Fletcher King Share Discussion Threads

[deadly] 09/10/2014 15:08

Looks like a rare chance to top up.

[longinthetooth] 09/10/2014 11:49

Seems to be a few sellers around!!With a market capitalisation of £4.25million(@46p) and cash and property of £4million in the BS and a prospective yield of 6.25%(@48p) why would you be a seller at the present time? Or is there some adverse news out there we are not currently aware of.Perhaps the clairvoyants would enlighten us!!

[norbert colon] 19/9/2014 15:34

Rossco. No they didn't but they have been a shareholder for a number of years (10+?) and noted that they were happy and had never had any reason to 'interfere' with the way FLK are run which is a good sign given they hold 20% I would say the same reason as all of us (and any investor) i.e. a well run, quality company that pays a good dividend and lets you sleep at night.

[rossco] 19/9/2014 13:05

Norbert, Did the representative from District & Urban Group give any insight as to the reason for their holding in Fletcher King?
rossco

[profdoc] 18/9/2014 10:08

Norbert, thank you for your excellent summary. I would only add that the response to my request for clarity on the bonuses to directors was a little lacking in substance. I noted that over the past year that for every £2 of additional pre-bonus profit the directors got £1 and the shareholders got £1. I asked what the policy was and whether this 0ne-for-you-one-for-me pattern will continue. I did not get a direct answer. However, the answer I did get has some merit: the need to pay talented people well, otherwise they go and work for competitors, and in the recession years the directors were modest in their remuneration. But you have to wonder what happens if another £600,000 is added to pre-bonus profits (does the CEOs income then exceed £0.5m?? in a £4.8m MCap company). It'll be interesting to watch.
Now I have got that gripe out of the way, I think this is a very well managed company with exceptionally experienced executives. Their conservative, cautious approach to the BS and to the growth of the business is a product of having seen many cycles come and go. They can take on a lot more business while using the same staff. They seem to be very switched on to cost saving.
I went in concerned about the excessive use of cash in the business (thinking why not pay a special dividend of a couple of million), but, given their knowledge I'm happy to see it used for more SHIPS (fees and property returns to be received) and as a buffer against negative events. But I did put in a request for raising the dividend even more. Glen

[battlebus2] 17/9/2014 18:09

Thanks Norbert..

[rossco] 17/9/2014 17:50

Thanks for update Norbert.
I can remain a happy holder.

[ed 123] 17/9/2014 12:19

Many thanks, Nobert Colon. :-)

It looks relatively low risk and with a big yield.

One I can hold and forget about.

[red army] 17/9/2014 12:18

Thanks for that Norbert

The above reasoning is why I still hold and unfortunately I requested to attend the GM via email and still awaiting a reply. Typical response from generic email addresses.

Did anyone bring up the subject of the health of the commercial property market generally and if valuations are on the increase????

[norbert colon] 17/9/2014 11:53

AGM this morning was attended by me and 2 others (external to the BoD) one of which represented District & Urban group (major shareholder). We we warmly welcomed and it was noted that it was rare for external shareholders to attend (we all forgot to say next time make it 10am!)

Summary points below which are my own notes and hence any errors are entirely mine.

- Discussions about amount of cash held on books and what the BoD planned to do with it. In summary nothing planned. Conservative company and some held as buffer (they like to have 9 months cash 'reserve') and some as potential seed capital for further SHIPS.

- BoD questioned over bonusues (high for year reported). Dave Fletcher noted that his salary had pretty much been unchanged for 10 years + and that bonueses this late year reflected the strong performance of the company. Dave Stewart (NED) noted he was comfortable with staff remuneration generally. In line with market rates.

- Dave Stewart noted he was also very confortable with the BoDs management of cash and overheads etc. Conservative.

- 75% of their income from South UK rather than provinces / regions. They have extensive coverage of the UK (almost 'every town in the UK') and hence firmly have their finger on the pulse of the UK market allowing them to move quickly and adapt to changing market conditions or even be ahead of the curve,

- AIM listing (only 5m mcap) only costs them around 35k / year so not seen as a big cost centre. I was surprised how low cost this is.

- They are looking to potentially move 'over the road' to smaller offices as they have more space than they need. This will be a cost saving. Currently they rent some desks in their office for circa 30k/year. Current lease has 2.5 years left to run but they may opt out early and pay the landlord off.

- Their SHIPS investors are quite risk averse and FLK have strict criteria for offices (only offices...) they buy i.e. good location / sub par quality (with scope to make prime) and decent entrance lobby / vertical transportation etc. They invest in their own SHIPS as FLK and with personal money. No corporate money.

- No planned significant increases in headcount

- They can make money in propery broking whether market going up or down - stale market is the killer. They noted that London is still the place to operate as margins much better than regions. They have no plans to move into resi market and were aware of london resi market recent declines. Future SHIPS likely to be londos based.

- Dave Fletcher noted that the Co has always paid a divident even through recessions.

Personally I was very happy with what I heard and intend to remain a shareholder unless circumstances change. Current PE of <9, Yield of 5.7%, Price / tang book of 1.3, ROCE 14%, 3m of cash, no debt. Overall a very modest valuation with potential upside. I wish more companies were like this.

[rossco] 16/9/2014 22:42

It would appreciated if someone who attends the AGM could give an update.

[davidosh] 04/9/2014 09:44

I will almost certainly be there. Just returned from holiday and not impressed by the totally shareholder unfriendly time of 9am....and they wonder why nobody goes to the Agm !?
I will ask if they can do a presentation as we are going to great lengths to join them and for once it looks like they are going to have a decent turn out.

[profdoc] 04/9/2014 09:33

Hi Norbert Colon, I plan to be there - 9am is not very investor friendly though! We're not all Londoners!

[norbert colon] 03/9/2014 11:22

AGM confirmed for 9am on 17th Sep @ their London HQ (Conduit St). I plan to attend and hope to see others there too - Davidosh etc

[battlebus2] 27/8/2014 22:06

Nice timing melody,and good to see we only came off 0.5p with x
divi.

[melody9999] 27/8/2014 21:46

happy to join you guys here. just sneaked in before the divi.

[battlebus2] 21/8/2014 22:04

Yep 2.25p next week hence those buying in before.

[rossco] 21/8/2014 21:56

Shares go ex div next week on the 27th.

[battlebus2] 21/8/2014 19:05

Yes very good to see these continue to rise, i've held these at much higher in the past so like you say room for further rises.

[deadly] 21/8/2014 16:23

No dip on going XD plus a good rise today. Looking good from here.

[battlebus2] 29/7/2014 22:26

Just catching up with events and pleased to see those great results and the dividend increase.

[red army] 22/7/2014 11:28

My sentiments exactly and would not be surprised to see these results bettered.

A nice little business to buy at this price.

[red army] 15/7/2014 11:46

Signs of a little selling so hopeful of topping up.

[bisiboy] 15/7/2014 09:04

not selling mine