Sovereign Reversions Share Discussion Threads

[hedgehunter1] 14/2/2007 12:48

Portfolio, break up value circa £140m, the company trade at £55m, with circa 815 units in the portfolio.

Debt circa £8.1m circa 14% gearing to MV, unheard of in a property company these days.

They account for £6.1m, of def tax, but that will taper, as assets are held.

Regulated tenacies sell in the auction room at 70% of VP value, this compnay buys at 40p in the pound, the tenat takes the responsibility for R+M, pure cash flow, shame costs of running compny growing, need to raise dividend, but as along term growth story this little baby is gem.

Stock is tightly held, and hard to get goood size of stock holding, but PIC have bought recent chunk, and that should show large institutions believe in this story.

Granger are the other player, and had bid on them last year, so being the only two listed companies specialising with hard assets, this will be interesting to see what happens.
Happy hunting.

[tonyrelaxes] 05/2/2007 16:14

It's getting really lively in here these days.
A post a month, for each of these last three months !

OX. The only info I know of in the public domain is in previous Accounts and Prospectus(s). My interest comes from these - and a bit of experience of property reversions.

In my view the share price has been at too great a discount from the Gross (vacant) property values, thereby giving scope for increase in share price as the (stock) market realises this. This will probably accelerate once the FSA regulation of the Reversion market comes into full play - thereby giving the activity some credence and acceptability with regulation.

We shall see...

[its the oxman] 05/2/2007 09:30

very quiet - steady uptrend over last few years is promising but difficult finding any decent info on this stock.

[its the oxman] 12/1/2007 08:44

any broker reports or price targets for this anyone?

[triples] 09/12/2006 23:44

"What's going to pay the bills? Where is the current income coming from?"

They could mortgage up the properties, but who's going to pay the mortgages? Do they charge the customers (elderly) a rent? I guess not, so the only income is from having a sufficintly large pool of houses so that enough are being vacated for sale and then using the sale proceeds for reinvestment & paying overheads.

I need to read up about how this all works.... the cashflow angle for SVN looks potentially hazardous.

No position as yet. T.

[zeppo] 30/11/2006 10:48

Interims next week?

[ianmcd] 16/8/2006 22:04

I have no thoughts on buyouts/takeovers unless the price fell to make the assets discounted.

I'm interested in companies with good asset backing like this and am hovering to buy, but am concerned about where the cash is going. advfn's stats show it dropping from 11m in 2004 to almost zero this year.

cash & securities: 11.24 25.70% -> 2.85 5.75% -> 0.35 0.66%

They could run out of cash to pay staff/creditors (also increasing amounts) before turning a profit. And they can't exactly sell a few houses to get more can they - that's the whole nature of the business, the folks stay in their houses.
What's going to pay the bills? Where is the current income coming from?

[gm1000] 25/7/2006 13:34

Inside shift on this Company?? Seems to be have been underperforming for sometime BUT has the Management got their act together at long last. Desirable Asset portfolio being Property which seems low risk but has not set the heather on fire todate. Could be a worthwhile mid to long term investment and is very much a commodity for a buyout or takeover bid. Anyone any thoughts??

[tonyrelaxes] 12/7/2006 22:56

Gelp, Hi

I don't think you have missed anything.

Realising the difference between NAV and Embedded and thus "profit" is dictated by time and circumstances to come ie. the possibility of reversions coming to fruition (by life tenants moving away or their death) and however long that may be, countered by deterioration to the fabric of the property and fluctuations in the market and management's fees and costs.

It's a waiting game - but with a good spread of properties this should, statistically, be an ongoing process with "profits" being crystalised regularly allowing for further purchases. Or a greater dividend.

This may sound impersonal but most business is!

Tony

[gelp] 12/7/2006 14:02

if the share price at 345 matches the NAV, at 345, let alone the 'embedded' value, surely the profitable business is in for free - or have I missed something?

[tonyrelaxes] 10/5/2006 00:29

hindsight, Hi

I don't think tax comes into any specific property realisation but on total profits of a year. An individual property is just part of a Trading Stock pool and is therefore not within Capital Gains. The company would be liable to Corporation Tax on net results, ie. after costs, overheads. losses brought forward etc. I could be wrong and I am sure those more learned than I will delight in correcting me.

Although owner occupiers tend to have "loved" their properties, bear in mind that as they "sell out" to SVN thay are generally elderly and loosing the entheusiasm, motivation and energy to look after the property. The elderly do often thoroughly neglect their homes, as much as themselves.

However, I am with you on this share - it is a longer term, geared, residential property market play and that seldom fails over a period of years.

Good luck - to us both!

[hindsight] 09/5/2006 13:31

I have followed these for a while and liked the idea of them, as buying property from tenants that love thier house and still have a stake in unlike other tenants ie BTL tenants can be hard work
I agree they trade at a discount to embedded value of 500p but how much of that would be taxed on realisation, at 30% of 500p - 330p equals 50p so is net of tax embedded more like 450p
Still a decent discount if the property market looks like it is to pick up again but dont see it short term

[tonyrelaxes] 08/3/2006 03:47

Alan. LOL - not in the medium term I think. Welcome aboard.

As far as I can see no one has suggested using companies in this market as a way round the Chancellor's U-turn not to now allow residential property in Pension Schemes after A-day (6 April 06).

Given the longer term nature of such reversions it seems an ideal way for Pension Schemes to invest in residential property. Maybe the Company itself should be promoting this aspect.

[alan russell] 02/3/2006 15:29

No longer an observer - have just bought a few so watch out, bound to slip now!

[alan russell] 14/2/2006 22:43

While trading at a hefty discount to NAV/embedded value may give some comfort to those holding a company or trust's shares, sometimes such companies just keep right on trading at that discount. In SVN's case as the embedded value cannot be realised by breaking it up and selling off the assets (other than to a similar company) there is every reason to believe that it will indeed continue to trade at a discount.

On the other hand the age profile of its tenants offers an expectation that there will be a significantly higher proportion of sales over the next five years. SVN appears to be play on (1) long term house prices (2) the opportunity/danger of finance raising/gearing & (3) the increased profile and acceptability v compliance costs of regulation. One would think its share price should plod steadily upwards apart from the usual short term "dips and blips" but I've thought that before and been wrong. I don't hold, merely an observer.

[tonyrelaxes] 14/2/2006 22:12

Hi. Being "in" SVN for some years via a BES company years ago, I welcome a discussion forum. Thanks JL.

Certainly something holding this back, but what?

There is no regulation of their type of activities at present although it is expected to come under the FSA soon. This would affect all other players in this market just as much, so I do not see it being this. SVN have a greater share price valuation discount to embedded Values than others (according to what I read a while ago).

[jlabrey] 07/2/2006 17:06

Yes, good news. Embedded value is high. However, significant regulatory uncertainty probably holding things back.

[mw8156] 04/2/2006 11:30

See veteran investor, John Lee has alighted on SovereigN a/c to FT.

[mw8156] 04/2/2006 11:29

See veteran investor, John Lee has alighted on SovereigN a/c to FT.

[jlabrey] 22/12/2005 17:25

I thought it was a good idea to revive interest in this company. It is one of Shares Magazine's tips for 2006 and seems to be a well run company in a market where regulation will improve the company's long term prospects. Embedded value is high compared to current share price. Other views welcome of course.

Website:

[sleepy] 15/8/2005 12:21

Tip in Fleet Street something or other, I am told

[mangal] 15/8/2005 11:48

In today's top 10 % risers. Does anyone know the reason for the rise?

[pawsnjaws] 12/7/2005 07:59

Sovereign Reversions lifts assets by 14%
Mon 11 Jul 2005

LONDON (SHARECAST) - Investment company Sovereign Reversions increased its underlying net asset value by 14% in the year to April despite a sticky equity release market as the housing sector slowed.

Net assets rose to £44.7m to £39m, with the embedded value of assets rising from 502p to 564p on a per share basis.

Profits for the year rose by 26% to £1.1m. Costs as a percentage of average gross assets fell from 1.93% to 1.60%.

Sovereign, which specialises specifically in equity release schemes, remains upbeat on the property sector.

'We are confident that the property market will perform strongly in the long term, as property valuations will ultimately be determined by supply - demand considerations, " chief executive Graeme Marshall said.

The dividend for the year goes up to 2.6p, a 4% increase over 2004.

[mangal] 21/6/2005 09:32

Zeppo, any chance of putting charts in the header?

[pawsnjaws] 21/6/2005 08:50

Hello )))))

Does anyone know anything about this company, any advice or knowledge would be appreciated?