||EPS - Basic
||Market Cap (m)
|Real Estate Investment & Services
Real-Time news about Rugby Est. (London Stock Exchange): 0 recent articles
|scburbs: I'm out for the moment. This has done its job in terms of very low risk double digit IRR when my other alternative for those funds was cash.
With more risky property stocks back in favour (other than in the last few days) I have moved up the risk spectrum and am converting these funds back to cash to protect those positions.
There should still be a good double digit IRR here so I may be back later. They need disposal news and a new fund to get the share price moving.|
|scburbs: Rugby Estates is currently at 230p and had NAV of 354p at 31 January 2009. This represents a discount to NAV of 35%. Whether this discount is high or low, of course, depends on the quality of the NAV.
The breakdown is:
Cash 64p per share
Property £2.62 per share
Investments in property companies 22p per share
Other sundry net assets 6p per share
The company has no debt and has management contracts with no value ascribed to them on the balance sheet. This is the area the company intends to focus on in the new future.
"At 31 January 2009, our three co-investment funds held approximately £380 million of property assets. Our target over the next few years is to achieve £1 billion of assets under management. This will be achieved primarily through the establishment of new co-investment vehicles."
The company intends to return 50p (£8.4m) to shareholders. After this return (assuming a straightforward return of capital), NAV will become 304p and and the share price 180p. This increases the discount to 41%. If a tender offer were used (at a discount to NAV) then the discount may widen further.
Given this company has no gearing it looks good value at 230p. This looks like one of the safest plays around. Whilst it is not going to double (unless it achieves its aim of £1bn which seems difficult at the moment) I would expect strong returns over the next couple of years. This looks like a great investment for a low risk play set to generate solid returns. These returns are much greater than cash in the bank.
The main risks are the continuing fall in property prices and the loss of management contracts due to covenant issues in the management vehicles. A fall in direct owned property prices of 10% reduces NAV by 7% before the cash return and 8.5% after the cash return. When the impact of indirect investments is included this probably increase to around 8-9% and 10% respectively.
This means property has to fall another 30-40% before NAV is reached. If prices do fall by this amount then RES will still be entirely solvent (most other UK property companies would be largely bankrupt in this scenario!). The worst impact would be that it may lose management contracts and its 22p investment may fall to nil.
Given this meltdown scenario only takes RES back to the value of its assets this means the downside protection is rock solid.
The main concern for me in this investment is what is going to happen to the management contracts and what is the underlying cost base.
In the year to 31 January 2009 the management contracts generated £4.2m of income. Rugby had a cost base of around £6.2m. This was not allocated between the £4.2m of management income and the £3.9m of rental income. However, the implied recurring profit of around £1.9m is not hugely impressive.
In the current year, management income is set to fall by around £1m (mainly due to a contract renegotiation with O Twelve). However, against this, action is being taken on the cost base.
"The adverse market conditions, the very low level of transactional activity, which is expected to continue for at least the next year, and the decision to wind down Rugby Capital's directly-owned portfolio have necessitated a thorough review of overheads and staffing levels. As a consequence, in the last few months of the year a redundancy programme was implemented with the result that the total number of employees, including executive directors, has been reduced from 21 to 13. The office space occupied by the Group's staff at Farm Street has been reduced accordingly and is being sublet. With effect from 1 April 2009, the Executive Chairman, Chief Executive and Finance Director have agreed to reductions in their basic salaries of 20%, 20% and 13% respectively."
About 80% of the administrative expenses are salary costs. These actions should enable the cost base to be nearly halved to say £3.5m. This would leave around £3.5m of recurring profit or around a 9% yield on current market price. The main danger is that the Directors run the company in order to overpay themselves and this will reduce the recurring yield. They do appear to have a shareholder base that should help reduce this risk.
With a prospective earnings yield comfortably above current interest rates, significant downside protection and an intention to return 50p capital and further capital over the next few years these look good value to me. I would expect a comfortable double digit IRR over the next few years from 230p.|
|topvest: Blimey - Trefick have nearly 30% - that's a surprise. They obviously see this as a value play. Surprised the share price hasn't responded today.|
|gco1133a: Solid enough, but property is hardly flavour of the month. Look at BLND et al share price ytd|
|byrdsong: I'm in at the mo. This has been one of my favourites for a while. The share price isn't sleepy and that's the imp thing!|
|linhur: Looks as though the share price is well up with events.Might be a time to topslice.
2003 was a time for consolidation.|
|aderemi: Rugby Estates Plc ("Rugby" / "Group"/ "Company"), the property and asset
management group, focussed on London and the Western Quadrant, today announces
results for the year ended 31 January 2004.
* Pre-tax profits of £7.2 million (2003: £15.5 million, primarily
attributable to the exceptional sale of the Covent Garden Portfolio)
* Triple net assets per share increased to 299p (2003: 297p)
* Total dividend up by 10% for the eighth consecutive year to 4.69p per
* £25 million of disposals completed to capitalise on the continuing strong
* First acquisition made on behalf of the London Industrial Partnership
* Formation since the year-end of 'Iconic', a business partnership with
London & Newcastle Holdings Plc to exploit residential and mixed use
Rugby Estates' shares were first listed on the London Stock Exchange on 8 April
1994, when NNNAPS were 127p and the share price was 115p. April 2004 therefore
marks our first ten years as a listed company. Over this period:
* we have carried out over £600 million of property transactions;
* we have realised £52 million of pre-tax profit;
* NNNAPS have grown by 135% to 299p;
* the share price has increased by 139% to 275p; and
* shareholders have received 65p in dividends.
With the Group's strong financial position and experienced management team we
are well placed to grow both our directly owned portfolio and our asset
management business. Accordingly your Board looks forward with confidence to the
next ten years of successful growth.
David Tye, Chairman, commented:
"We continue to seek interesting opportunities in both on and off market
transactions for the Group, LIP and CGLP. During the coming year we are planning
to increase both our directly held portfolio and our assets under management.
However, properties will only be acquired which present clear opportunities to
enhance rental and capital values - our business is not simply about
"With the Group's strong financial position and experienced management team, we
are well placed to grow both our directly owned portfolio and our asset
management business. We have now been a listed company for ten years and your
Board looks forward with confidence to the next ten years of successful growth."|
Rugby Estates share price data is direct from the London Stock Exchange