Nobody should be surprised to see “spin”.All companies do it.But the real estate sector is renowned for extreme optimism.Hawthorn UFFO was 27% of total for full year.Equivalent to 2p divi.UFFO will continue to go down as properties are sold unless replaced with good earners.Dividends likely to be 4-5p for next 12 months? Will NAV go down further? 134p was maybe 10p less than expected.The second half clawed back some losses.Best return for shareholders would be for this business to be liquidated to prevent the distinctly unimpressive Board from attempting any new initiatives.
All the good news was signalled beforehand,so nothing new in the results.But still a decent divi.And lower debt gearing should give business flexibility.Share price discount to NAV reflects the uncertainty in the sector and do not forget: this management has seriously destroyed shareholder valuein the last few years.
Impressive RNS today.Taking huge advantage of non- recourse finance to cram down lenders.Business should be completely restructured this year .And the return of dividends.Good to see the consortium partner putting in cash,albeit on a loan basis.
Share price of CAPC and the merger partner both go down.Why? Because the investment bankers will take stupid amounts of fees out of each of them.And the directors of both companies are too stupid ( or in the same trough) to find a way to stop the truffle gravy train…..
The final dividend will be in the 3p-4p range.We have already had 4.1p.Previous NAV was 131p.Updated number ,maybe 140-5p.As assets are sold UFFO will go down.Best use of surplus capital is to invest in good new assets.
We will have to wait until results in June to see if these guys have any wit about them.UFFO suggests a minimum divi requirement of (say) 7p? That is hard cash paid to all shareholders which will worsen the LHO leverage ratio.These guys would be idiots to buy back shares which further damages leverage ratios.Their only strategy to date is to sell stuff.That will reduce UFFO.If they know their market they should selectively be buying property assets again.Jury is out.For shareholders a big divi is the best way to return capital and up the share price.
Let me give you some business concerns to consider.This board has massively destroyed shareholder value.Arguably the best board talents have left.They are a shadow of the energy of 5 years ago.How much of their own personal cash have they got invested? SFA compared to their remuneration.Their view about acceptable gearing level is way more excessive than most other REITs.The bond debt is fixed and probably uncancellable cheaply.Have they the ability to find good new investments for NRR as opposed to the Bravo side- game? No evidence to that they are anything other than dead- men standing.
Pedsy,in September you suggested NAV was 160p.The actual 130p is 10p more than many of us thought it would be despite the 11p loss on Hawthorn.Debt reduction is not incredible.It has mostly been known about since the Hawthorn sale.And the gearing ratio at just under 40% is still considered high for a REIT.NRR was in debt trouble and had no choice but to sell the pubs- just to get to a stable position.Divi is excellent and should drive the share price,depending on the UFFO in the second half.NAV may have a few pence to fall yet,but a share range of 85-95p ought to be a fair discount for the immediate future.
If you read the results today,which are hugely positive,you will see that the company is still near the top of its 40% debt ratio.And they have considerable capex and dividend commitments.Cash is only £37m- with maybe £15m more from post bs sales.Absolutely no chance of share buy- back.More likely they will issue new equity to try and accelerate the move to retail parks etc.NB 30% of UFFO is non- recurring from Hawthorn.