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Summit Germany Share Discussion Threads
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Summit Germany (BUY, TP €0.95)
Financing on more favourable terms
Summit Germany has completed the financing of an existing 9-asset portfolio with a 7-year, €33m debt facility. An interest rate of 2.1% had previously been announced to the market on 19 January as part of a binding term sheet, but the final rate agreed is 14bps lower, at 1.96%. The €50m shareholder loan which attracted an interest rate of 9.5% has now been fully repaid, saving interest costs of €4.75m per annum.
Summit Germany has c.€90m of free cash available for acquisitions, with detail on deal negotiations expected in the coming weeks.
Today's announcement is the second time since Dec-14 that SMTG has secured financing on more favourable terms that previously agreed in principle. Last time, the company originally announced a rate of 3.4% on its main facility, with a final rate of 3.14% agreed, 26bps lower.
Although today's interest saving only represents c.€50k per annum, it reinforces the strength of the company's banking relationships and negotiation powers, with the interest saving flowing straight through to net income. Our recently published note last month highlights the fact that we believe the ability for SMTG to continue to grow its distribution level is currently underappreciated by the market. We forecast up to 25% dividend growth next year, from 4.8 cents at present to 6.0 cents, representing a FY16 dividend yield of 6.9%.
Recent share price performance has been very strong, delivering a shareholder total return of 28% YTD. However, SMTG still trades on a 12.5% discount to our FY16E NAV of €1.00, and our price target offers a 14% total shareholder return. This combined with the expectation of forthcoming announcements of significantly income acquisitions over the coming few weeks, we reiterate BUY.|
|On the up again, but still by and large unknown. Maybe IC need telling we exist.|
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The Equity Development Team|
|Change of FD, normally a negative......but share price rising, and a little turnover.
New FD a good name, or just the fact from outside the company?|
|Good results today. On the matter of dividends it wouldn't be a bad idea if they paid them in sterling so that we don't have to bear the conversion costs.|
|Agree with divs Irene........and the need for more profile.
With large majority holding they need more PIs.|
|What this needs is to raise its head above the parapet and attract some interest. I think the divs are safe for the moment - directors interests are aligned with ours I hope.|
|Interesting to see if this time they keep paying the dividend and dont carry too many borrowings.|
|Don't believe ADVFN Financials on the dividend. Summit pay quarterly in EURO not $US. Other currencies have cents apart from the US dollar.|
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