Sovereign Reversions Share Discussion Threads

[cockneyrebel] 21/1/2008 13:42

Looks like it was Milton Homes that bought that 350K last week then - and paid £3 a share.

Why are they so keen to buy, paing all that over the market? I think we are in for a bid from these here:



Same type of business, keen to get a stake and paying 300p a pop.

CR

[typo56] 18/1/2008 18:29

I'll make the place even busier...

I think that the warrants (SNVW) are exercisable at 325p to 30 April next year. Is this correct?

Given that they are quoted at 37p-45p it does rather suggest warrant holders expect a decent upside in the next 15 months.

[buffin] 18/1/2008 16:13

Blimey, CR, calm down mate, you're making this board busy all on your own!

[cockneyrebel] 18/1/2008 16:00

I notice Pru and Norwich U are getting big on Equity Release lately, advertising a lot on TV - SVN a bid target from these two possibly, rather than Just Retire?

CR

[cockneyrebel] 17/1/2008 19:08

:-)

CR

[typo56] 17/1/2008 18:53

That's a shrewd observation Mr Rebel. I too wonder why someone would pay such a premium to acquire 350,000 shares.

A short closing at the bottom of the market perhaps?

Might they be of interest to a larger company, such as Just Retire?

[cockneyrebel] 17/1/2008 16:56

Has anyone seen the trade in here today?

350K bought at 300p!

What's with the desire to buy so keenly?

Anyone still holding here?

CR

[mikey34] 30/11/2007 19:10

The rather irrational sell off in this stock seems to have come to a halt.I feel it could be safe(r) to come back in now on a long term view.

[mikey34] 26/10/2007 10:01

Thanks,Ian.That could well be the feeling.I`m also a holder for the longer term and will consider adding.

[ianmcd] 25/10/2007 22:09

Possibly general sentiment about housing/property related stocks. SVN's assets are based on housing and maybe the market is thinking these have been a bit overvalued of late.
I remain a holder for the longer term.

[mikey34] 25/10/2007 19:51

This has now slipped quite a long way on fairly small volumes.Not aware of any real reason for it.Ideas anyone??

[guman] 07/8/2007 11:23

very quiet,

[mikey34] 22/7/2007 20:14

Some very good posts here.
Like the look of this stock. From a macro point of view it`s in a good place. This is an area likely to see a lot of growth and SVN seems to be below most investors radars at the moment. The Home and Capital acquisition will broaden the base. Embedded value at 520 is 35% above where we are now.
IC article positive on Friday and also Sunday Telegraph today.

[buffin] 18/7/2007 17:00

The Company has been notified that Graeme Marshall, Chief Executive of the
Company, has today acquired 36,500 quoted warrants in the Company at a price of
76 pence per warrant.

An outstanding price, but still a good sign.

[hedgehunter1] 18/7/2007 14:53

Been watching this little group, with interest over many years, and have too say am taking a slighly different view point for the following reasons.

1. The group, now has admin expenses running at £1.9m a year, which has increased faster than the increase in the portfolio growth.Admit they bought H+C but this is a huge overhead for such a small Cap company, do they really need so much cost on such a passive business?

2. The share holder have been diluted by the raising of the £3.5 equity, which has not been deployed, and if anything PIC must feel pretty hacked off at putting in £3.5m equity now worth £3.4m after a year.
3. Profits are all through valuation upside assumptions, and portfolio has not been inspected fully.

4. SVN being out bid by Grainger and Bridgewater time and again.

5. Bank debt has doubled, and they have hardly bought any property?

6. If the value of the asset is nearly £484.5p per share VP, sell at say 80% discount for the premium as quoted in accounts they mention, less tax treatment, you get back to current share price. How do you get a decent total return, as it doesn't come from income stream.
7. What are the directors paying themselfes one wonders, in comparision to Grainger who is far larger.

Be very interesting to hear what the cunning plan is at the AGM meeting.

My view is cash flow is critical, and with rising interest rates, why increase debt, unless you can earn in way in excess in terms of total returns given market risks.

Have to say have sold large volumes, and will be selling more, when possible.

[magnerita] 17/7/2007 20:49

I took the following from the results:

The P&L is pretty meaningless as merely all revenues stem from revaluation of the portfolio (GBP 8.1m out of GBP 9.7m of total income).

All assets are carried at 64% of the vacant asset value.

SVN hints that they are eager to acquire more portfolios, even at a premium to the likely carrying value in the accounts resulting in a loss at consolidation/recognition. Acquisitions are likely to lead to share issues (to its partner PICH) and/or more debt – positive as long as this is NAV and EV enhancing (in my view), which in the short-term is not the case if a premium to NAV is paid of course.

I am still confused by the dividend. SVN is building up a portfolio of assets, leading to cash-outflows (GBP 8.3m of cash outflow pre financing). I don't understand why they feel the urge to pay a dividend although it is small.

In conclusion – shares look cheap (valued in line with NAV and at a 36% discount to embedded value). On the other hand, given the interest rate hikes, it is unlikely that the embedded value will increase a lot this year as house prices are set to move sideways and asset acquisitions could lead to some dilution in NAV.

I like this stock given the high growth prospects of the equity release market after the regulatory change, SVN's strong focus and at current levels I am also looking to add more to my position.

[ianmcd] 16/7/2007 21:01

Results look good. There's a lot to read but from what I can see so far...
Net asset value is up 8% at 342p, and at current price of 350p that means the business is virtually thrown in for free as the assets are fairly solid.

Dividend raised by 7% but still makes it under 1% yield.

Pretax profit up to 7.2m (from 2.8m last year) which is a big hike. Strangely my figures for their previous PTP was -0.4m (normal) or 0.14m under FRS3 but these new figures are under international stds for the first time (IFRS) making a direct comparison difficult but I believe they have requoted previous figures under this standard. Whatever the measure was it is a substantial rise. I make it 50p pretax per share, and EPS is 33p, so PE is now 10 and a huge dividend cover so plenty of potential to keep raising it.

They quote an "embedded value" of 485p, not sure of what that is yet.

I wasn't too sure how they would keep the cash flow going in the short term until they got to make more money from sales but it seems they are doing something right.

The price didn't budge much so maybe very few others are watching. I am inclined to add a bit to my holding when I have the chance.

[zeppo] 05/7/2007 14:09

I believe that the Preliminary figures will be published on 16th July 2007.

z

[magnerita] 30/4/2007 17:35

Comment from Just Retirement's new business figures this morning reads positive on Equity Release....

'The group's equity release business is trading very positively, with sales
continuing to demonstrate excellent quarterly growth supported by the Company's
ability to offer attractive and competitive terms to end consumers. Just
Retirement's operational platform within equity release is now able to cope with
substantially more business than 12 months ago, where its strict service levels
led the Group to restrict applications after an initial exceptionally busy sales
period, the completions from which are reflected in the third quarter of the
prior year. The Company is confident of sustaining strong sales growth in this
area, with the current inverted yield curve accentuating its pricing advantage
over non-life company providers.'

[zeppo] 19/4/2007 10:15

My advisor still positive on this.

z

[magnerita] 16/4/2007 13:04

nice article in this weekend's FT money on home reversions

[magnerita] 12/4/2007 11:54

given new regulation - equity release market looks ripe for consolidation. I like this one, 15% discount to its embedded value.

If consolidation kicks off, i dont think we should wait 10 years before this will start to perform.

m

[hedgehunter1] 27/3/2007 16:28

Stock is very tightly held. The forthcoming regulation has slowed everyone down in the sector. The assets keep rising in value, and the business model is sound.

With only £8m of debt, and a provision of £6m to cover CGT, frankly with a VP value of circa £140m, it has got to be the cheapest property play out there.

Now that SVN own 100% of Home and Capital it now has got the deal flow.

This is a lock away Buffet stock, and relook in ten years time, look at freshwater for that.

[buffin] 15/3/2007 13:39

It's invisible to the hot money crowd.

[its the oxman] 15/3/2007 12:03

amazed this has hardly budged given market fallout