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I'm guessing that LaSalle have decided to move away from UK retail; they are a global organization, so probably think they can make more money elsewhere on the globe.
Looks like a good investment for us share holders; even with a reduction in some rents (which is possible) your right in saying it'll still be better than the rents that they were getting from Tesco's for the store that was sold recently.
EPIC are focused on the Retail Warehouse market, something that isn't as much as decline as high street retail; unfortunately a lot of the markets don't discern between the two!
Retail warehousing has been treated the same as general retail in terms of valuations by most of the big agents; therefore YES i think undervaluation's across the board... sooner or later they will see this and valuations on retail warehousing will hopefully increase and help mover EPICs NAV up and help support some share value growth...
Hay Loggy, im with you with the sell off side of things... i used to invest heavily in the UK Newbuild market, timing sell offs in line with the exDiv date and buy backs at a later point... helped me make more than the divi, but it was a lot of work for a bit more gain...
Most the time, the SP would end up back where it was pre exDiv at some point, so probably just made work for myself...
With EPIC i dont think the SP moves as much with the divi pay outs as its monthly rather than once or twice a year...
Well i started buying into EPIC at £1.04... Luckily my average buy is now £0.56 so overall im up a nice amount... Think 80p is a very real valuation on the SP. NAV is starting to drift upwards and is currently £0.87/share so 80p would still be at a discount of 8%...
Renting income is still consistent and more than covering Divi and Debt and there has been clear signs in statements that there will be another increase in the divi at the end of the financial year (which i believe is sept?), which could help push them higher...
Gerry, i've only started doing the regular investment when i got into EPIC; typically i got 3 to 4 divis through the year, but with them paying monthly, it's a easy and cheap way to keep building my investment...
Gerry557 - retail is very unloved; but it's most City/Town Centre sites that are struggling with tenants. Out of town retail warehousing hasn't been hit half as much... and here is where EPIC is a good buy; the vast majority of its retail is out of town retail warehousing and so, in my opinion has been over sold.
Definitely hold this in your investment ISA or SIPP... and if you don't need the income, set up a regular reinvestment whilst the SP is low...
Gerry557,
welcome to one of the quietest boards on LSE! EPIC is a great REIT and if you look at the major shareholders, they are all your usual suspects. I personally think they are better possitioned in the market, with the vast majority of their retail in out of town locations where demand is still high and occupancy not an issue.
On this, i feel the SP has taken too much of a battering than it should have! With a SP of over £1 before 2020 and covid, i think there is still some great SP growth potentially as well as a great monthly divi which also hase growth potential.
EPIC have indicated in the latest dividend declaration that there payouts are still covered easily by the current rent collections and that the dividend will be reviewed again at the year end.
At £0.05/annum (7.5%ish yield at the min.) i think EPIC is massively undervalued... at launch they were paying out £0.055 and this was increased to £0.0575 in 2018. Looking at the financials and current rent cover, another increase of 10% isn't out of the question. Making this even more of a bargin!
If you look at EPIC major shareholders, there are some decent funds invested into it... not sure why the share price is not in line with others... Certainly think they are a bargin at the current price... my average buy price is now about 68p, but starting investing in them at the £1 mark and they were delivering a reasonable divi at that point...
Personally think there is lots more scope in divi uplift and also SP... but happy for it to stay low whilst i can keep re-investing my divis lol...
Thanks Cleeve... i think there were a lot of signs that an increase was coming; and whilst i thought they were going to announce an increase, the over negativity in markets and news made me think it might not be until later in the year...
25% increase is a great figure and to be honest, more than i was expecting this year!
So, anyone got any thoughts on the future dividend policy>? I think following from hints in previous updates and probably another one in this months dividend declaration, an increase in the monthly dividend will be on its way... but when and how much is an unknown.
Having looked at the changes previously taken and the current policy, i am hopeful of a solid declaration in the April update. Would be nice to see a 20% increase announced for payment in May, which i dont think is unrealistic bearing in mind the dividend was cut by circa 30% 12mths ago and the current cover they have.
More pessimistically, i think we will have another 3-6mths of the dividend at the current level...
Under UK tax law, Companies that are REITs can pay gross dividends to Share holders; meaning, the dividend is paid in full based on what has been agreed by the board.
UK tax laws mean UK citizens / tax payers must complete a self assessment tax return under certain circumstances; so most people receiving dividend (regardless of where they come from) payments will end up having to declare them and pay tax dependant on income etc.
If you are not a UK citizen or a UK Tax payer (i.e. you do not live and work in the UK) then you will not have to pay tax in the UK but you will have to check with the country you are living in tax authorities and pay any tax that you might owe...
If you haven't seen; EPIC have completed the sale of the Tesco Superstore site at Prestatyn Shopping Park to SuperMarket Income REIT... £26.5m which is inline with the Dec 20 valuation and higher than the purchase price of Dec 17... not sure what these two sums are, but the statement seems to imply that the rental yield on this was at the lower end of the businesses asspirations...
To maintain REIT Status, EPIC need to distribute 90% of its taxable earnings in any specific financial period...
That doesn't necessarily mean 90% of its income! So whilst rental income covers the dividend circa130%, this will hopefully transfer into an increase in the dividend payment; with the financial period ending 30th Sept, we might not see a increase in divi that soon. Though, with the latest government announcement on the opening of non-essential retail on the 12th April, i'm hoping to see some news on a change in dividend policy sooner rather than later...
Think me and Riskingit have discussed this previously. There is a certain amount of revenue that has to be re-distributed to shareholders to maintain REIT status... I doubt very much a special divi will appear here, they'll probably hold back some cash of "cash-flow" and potentially future investment.
But am very optimistic about at incremental increases to the divi once we see light at the end of the Covid tunnel and we should see a return to 2018/19 divi of £0.0575 when we return to "normal"...
Think me and Riskingit have discussed this previously. There is a certain amount of revenue that has to be re-distributed to shareholders to maintain REIT status... I doubt very much a special divi will appear here, they'll probably hold back some cash of "cash-flow" and potentially future investment.
But am very optimistic about at incremental increases to the divi once we see light at the end of the Covid tunnel and we should see a return to 2018/19 divi of £0.0575 when we return to "normal"...
Investment Managers for EPIC have purchased a further 121,000 shares in the business... now holding 1.7m shares in total and have committed to purchasing shares equal in value to 20% of there annual fees! Couldn't see them agree to this unless they had a positive feeling towards the assets!
I think the 25% SP increase is a real potential... if not more! The property has been down valued a lot over the past 18mths; so i believe that the portfolio has been undervalued (mainly due to the negativity around retail and also the fact there doesn't seem to be a difference between NAV of retail property on the high street and that on out of town retail).
Lets hope this lock down doesn't last too long and businesses can start to return to normal and we can start seeing some growth again!
Yes Rickingit... Divi looks like it will be increased; i believe EPIC are planning on making an announcement along with there year end figures.
SP has been pushed up in recent weeks by this anticipated increase and Momentum Global Investment have made a massive buy; im guessing they are banking on an increased divi and capital growth as we exit the covid battle and life slowly returns to normal!
100% agree with your principle of heavily discounted REITs... I followed a very similar process and am very happy with my income! Be nice to see the divi increased as i might have to start taking some income from them!