Kennedy Wilson Share Discussion Threads

[mad foetus] 05/2/2016 09:00

I'm very surprised - we have results coming up at end of month and that should show some NAV appreciation: given the amount of debt the company has issued and the low rate of interest they pay, I expect to see a significant uplift and think this is currently trading at a significant discount to NAV, which given the size of the business, the 40p dividend, the quality of the assets and KW's record in realising value, is a bit odd. I expect this to be above £12 in a months time, but then I never thought we'd see 1120 again, let alone 1060.

[mick] 05/2/2016 08:09

Surprising to see the recent and continuing weakness in KWE - I wonder what's causing the drop.

[eeza] 24/1/2016 18:27

Tipped in the Sunday Times - but can't post the article because I don't have subscription.

[djderry] 06/11/2015 17:09

Added these to the portfolio over the last two months,as mentioned good track record in States,they seem not to be over paying for assets.I hope to use them to de-risk some of the portfolio,I wonder how they will fare when the market takes its next tumble!

[mad foetus] 06/11/2015 13:41

So, initially they will issue 300m EUR at 3.25%. Overall, borrowings will be around £500m at a blended rate of under 3%. As long as they don't end up buying at top price at the top of the cycle that should boost returns in a meaningful way. But I'd prefer to see more acquisitions in Europe than in London from now on, I suspect London is closer to a peak in the cycle.

[mad foetus] 06/11/2015 09:13

After the bell yesterday they released news of a £2bn note issuance programme. That gives enormous flexibility going forward and could give a major boost to returns. If, for example, they can arrange funding at a similar level to the 300m bond they got away earlier this year, we could look at say £1bn of funding at 3%. If our rental income is 6% and property grows by 5% p.a., that would produce an extra profit of c.£80m p.a. The published aim of the company was always to achieve 15% return per year: it looks like they meant what they said.

[rackers1] 05/11/2015 10:55

agree mad f.
very impressed with the running of this company. waiting to top up on a dip. if im lucky.

[mad foetus] 05/11/2015 10:48

Just thinking it through...the NAV of the assets was £2,218m in June and is now, as the result of acquisitions, £2,681. If the June assets manage an 8% increase in valuation over H2 then we could see an uplift to NAV of £180m in the next results. Or about £1.20 a share by my maths.

Also worth noting how low their leverage is: cost of borrowing is 2.8% and their rent yields in general double this. they really look an exceptionally well run outfit.

[mad foetus] 05/11/2015 08:49

So did I hpcg, but it looks like we are the only ones here! Revaluation comes twice yearly and I've seen in other places that Spain is perceived as picking up strongly and large out of town developments in the UK (not the same as KWE's assets but a point of comparison nonetheless) rose by over 6% in Q3 alone.

But as you say, dividend of 40p p.a., well covered and good returns generated. Doing what it said on the tin, and you can't ask for more.

I think this is a key comment when looking at returns and NAV:

"Year to date disposals now account for GBP95.7 million generating an average unlevered return on capital of 21.8% over a hold period of 13.5 months and are 8% ahead of June 2015 valuations. ".

[hpcg] 05/11/2015 07:33

Looks like churning the book is generating some pleasing returns. Dividend well covered too. I did add on that recent drop and would happily do so again.

[mad foetus] 13/10/2015 08:38

This is now trading at the mid-year NAV. Given the level of rents and the rate KWE is paying on its debt, plus the strength of the market and the track record of management, that is crazy. I've topped up this morning, and think the share price should be about £1 ahead of where it is. In the meantime, worth reflecting that the divi is going to be 40p pa imo, so something around 3.5%, which has to be attractive.

[hpcg] 06/8/2015 08:24

Very happy with that. The most important reading to me was the additional value they are generating from of the assets.

[mad foetus] 06/8/2015 07:43

Look a decent set of results, NAV up to over £11, dividend of 10p a quarter, EPS at over £1. Obviously not comparing like with like as last years report was for a new company not yet invested, but growth looks very positive. The target of 15% pa share price growth over the long term looks eminently achievable. A core holding for me.

[hpcg] 09/7/2015 15:47

Yes, but Euro weakness still a question. I'm not really in touch with the Dublin market to know what's going on there. I'm not fussed about NAV revisions after such a short period of time.

[mad foetus] 09/7/2015 14:37

I know we are not exactly comparing like for like, but Daejan's results showed a 10% uplift in property prices over the last year - wouldn't be surprised to see KWE reporting something similar. In fact, given the focus that KWE have on improving and adding value to property I would hope that this is trading at or below NAV at the moment, but a lot there depends on how aggressively the board wish to push the valuers.

[mad foetus] 26/6/2015 12:02

I think the last one was with the annual report, so something like 1021p at end of Dec 2014. However, that was the end of their first year of trading so a lot of those investments were recent and not yet worked on. I suspect the NAV calculation is very conservative as they generated £66m in rental income in 2014. I'm a little surprised the prospectus for the bond launch doesn't have (on a cursory glance) a more current NAV.

[skyship] 26/6/2015 11:52

Sp up on IC tip.

Anyone know what the last NAV declaration was here - can't see it in May's IMS - though only a quick scan///

[mad foetus] 25/6/2015 08:48

£300m bond issued at what is expected to end up being 3.45%. Looks good to me, I'd expect to hear an announcement about what they are doing with the money pretty quickly as they wouldn't be raising funds unless they had a acquisitions in the pipeline.

[mad foetus] 16/6/2015 08:52

Hmm, looks like its going down as fast as it went up! I wonder whether there will be another fund raise this year? The exposure to mainland Europe is still minimal and yet we have the expertise in place so it must be something that is being worked on.

[hpcg] 21/5/2015 10:59

We are only 10% up on the IPO price, 20% on the secondary, so recent buyers are not paying an extortionate premium to the committed cash, never mind the deals made thus far.

[mad foetus] 21/5/2015 10:12

There were 2 big trades reported late yesterday - one of £600k, the other £1.2m, both buys. Good to see support at this level.

[mad foetus] 05/5/2015 16:14

Agree, this looks very positive and I'm looking forward to the
IMS on Thursday.

[hpcg] 05/5/2015 12:07

Latest deal is exactly what I signed up for, buying out disinterested financial companies for well below replacement value and nominal loan value is a great way of taking on very cheap real estate to the books. As per the announcement presumably we just take the building directly from the administrator and cancel the loan.

[hpcg] 24/4/2015 16:25

With its US roots anything other than quarterly reporting would blow their minds I expect. Also quarterly dividend should be increased so difficult to do that without some kind of statement.

[mad foetus] 24/4/2015 16:12

Interesting that they will have an IMS on 7 May as the requirement to do so no longer applies. It will be good to hear of progress.