|Bourne End Prop
||EPS - Basic
||Market Cap (m)
Bourne End Prop Share Discussion Threads
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|Did anyone else benefit from a punt on BEP? I posted on the 12th May that Helical Bar had just taken a 12% stake in the company. They have just offloaded 1.5mn shares at 64p. A nice little earner for a shrewd company with a nose for good value.
Anyone buying on the 12th May would have realised a fairly safe profit of 28% based on the mid price. I bought @ 44p & gained just under 45% profit in just over a month.
Property may well be a depressed sector but it is still worthwhile targetting well managed small companies which trade at very high discounts to NAV.|
I agree with your view on interest rates. This is all the better for companies like BEP which have got rid of their long term expensive debt.
You may well be correct in your assertion that property will continue to be a depressed sector. However, out of favour sectors often produce some good bargains with BEP being a good example. Generally speaking the 'trend is your friend' but in todays uncertain market I am happy to pick up the odd value share. Not necessarily to keep it for long. BEP has already increased by 20% in 3 weeks. Not bad when many 'more exciting shares' have reduced by that amount in less time!
I think there will be more consolidation/takeovers among the smaller players. The stake by Helical Bar is quite interesting.|
A number of companies are already doing this and charging high rents for the privilege(e.g Regus).Property industry will adapt if there is enough demand and enough lucre in it.
Demand from e retailers is already showing up in demand for strategically placed warehouses.Prepared to pay high rents for the top located property.
See no excess demand yet although high street retailers may catch a cold.Out of town retailers will move to more leisure related areas to encourage the one stop visit.
I still see life in the old dogs yet
Long term, interest rates in UK are predicted to go down, not up, to bring us in line with Europe
Also the increasing white collar productivity and tendancy to nil transaction costs (bought about by the internet) is causing deflationary pressures, which again spell falling interest rates.
Property will continue to be a depressed sector, until the commercial property companies forget the notion of long term leases with upward rent reviews, and start offering their commercial customers short term, fully flexible leases, along with highly serviced hotel style office space
If remote, location free working takes off, then their will be huge overcapacity in this sector....Morse|
Many thanks for your reply to a query I raised 8 months ago. I know that only a few of us our interested in property companies & last year clearly peoples minds were on other sectors.
Ironically the newly posted NAV takes FRS13 into account because of the disposal of the high coupon debt.
Unfortunately very few posters on this BB (& even on E-Trade) have much interest in propert companies. Witness the lack of interest on the City North Group the other week. Thanks for your reply. It saves me talking to myself...|
|Most analysts seem to ignore FRS13 and most of the public quoted property companies put the effect in a note to the accounts.It mostly affects acquisitions or disposal of the whole company if the debt cannot be rescheduled.
Most property companies ignore it for practical purposes as they argue that it is not their intention to repay the debt before it is due and the debt was used to fund purchases with a lot higher return than currently available.
I now have 30% of my portfolio in the property sector as it gives a high dividend yield and backed by assets which are discounted between 25-50%.Also one or two consolidations ( I am currently waiting for Dencora at 300+ having bought at 185p) are starting to happen
IMHO good value in the sector as no indication that market rents are coming down.
|Interesting situation developing with this company. Helical Bar has just taken a 12.05% stake in the company. Not surprising really when you consider the huge discount to NAV. Brokers expect NAV to be 99p a share by the year end.
BEP has been transformed in recent months with the disposal of the high coupon debt. At the time this promoted the shares to rally to 64p. Directors have been consistent buyers for several months.
The current share price has been depressed because of the general dislike of property companies and those specialising in retail property in particular. In recent weeks I have detected a slight improvement with, for example, LAS off its lows.
Boring maybe but I have been quite happy to tuck a few away as a medium term punt. I have made good money (is there any other kind?) from a medium term trade of this share. I reckon the relatively new management have made some good moves & at least they have backed their judgement by their own money.|
|There must be some accounting experts out there or just someone with an interest in property shares - not necessarily Bourne End Properties. This wekend was very quiet and so I'm just bringing this to the top in the hope that someone can make a contribution.|
|I am seeking the help of some of our accounting experts. In particular the effect on the valuation of property companies as a result of the relatively new Financial Reporting Standards. It seems to have taken quite a long time for the smaller companies to have adopted these standards and it is still quite common for companies to quote NAV's which have not been adjusted to FRS 13. In other words the NAV is stated without reference to the fact that debt may be at a higher rate of interest than prevailing rates.
It is easy to see the reluctance of some companies to adopt the 'new' standard. In most cases it results in significantly lower NAV. Take the case of Bourne End Properties which has a stated NAV of 88.2p per share compared with 61.8p adjusted by FRS 13 standards.
However, I personally feel that FRS 13, while relevant, grossly distorts the value of property companies - particularly in times of low interest. Currently we are experiencing very low rates of interest which is generally considered as good news for propery investment companies. The common view suggests that from this point interest rates are likely to go up. Suppose that two years from now rates go up by one to one and half %. How will this effect the NAV of property companies? Logic tells me (I'm probably wrong) that FRS 13 valuations will rise closer to the current NAV. If this happens then some property companies will start to look really good value.
And all this will take place with no action by the individual companies. Is this argument flawed?|
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