REMINDER: Our user survey closes on Friday, please submit your responses here.
(ShareCast News) - Income-focussed UK real estate investment trust Redefine International submitted a proposal to International Hotel Properties Limited (IHL) to increase its shareholding to 50% from a the current 17.24%, it confirmed on Wednesday. The FTSE 250 company said it intended to increase its current shareholding in the Luxembourg and Johannesburg-listed firm by acquiring 18343.166 IHL shares from minority shareholders, by way of a scheme of arrangement. Consideration for the IHL shares would be made though the issue of 2.5 Redefine shares for every IHL share held, for which an additional 45,857,915 new Redefine shares would be allotted, the board confirmed. Following completion, hotels would comprise around 19% of the company's gross assets, up from 16% as at the end of February, with "material savings" expected to be generated through the integration of the hotel assets into the company's existing hotel portfolio and REIT status. "This is an opportunistic acquisition which increases the Company's ownership in a high-quality and high yielding hotel portfolio to 50% and increases our exposure to the strong UK hotel market, whilst increasing our exposure to RPI-linked leases," said Redefine CEO Mike Watters. The IHL portfolio comprises nine good quality UK hotels valued at £104.35m, which Redefine said complemented its standing hotels portfolio. Four of the hotels, comprising 27.7% of the portfolio, are let on long term leases to Travelodge with an effective average unexpired lease term of over 20 years. The Travelodge portfolio reflected a net initial yield of 5.3%, and benefitted from five yearly RPI escalations providing attractive rental growth prospects in a higher inflationary environment, Redefine reported. The remaining five hotels, valued at £75.4m, would be managed by the company's associate RedefineBDL Hotel Group. Four of the hotels are franchised to Holiday Inn Express and one to Hampton by Hilton. Redefine said the five hotels to be managed by RedefineBDL had a "strong" trading record, and provided exposure to the Hampton by Hilton at Gatwick Airport which is integrally linked to the airport terminal building and the Holiday Inn Express, Edinburgh which had reportedly shown strong growth since acquisition. The five franchised hotels are anticipated to deliver an effective net initial yield of over 7.5%, and the portfolio was currently financed at 50.0% loan to value at an all-in cost of debt of 3.32%.
Well you right about 2 things. The South Africans love their share Yield and the share is a good hedge against a volatile Rand. Two of my reasons for buying were the Yield and hedge against hard Brexit.
One of the reasons the share price is not going to hit 30p soon is best explained by the article in the telegraph this weekend. "Miners brace for unveiling of strict new charter in South Africa South Africa’s Chamber of Mines has threatened legal action against the government over the new mining charter A shake-up to the mining code in South Africa could have a far-reaching impact on miners listed in the UK, amid fears the government there will try to impose onerous new requirements around company ownership. A new version of the mining charter is expected to propose raising the mandatory black ownership of mining assets from 26pc to 30pc under the government’s Black Economic Empowerment (BEE) initiative. But the mining industry is particularly worried about a second proposal, which would require miners to maintain 30pc black ownership even when the original BEE holders have sold their stake. Under the original charter, mandated in 2004, miners only need “empower” their assets once. South Africa’s Chamber of Mines has threatened legal action against the government if it imposes the new conditions, which it says will deter much-needed foreign investment and have been drafted with little consultation from the industry. The new charter - which is months overdue and has been the subject of disagreement within the ruling ANC party - was approved by the cabinet in draft last week and is expected to be made public in a matter of weeks. Mining contributed SAR286bn (£17bn) to the South African economy, or 7.1pc of its GDP, in 2015. London-listed companies Anglo American, Lonmin, Glencore and Petra all operate in South Africa. Anglo boss Mark Cutifani has called on the government to ensure that the charter encourages investment. Earlier this year he told The Telegraph that investors would feel that promises had been broken if the government changed the BEE threshold. A spokesman for Anglo said the company was waiting to see “whether industry submissions have been considered”. “Anglo American is and remains committed to meeting South Africa’s transformation objectives and has been a longstanding and major contributor to transformation,” he added. “These proposed changes will send a shudder down the backs of investors,” said Kieron Hodgson, analyst at Panmure Gordon. Hunter Hilcoat, analyst at Investec, added: “We should be alarmed, not only by the BEE threshold increases but by several potential aspects, including the re-empowerment requirements.”"
Depending on how much you want to invest, do the smart thing and drip feed into the market. For example you want to invest £10,000 in SSE. Buy £1000 worth of shares every month to mitigate any short term price volatility.
"Yarisportland,Shorting shares is the same as going long a share!! What is the difference?? Your betting the price goes up or down!! Are you a vicars or iman's son and betting is blasphemous,??or are you just deluded.?? Or both.!!" Shorting is a "zero sum game"; your living off the misery of others; hoping others will spill coffee on their white shirt so you can have a chuckle!
Sure short traders can make a lot of money. But to do so repeatedly is almost impossible. Odds are stacked against short traders. Short term trading is akin to gambling.
"As a long-term investor, you shouldn't panic when your investments experience short-term movements. When tracking the activities of your investments, you should look at the big picture. Remember to be confident in the quality of your investments rather than nervous about the inevitable volatility of the short term." "As a short term investor you deserve to be burnt"
Debenhams' new chief executive Sergio Bucher unveiled his strategic vision for growing the department store group, centred around making the stores a more enjoyable destination for 'social shopping' and driving efficiency through 'simplifying and focusing' the business. Consultation is beginning on the closure of one central distribution centre and around 10 smaller regional warehousing facilities, while up to 10 UK stores out of 176 will be reviewed for closure over the next five years.... Based on the Capital Markets Day review presented on 06.02.2017 Debenhams has 2 units with RDI and represents 1.6% of gross rental income as of 06.02.2017. News like this will have a dampening effect on the share price.
I hope this helps: "Distribution policy and outlook As announced in October 2016, the Company will be moving to an industry standard EPRA-based earnings metric. Adopting this earnings measure, adjusted only for necessary Company specific adjustments, allows for a closer alignment between earnings and operating cashflow. To facilitate our leverage objectives and to provide greater financial flexibility, a medium-term dividend pay-out ratio within the range of 90% - 95% of our rebased earnings measure will be targeted. In the short term, some degree of flexibility in the pay-out ratio may be required to smooth distributions to shareholders following the transition to the EPRA-based earnings metric. A full presentation will be delivered to investors and analysts today and will be made available on the Company's website. Shareholders should note the earnings per share guidance of 2.70 to 2.80 pence per share for the financial year ended 31 August 2017 is subject to suitable re-investment opportunities being secured. Growth in earnings per share is targeted to be 3.0% - 5.0% per annum over the medium term, subject to ongoing favourable market conditions."
From Motley Fool, http://www.fool.co.uk/investing/2017/03/02/2-dividend-stocks-id-buy-before-its-too-late/ "Real estate investment trust (REIT) Redefine International (LSE: RDI) may be seen as a relatively risky buy at the present time. After all, it is focused on UK property, which could experience a difficult period thanks to Brexit. While in previous years, a growing economy, improving consumer confidence and foreign investment have caused the UK property sector to perform relatively well, that could all change. Despite this, investing in Redefine could be a sound move. It has a price-to-book (P/B) ratio of 0.9, which indicates there is a wide margin of safety on offer. As such, even if its profitability comes under pressure, its shares may not fall significantly. It also yields 8.2%, which is among the highest yields in the FTSE 350. Certainly, dividends are covered just 1.1 times by profit. But, with profit due to rise by 24% this year and by a further 5% next year, Redefine’s outlook may be more positive than that which is currently being priced-in by the market. Given inflation is set to reach 3% this year, the company could be one of the very few opportunities for investors to earn a real-terms yield of over 5% this year. Therefore, now could be the perfect time to buy it."
Agree, the fundamentals have not changed as long as we stay in a low interest environment.
The recent share price fall unjustified. All the risks already discounted in share price. Effects of brexit on UK portfolio well balanced by German portfolio. Occupancy rates: UK retail: 99%, UK commercial 95% and Europe 99%. Average lease length over 7 years. The cash flow will continue Forward yield is 8.14% for 2017 No brainer for those looking for income.
Good week for RDI. Steadily moving back up into the mid 40's pence from where it fell due to MM mischief. Quality stock with great dividend in this era of near zero interest rate. SP should be a lot higher. Lets see what the next few weeks and months bring.
Solid company with a great dividend. Not a day trading share. The share price has held steady around the plus 40p mark for some time. Recent events have given the market makers opportunity for mischief. If you are holding these for income long term then your in the right place. The income I received from RDI dividend in 2015 alone was enough to pay my annual council tax, gas and electric bill in 2015. If they can repeat this year in year out then I do not mind the share price fluctuation in the current range.