Member Info for Wigwammer

Wow. Professional valuers state that the St David’s Centre had only fallen in value by 7.6% between Dec 19 to end March 20. Substantially better than my guess would have been. I imagine the same team would have dropped the value on a premium asset like the Trafford Centre by less, perhaps 5%, suggesting a valuation well north of £1.5bn. While commercial property is less liquid, the market for risk assets generally has improved since then. The CEO has repeatedly stated that selling all or part of the premium assets may form part of a recovery plan - it appears their prize asset is worth more than some thought. Atb

Sctratching your head? Probably nits... sain evidently would use the 2020 rent and apply a 6.25% yield. My advice is - don’t ever let this man sell your property :)

Moving on from silly talk comparing the TC with far inferior assets - i suspect one possibility that may be explored is offloading a partial stake in TC for a reduction in debt and a waiver of covenants. It may well be that the debt holders - specialists in lending against commercial property - can be appeased by diversifying into one of the highest quality assets in the country. That’s assuming they have the brains to realise covid won’t impact forever (which I’m sure they do).

Thank you for conceding that 2020 is not a reasonable base on which to value TC’s rent into perpetuity, in contrast to your prior post talking about current receipts. No one is arguing there will not be a revaluation. I would imagine TC’s marketable value has dropped around 8% since the start of the year to around £1.5-1.6bn, as the movement in Savills yield suggests.

I think there has been institutional sellers, but they have eased up in recent days. Liquidity in both directions is now about even, whereas it has been sitting heavily on the bid. It’s now just a tussle between new pi’s getting interested, and bored pi’s selling. I’m happy keep my position and see it through.

Is 2020 a reasonable base year on which to value the TC’s rent potential into perpetuity? It’s a rhetorical question btw.

It appears Savills agree with me. At a 6.25% yield TC is worth £1.5bn. If a significant part of that value is realised in part or whole then the shares will potentially multiply. ATB

My impression is there has been a large background seller(s), and for the first time in weeks they are easing up. The evidence being that there is now decent liquidity in both directions. It may take until July to reach agreement or it may be done sooner. The positive is that if there was no basis at all for agreement there would be no point continuing the discussion. Best of luck with your other investments.

Shami - this is similar to last year. Results were pushed back after delay to agreement with trustees/lenders, and then the additional complication of accounting for wipac. But the positive is that agreement WAS found in July 2019. This year the regulator is making their life a bit easier by pushing the required date back so easing the workload during Covid. My hope is that after an impressive 2019, trustees and lenders will be willing to give new management a fair shot. Feels like a more balanced market for CAR shares today - at least at the minute, decent liquidity in both directions.

“The Board is pleased to announce that trading for the continuing businesses during the second half of FY2020 reflected a continuation of the positive momentum seen in the first half of the year. Consequently, the Board expects to report, subject to audit, underlying results for the continuing businesses for FY2020 in line with its expectations...” ... that’s not a bad message to be relaying to the trustees.

The negotiations undertaken last year required agreement to be found with the pension trustees before the banks agreed to terms. Suspect the same will happen now - it was completed early summer but hopefully with new management we will see something done faster. Agree this is high risk but with high potential rewards.

Hello shami. What is the source for this thinking please? .. “I think previous CEO was asked to leave because trustees want to bring in new management“

I don’t think it is that strange. There is likely a large seller sitting on the bid, and the MM is just moving it about a bit to make it look like there is a market. Combined with the erroneous news story - it is all a bit shoddy and amateur for a company with a full listing.

It appears they do give a damn after all.. a little unnecessary .. “Still no word regarding the BODS or non-execs. taking a 20% pay cut to show solidarity with their beleaguered staff. Not surprisingly given their recent track record. Couldn't give a damn seemingly just happy to continue watching the business fall off a cliff with no shame whatsoever.”

I agree shami - all three of the core businesses have the capacity to generate growing cash flows over the medium term. The pension deficit, if managed correctly, can be brought under control over time. The average maturity here is 14 years which gives them time. With new management in place, a disciplined approach to capital management, and potential for growth - the £4m market cap has the potential to multiply many fold. High risk/high reward - but I suspect fortune will favour the brave.

Sain. Did my post just say “less assets - less debt” or was there more to it? Perhaps you need to consider why you are willing to take a posters words entirely out of context, just to make a point.

Sain. Did my post just say “Less assets - less debts” or was there more to it? Perhaps you need to consider why you are willing to take a posters words entirely out of context, just to make a point.

Sain - I don’t worry much at all. I am always aware I could be wrong - which is why the risk is spread across a portfolio of positions. Commentators such as yourself never get things wrong - but then again, nobody has ever trusted you enough to make a decision. Atb

Sain - you stated that I had failed to consider that rental income will have fallen. You now concede that I did consider it. I couldn’t care tuppence whether you think a 30% cut to 2019 income is right or not in a post CV world - it requires ability and judgment. You are more of a commentator and should stick to that :)

Re restructuring. Not a great surprise to me. Less assets, less debt. The net result for holders entirely depends on the quantum between these two items across the whole asset base. Not all of the debt is covenant heavy, and it isn’t clear how easy it will be to enforce covenants in the current environment.