Member Info for Riscoff

Fees?

I calculated about 57-58p also but by a different route. Could be more if SOHO goes up. Given the dire state of gilts I think that's a good price, as on NTA every .1% rise in 20yr seemed to wipe at least £2m off the retirement portfolio, and that 5.8% day recently was a bit worrying cf the last NTA when it was 5.1%! It's certainly a lot higher than the 51p share price of a few days ago also and at least rewarded even if less than hoped those who held on. On the shared ownership, that was a really good price actually, I thought there may be only 12-13m left in it. It's an easy one to miscalculate as they publish two loan values for it which move in opposite directions, one used in the NAV only for IFRS purposes, and the real one the "loan principle", which went up by RPI+0.5% each year, which is why the NTA is so always so much less! My only real disappointment in this gilt and swap rates environment was that proper value was not assigned to the real value of the break gain on the SW loan, maybe a bit, but likely not much. It was worth at least £13m mostly a gift to SOHO shareholders. The board will be in demob happy mode either retiring or lined up new jobs, there is no chance of it continuing, and voting against it now would just see costs escalate and value wiped out.

Hi Florence, I hope you are right. It was great to see the strong support recently from a private buyer also who knows the very obvious that this is worth a lot more than the S.P. and the last NTA.

Brace for a much lower NTA yet though as the long term yields, although nicely coming down before Iran War and Labour leadership fiasco when I last posted on this, are now a lot worse than your number. The key 20yr+gilt yields have shot up, the 20yr from 5.11% at last valuation to 5.5% today and over 5.8% a few days ago.

The retirement portfolio is v vulnerable to these rises and they could show up brutally in the NTA if something else doesn't counter it (like a sudden increase in HPI on the shared ownership portfolio).

Especially as the NTA has no recognition of the real cash value of the break gain which goes up as yields/swap rates go up.

So I think the dilemma is everyone knows the portfolio is really worth a lot more than 60p long term, it remains my biggest REIT holding, meanwhile today at this moment the valuation from the gilt related formula could have dropped quite a lot yet again creating quite a challenging bid/sale price scenario. I imagine this a big contributor to the delay.

I'm fairly sure it doesn't, we'll be presented the result when it's signed, as with the sale of the social housing portfolio. We have been instead assured of a result from "multiple rounds of bidding" involving "executing 50 NDAs" and "working to assure the b

Yes it is v cheap. Bidding is down to exclusivity for each portfolio. The previous vote in 2024 authorised the wind down so there are no more votes from shareholders as far as I understand it, unless everything falls through and there's a special meeting.

That is a really good point tichtich and I can't see them not selling now and I imagine it won't be long before news esp for the smaller SO portfolio. At the AGM I did put a few questions in and they were keen to stress that the operational strength had underpinned the guide price and I was reminded of multiple bidders esp. for the larger Retirement Portfolio, but nothing more than that.

Below correction AERI closed end investment co. not REIT

Shows what can happen and I imagine the cogs are set to sell. You prob know more but isn't AERI a high risk/ operationally stressed REIT with a large revenue drop due to lack of wind/sun, a collapse in spot electricity prices during negotiations, and required a v high risk premium to sell assets? RESI by contrast is v low risk and operationally strong, the highest risk is long term gilt yields re NAV (which are still 25 bps below levels at the annual report last Sep).

I cant really think of anything else to add to what I put below, we don't know the capital return we will get so all the NAVs and NTAs and break gain calculations are just academic. There were some large trades today which given upward movement in the price may well be buys. I will be at the shareholder meeting on Weds so will try and find out as much as they are prepared to tell.

The various NAVs and NTAs are quoted with or without loan break gain/costs as advised in the reports but the RNAV and "max realisable" NTA numbers are quoted as includeling these . SW loan is a break gain, lender pays the borrower, not a fee. So this coming down reduced the RNAV, not increased it.

Yes the prior post is correct- managed to contact RESI before close of play and they confirmed it is the change in break gain of 0.6p movement in RNAV per share, so the break gain included in the latest RNAV report is still 6.3p per share vs. 6.9p in the prior report.

Hi Good point it does need a double take doesn't it?!! The chart is about movement in NAV and I think all it is saying is that the break gain has reduced by 1.2m or 0.6p, due to a reduced replacement swap rate, rather than being revalued from 12.8m to minus 1.2m. So including/excluding is about the change. However any wiser person please correct me if wrong as the presentation is v confusing.

So what we have here is now very strong financial operations with high divis covered 1.38x or more, a very good debt structure which itself has value which will be unrealised, a huge reversionary surplus on the retirement portfolio which will be unrealised, and I am very much with you and the other posters about why then is it being sold.

It's if you arranged a long term loan at a very good rate (25 years during the lowest interest rate period in RESIs case), there may be a clause to break the loan at a gain rather than a fee. The loan itself becomes a very valuable asset as you are unable to get loans as good today and the loan provider makes a profit by breaking the loan and re-lending to another. In Resi's case, the debt break gain has been calculated for the Scottish Widows debt which is against the retirement portfolio at £12.8m, it's on pages 17-18 of the report.

Anyone going to the AGM on 4th March? I'm planning to be there. Just to complete the last thread the details of break gain (which we are told won't be realised) are detailed in the financial report on the website Pg 16, as are the manager incentives on page 40/41, which is a bonus based on 90% or more of the 2024 report NTA of 74.6p. I don't imagine they will give the expected value of the two distributions but I will ask questions around the meaning of those comments in the report which have caused speculation.

I think maybe someone got charge and gain mixed up somewhere along the line! But thanks to Howard anyway for making enquiries. I imagine the managers will be incentivised on the price achieved Vs NAV so you would hope that credibility would be shattered if achieving below what is a very low NTA report partly a quirk of timing. The share price for me is simply academic now as holding, Life Science REIT liquidation this week showed the share price can get it quite wrong (too low in that case up 20% after buyer revealed).

Just sounds like an example based on NTA as of 30/9/25, break gain and 2p fees. Report said bids are transferring loans.

Hi Howard I am amazed they told you this, are you saying they have told you to expect to realise 61.2p. if so that is very price sensitive information as that should now be the share price.

Thank you Howard this board is nice and lively now! Yes that's right interest rates have come down but because of political instability gilt yields have gone up, and you have been able to confirm that is how they value the properties. (Note gilt yields are down again since the measurement date of 30th Sep) The financial report claimed that once sales costs and debt breaks had been taken into account, the adjustment compared to EPRA NTA is actually upwards to 68p from 63p rather than a reduction. We don't know how much value purchasers put on this in their models for their offer price as they are inheriting the debt. No doubt they have their own DCF models and whatever the EPRA adjusted values are at the end of the day it's what the highest bidder will pay less costs. I wouldn't be in any rush to sell as the share price is already a low 55-56p cf the max NTA of 68p and the dividends will continue to be paid meanwhile. I agree there should be a minimum level below which it would be best just to keep operating and not sell, as the operational numbers are now very good. Once it's wound up I then have the issue of where to put it to get 8%. It looks like the shared ownership will go first so I am thinking of waiting to see what happens with this first.

The frustrating thing is that afor an individual to buy a shared ownership property or a retirement property, it's slightly more expensive than a year ago on average. However this doesn't translate to our collection of them which is reduced in value by 6.2% instead of increased, the only reason given for this I the report is Gilt yields ...

Financial detail section of report "Increased long-term gilt yields continue to negatively impact valuations

o 6.2% like-for-like valuation decline following 50 bps outwards yield shift"