Fletcher King Share Discussion Threads

[profdoc] 29/7/2015 02:49

Thanks to all. Looking forward to a lively AGM.
It will be interesting to see if FK Board intend to liquidate SHIPS within the next 18-24 months - after that we really would be playing with fire in London.
Also at the AGM we need to raise (1) Succession planning for Board directors - younger and cheaper leaders would suit me.
(2) Just how is the bonus policy for Directors worked out? Is it meant to be stretching?
(3)Why hold so much cash?
(4) Is dividend policy to pay out around 50% of profits? or is there a more rational logic than that?
The 20% shareholder could rally us smaller shareholders into using our powers. For a start I will be voting against the remuneration report. If the directors continue to treat shareholders with contempt (e.g. ignore request for later AGM start time) I will consider voting against their re-election next year. If others join me we could send a message.
(If major shareholders would like to meet sometime, I could arrange it - it will not be a concert party as we would not be obliged to act as one, but it would be a discussion group of concerned investors, and we could make our voice heard).

[horndean eagle] 28/7/2015 18:24

You can see what assets they have in the SHIPS funds if your google online. The first one has let above forecasts so should turn a decent profit. The second one is much earlier stage. Rental growth in London is very strong and vacancy very low. Pre-lets are in on more buildings under construction so dynamic unlikely to change imminently.

[longinthetooth] 28/7/2015 12:02

Much less concerned about asset values in the provinces although not altogether sure that is where the SHIPS money is going.Worthwhile asking the question at the AGM.On all known evidence there has got to be significant downside risk(and limited upside) in the Capital.

[norbert colon] 28/7/2015 10:59

Hi Glen / longinthetooth. Interesting debate thanks. With respect to their SHIPS, I have to confess I have never really studied them in detail and hence you know more than me but your logic seems sound.

With respect to London property Glen I concur with your thinking and don't see residential and commercial in the same light although they are not completely different.

I attended a meeting with the CEO of a well known and respected property consulting firm a few weeks back and his view of the commercial market was that London was nearing the top of the cycle (they are consciously moving more into the retail sector which is only just starting an upswing) and that outside London was still half way up the curve, so going back to the point raised I think caution is needed but it will be interesting to hear at the AGM how FLK see things, as by default they are very close to this market (too close..?) and hence should have a good feel for the cycle (and risks).

[profdoc] 28/7/2015 02:51

Longinthetooth:
Are you pessimistic about commercial property in London? I'm very pessimistic about top end residential - much of the buying interest is overseas gamblers (I'm currently in Malaysia, where some wiseheads were telling me that they worry about the London market from a Malaysia equity investor perspective because of the exposure of their corporates and speculative families - you might have guessed I'm not in the market for a £1m 2-bed flat in the Battersea area - nor are the smart Malaysians. Some others are trying to dump their right to buy bought with a 10% deposit).
But residential property in the rest of the country (I live in Leicestershire), and (of more relevance to FK),commercial property in London and more especially outside of London is somewhat different. Won't this continue to be driven by economic fundamentals? London is THE global city. Won't economic recovery, not just in the UK, but in Europe and America as well, will continue the commercial trend for a while yet. The growth in Asia is phenomenal - I was blown away at what is happening in Thailand, Singapore and Malaysia.
Commercial property is cyclical, but are we really at the top of the cycle/ What do other people think?
Glen

[longinthetooth] 27/7/2015 09:51

SHIPS are a good generator of management fees no doubt and the potential for capital gains exists.Major concern must be investing at near the top of the market where gains could be replaced by losses!FK have made write offs in the past.You have to ask yourself does a bubble exist in the London property market(commercial as well as residential).The property market in China experienced a major correction with many investors now turning their attention to London which has served to increase prices further still.The party will not go on forever!Unless trading improves the interim dividend looks like being .75p so prospective yield much less than mooted.

[profdoc] 27/7/2015 06:31

It seems to me that a crucial factor in the assessing the prospects for this firm lie in its SHIPS - it now has two in operation SHIPS 14 and SHIPS15. This should result in a two fold benefit (1) additional fees of the order of £200,000 - £300,000 per SHIP (2) capital gain on the sale of the SHIP property (e.g. SHIPS 06 and SHIPS11 combined made a realised capital gain of £174,000 boosting 2014's results. This was on a £500,000 total investment by FK). The latest batch of SHIPS have taken £875,000 of FK's cash to coinvest with outsiders (they oversubscribed because they saw returns of 11% pa and 20% pa in the past on SHIPS06 and SHIPS11) to purchase one property at £9 and another at £8m. That will mean a nice income boost. And, maybe, a capital gain on the amount invested. That is about all I know about the SHIPS. Can anyone help? Does anyone have any information beyond that which is presented by Mr Fletcher?

[longinthetooth] 24/7/2015 09:07

A couple of modest sales yesterday at below the bid price sufficient to drag the shares lower still highlights the liquidity risk which should not be ignored.Acquiring commercial property in London at current levels and with increased funding costs likely seems to me an accident waiting to happen!I do not consider that the yield in any way compensates for the risk involved here.In the absence of a trading update prior to the interims(unlikely)the share price seems likely to tread water at best until then.

[norbert colon] 23/7/2015 15:19

Just to confirm AGM is on 16th Sep at 9am.

This fall is starting to look rather overdone and similar to the spike down in October last year. The yield at the current share price is in excess of 5% and whilst there are some concerns as with any micro-cap, the risk / reward is now looking favourable for patient money. Any drop to 40p or below is a buying opportunity in my opinion.

[longinthetooth] 17/7/2015 12:28

AGM has been 9am for as long as I can remember and shows scant regard for shareholders wishing to attend especially those outside the south east.Anyone with a meaningful shareholding and a particular axe to grind are best advised to arrange to meet with DF in order to air their views as from my experience you never get too far at an AGM!A few loose sellers on very low volumes has driven the price even lower illustrating the point I have previously made with regard to the poor liquidity in this stock.Price could test the 40p level in the short/medium term in the absence of any upturn in trading.

[davidosh] 17/7/2015 10:54

It is certainly in my diary. I have advised the company that 9am is not shareholder friendly and I suggest others complain too.

[norbert colon] 17/7/2015 08:24

David - useful thanks. I will be attending the AGM (even at early hour...) hope to see you there.

[davidosh] 16/7/2015 21:34

Fletcher King are mentioned in this radio show...

[commander t] 16/7/2015 19:31

Don't hold, or intend to but, it was interesting to read the posts from 339. Since late 2007 the market bumped along the bottom for at least 5 years (looking at a long term chart) - until some light at the end of the tunnel could be seen in 2014.

[bisiboy] 15/7/2015 18:37

my thoughts for what they are worth

although it was flagged that last years rise in profits was unlikely to be repeated.the rise in dividend which was still well covered gave the impression this was the new norm.
it would perhaps have been better from a market signaling perspective to have
simply declared a special dividend last year thus making intentions clear.

[churchill2] 14/7/2015 15:56

I warned investors in 2007 that the only winner was David Fletcher see my post 339.

The share price was just below 100p then.

[longinthetooth] 14/7/2015 12:27

If they can not make hay whilst the sun shines they will encounter serious problems as and when there is a down turn in the Capital with their high fixed cost base.The liquidity problems with this stock making it extremely difficult to sell at anything near the bid price in any volume lead me to the conclusion that it is best to look elsewhere to avoid sleepless nights.Added to which the board are always quick to award themselves a bonus in the good years but never take a cut in salary in the bad ones.The erratic performance of the SHIPS vehicles is also a concern with one such investment written down to zero as I recall.This is a private fiefdom masquerading as a publicly quoted company.

[norbert colon] 14/7/2015 12:00

I must admit I agree although have not had time yet to read fully the results. I would really have hoped that they would be making hay whilst the sun shines - I was certainly not expecting such a relatively poor set of results. Hopefully a few more of us will be at the AGM this year.

[deadly] 27/2/2015 09:16

Recovering again after those unjustified scares. Good prospects and cheap.
Glad I bought more.

[horndean eagle] 09/2/2015 17:57

Reports over weekend hedge funds shorting UK property. A bit of a spill over from those headlines I reckon.

[deadly] 09/2/2015 09:28

sharply down today. Any news?

[plasybryn] 15/1/2015 10:16

Ex dividend 22nd Jan

[melody9999] 24/12/2014 09:29

Well - managed to sell mine at 61.5p this morning (reported as a buy) - not sure what the jump is all about but happy to take some profits and look for a re-entry point.