Matrix European Real Estate Share Discussion Threads

[sand dollar] 03/6/2011 10:34

It will be very interesting to see how they manage the disposals, it would appear that they intend to distribute the proceeds to the shareholders as and when properties are sold rather than just build up a cash pile. How they manage this is crucial to shareholder value.

[kramch] 03/6/2011 10:21

Q E D.

should be worth £3 +

K.

[nigelwestm] 03/6/2011 10:20

This share has always been about patience. Just load up, sit back and relax...

[kimboy2] 03/6/2011 10:15

Last year MERE earned net rent of £31.5m

If you knock off admin of £4.9m and finance of £16.7m you are left with £9.9m.

Total number of shares is 36m so underlying earnings of 27.5p.

At 180 a p/e of 6.5.

[kramch] 03/6/2011 09:14

Remember MERE receives a lot of rent (I estimated it to be on a "cash p\e" of 6 or 7, now c. 10 after yesterday's share price rise) so this will help offset the disposal costs.

If they can finalise a deal with IBM on Nice, that should be saleable. But, yes, our limping elephant in Frankfurt may be a problem. K.

[skyship] 03/6/2011 09:09

Zangdook - Yes, the result of the TEIF Business Review to which I referred yesterday was in rather timely fashion revealed today:



This is the important para:

"The Investment Manager believes there are significant opportunities for investment in Western European markets. However, both the Board and the Investment Manager are conscious of the significant discount to Net Asset Value ("NAV") to which the Company's shares currently trade. Therefore the Board will only sanction investments in such opportunities where the Investment Manager can demonstrate that the return that can be generated from the investment could reasonably be expected to provide better short to medium term value than the Company returning the capital to shareholders at NAV less costs or by way of dividend."

I've topped up with a few more this morning.

# Small divi to pay our way whilst we wait
# At 47p the NAV discount to the "average" NAV of 71.6p = 34.3%
# Assets in Euroland provide some hedge to the weak £

(average refers to the average between the gross NAV and the net exc. defd tax)

Not a great deal of upside perhaps, but to achieve that net figure of 71.6p would be the equivalent of 15%pa over 3yrs. More than enough to justify entry at this level. Then of course there is the considerable chance of Laxey-inspired earlier action!

Here again is the recent IMS for the asset stats:

[zangdook] 03/6/2011 07:31

Thanks for the mention of TEIF yesterday - looks like it was just in time.

[nigelwestm] 03/6/2011 07:12

Yeah. Good point, Mathisvale. 240/250p is hardly worth hanging on for. I think I'll sell all my shares today. Thanks for your input.

[mathisvale] 03/6/2011 06:17

Are we all sure that MERE can get the full asset value for all of its properties when it tries to unload them on the market. What about the problem ones (like Frankfurt) where MERE was having trouble getting tennants.

Also what about all the dealing costs of selling the properties and payofff costs for MERE's employees. Perhaps 240p - 250p per share is more realistic than the quoted 279p when all the costs are considered

[scburbs] 02/6/2011 21:25

YdderF,

I would rather have a combination of TRV's property with TEIF's gearing. The level of gearing together with the refinancing risk mean TRV is a much more speculative play than TEIF.

However, if you are going to be a speculative play best be in Germany! A notch or two above MERE and TEIF on the risk scale though.

[sand dollar] 02/6/2011 20:05

Cheers Tim, and thanks for your insights in the past, I still have a story to tell about my Matrix holding, but I am still waiting for a few lose ends to be tied up before I can tell all.

[tim000] 02/6/2011 16:15

congratulations to all who held on to their shares for the past year. They deserve to be rewarded. I think the management are doing the right thing here, market conditions are not favourable to an activist investment strategy.

[ydderf] 02/6/2011 14:36

TRV is the best of the remaining bunch imho - better metrics than TEIF but let the annual reports argue it out...

[skyship] 02/6/2011 14:13

For those who don't know of TEIF - a bit more to assist your research:

TEIF is managed & 20% owned by UK entrepreneur and seriously rich Joe Lewis. Recently Laxey arrived on the scene by acquiring 29.9%. An outright sale or a voluntary liquidation a la MERE looks to be a highly likely outcome to their Strategic Review.

Plenty to play for if you read this latest missive:

[kramch] 02/6/2011 14:00

Well done MERE, this company has always put shareholders first.
IERE, I have always felt was run for the benefit of the banks, expensive restructure and expensive debt. They need to follow suite, they could sell their properties more easily than MERE, not having the Frankfurt and Nice millstones.
K

[mdchand] 02/6/2011 13:56

Amazing - to think these were circa 5p at one point! Good luck to all those who bought then and commiserations who bought when it originally listed.

[skyship] 02/6/2011 13:51

Specuvestor - well done you.

As to your question, well TEIF are already starting to move ahead today - possibly reflecting the news here. They too are undertaking a strategic review, perhaps as a result of Laxey taking a 29.9% stake. Look to be a good BUY...

[zangdook] 02/6/2011 13:30

SKYSHIP

I see this as another HPEQ

MCAU is another, though not as good. Better than the building society, though, and already started paying. Does anyone know any other funds winding down?

[nigelwestm] 02/6/2011 12:38

Hmmm... backwardation: 185p/184p. Market beginning to wake up to what's on offer here.

[specuvestor] 02/6/2011 12:16

NigelWestM

No, not switching now but planning ahead for building a stake in other euro or global property companies with similar characteristics. I have enough UK exposure.

[nigelwestm] 02/6/2011 12:06

Seriously, though, geng, do you think we'll get to around 279p at some point? Or will we get taken out at a lower price and what price do you think is reasonable to expect?

Spec: You switching already?

[specuvestor] 02/6/2011 12:06

Result!!!

Thanks to Skyship et al who have provided excellent coverage of property stocks these last few years. Bought a whole tranche under 90p and kept buying under a pound. Just goes to show that sometimes a share price is NOT too good to be true. I was guided by the massive discount to NAV.
Will eventually have to find a home for these ISA funds which I originaly switched from Invista European & AXA property. Where do I switch back to retain european exposure and high divi? Have had a small punt on Invesco European @2p but need to replace matrix dividend. What are you guys switching to?

[geng] 02/6/2011 12:03

Sorry Nigel but we just got 3 years dividends and more to come in 1 Day!

[nigelwestm] 02/6/2011 11:29

I managed to snap up at few for less than 160p today but I was hoping that MERE would just carry on ticking along and paying out the dividend. I like stocks that you don't have to pay much attention to and they just sit there earning you money. Ah well!