Afghan - it's too big a country with too little to justify doing so - particularly when you compare the amount of money spent to stop such an ephemeral and unquantifiable thing as 'stopping attacks from the west'. The camps, the men, the arsenals, the knowledge....they just move elsewhere. But anyway - the fallout from that shambles (US foreign policy in tatters, their reputation soiled) hasn't played out yet.....but it's going to and in my opinion.....it aint going to be pretty for any of us. Which, is good news for Plus I guess. Thoughts?
Have I read that right? The interim dividend amounts to $60mill in total. Buy-backs are another $54mill. So there's either going to be another $100mill in dividends coming in later in the financial year or that cash pile is going to be a step closer to a billion dollars in cash. I'd be interested to hear your collective thoughts as to what they will do with that money - if you leveraged it with some bank finance that's some serious buying power right there. But whom would they target? Interested to hear whom you guys would target or do with the money.
Strictly - I'm sorry - I've not been on the blog for a while even though I've been meaning to. Sorry. It's why I've not registered with a character etc - I can't commit to being a regular contributor on there. INL are really going to have to pull a rabbit out of the hat in my opinion to get the share price shifting. The stamp duty holiday was unbelievably busy for alot of solicitors/sales etc etc but then July and August have hit and it's like the entire UK have gone on holiday (and switched their phones off). I'm expecting a v v busy run in to xmas, when September kicks in. INL need to make material hay out of that 3 month run in. I'm in Redrow too (but I've no issues with them - they've plenty of sites). Materials and labour costs have gone through the roof however - be interesting to see how they hedge that (both companies I mean). Sell some sites would be my answer (demand is massive at the moment, for sites, in my experience presently.) And I expect Sept is going to be mentally busy on that front too.