Ucp Share Discussion Threads

[hugepants] 20/7/2011 08:52

Interesting. Added.

[horndean eagle] 20/7/2011 08:46

Good spot. Picked up another 100k at 20.25 this morning. Chipping away some more at the overhang. Not sure whether share buyback is being held back because of the Singapore proceedings but I have made the company aware of Nectrus obligations and have been told that they will withhold management fees if they don't satisfy them.

[darlocst] 20/7/2011 08:26

Also this came up on my google search today.



Country Issuer Sector Instrument Type Amount Lead Manager Launch
Singapore Unitech Reit property IPO $700m DB/JPM/MS/UBS

Assuming this is a joint Unitech/UCP REIT that would value UCP's share at around 60p/65p.

[darlocst] 20/7/2011 08:23

This is getting interesting now, new non-exec appointment:

"Mr Sallnow-Smith...is Chairman of The Link Management Limited, investment manager to The Link Real Estate Investment Trust, which is currently Asia's largest REIT."

Not a coincidence as Aubrey Adams, Chairman of UCP, says: "I have no doubt that Nick's extensive experience in real estate, and in Asian markets in particular, will enable him to make a valuable contribution to the Company as we focus on progressing the current development programme and reviewing options to maximise shareholder value."

[darlocst] 13/7/2011 07:54

Well there's around 20p of downside to aim for jj45, have a go :)

[hvs] 13/7/2011 07:54

Looks like Dacoites in cahrge.

[jj45] 13/7/2011 00:25

downward trend, worth shorting from here?

[hugepants] 10/7/2011 20:28

Got some on Friday thanks to whoever flagged it up on the Fool website. This was off my radar since I thought it had been taken out at 30p. Didn't realise the offer had been refused.

[darlocst] 07/7/2011 21:35

Horndean Eagle/hoveite

I did say that I thought the valuation didn't stack up in my original post. Listening to the report again I agree it isn't explicitly clear but it does talk about Unitech expecting to raise $400-$600m on exit, they only own 40% of the SEZ portfolio and if they want to list the whole of the joint venture they can't do it without shareholder approval from UCP and the board's agreement and they won't be getting any more than a 40% share of any sale.

I've been gradually buying back into UCP over the last 6 weeks following the positive letting news. This report, whilst interesting and potentially a catalyst for a quick re-rating given the stated 3 to 4 month timeline, isn't why I'm bullish on UCP again (having sold out in H2 2010).

A common sense look at the potential lettable area, the balance sheet and now the cashflow thats building over the next two years shows how undervalued UCP is. At a minimum it should be trading at the 40p level right now. Its only because its assets are based in India and its shareholder base is stale due to so many holders been locked in from much higher levels that it is trading at its current depressed levels imo.

[horndean eagle] 07/7/2011 19:47

I think Darlcost may be a little optimistic on the numbers and agree that $400-$600m would be for the entire operations. Last reported NAV was 50p. The valuation methodology used was:-

The valuation methodology used is the same as for the 31 July 2010 valuation. A discounted cash flow (DCF) basis has been used for actual income and anticipated income from agreed lettings and from ongoing development activity; land value reflecting the effect on value of any construction to date is used elsewhere. Directors believe that this is the most appropriate methodology given the uncertainties in the IT office market and extended development horizons for the projects.

Its fair to say that NAV will have risen since then due to leasing progress. Those properties being valued based on land values and work completed will have risen sharply. The NAV calculation was based on the properties yielding between 11.5%-12%. That is a pretty generous yield on offer and I would guess these may have tightened since. If they manage to get the float away it will confirm the NAV valuation and also remove the bad smell that Unitech are currently responsible for.

Its worth standing back and taking stock of what has happened since last year at UCP. Unitech were ready to offer 31p a share for UCP. At the time they had 2.4m of space either leased or signed agreements to lease. Fast forward a year on and they have now leased or signed agreements to lease 5.1m feet of space. That is an increase of 112.5% over the period. Outlook looks far more bullish as well and yet the shares are markedly lower than they were trading even before the bid last year. A Singapore listing would be a more immediate catalyst to re-rate the shares and I could see the shares easily doubling over the next year. If it doesn't happen I still believe the shares could double over the next 12 months as investors finally cotton on to the fact that a couple of years down the line UCP will be reporting very substantial profits.

[hoveite] 07/7/2011 16:53

The linked report is not explicit about whether the $400m to $600m they are hoping to get is for Unitech's 40% share of the SEZ portfolio or for the entire portfolio.

I think it is more likely to be the price of the entire portfolio which would value UCP's share at $240m to $360m which seems more in line with UCP's NAV.

Isn't it more likely that they would try to list the REIT at around NAV than at well over twice the NAV?

That said, this still looks like an interesting situation - it's just that the upside may not be as much as darlcost suggests.

[darlocst] 06/7/2011 13:53

Nice link Horndean Eagle.

Unitech hold 40% balance of the 6 SEZs.

UCP hold 60%.

The link mentions that Unitech hopes to raise $400m to $600m by listing their SEZ portfolio in Singapore. Timeline 3 to 4 months. This seems to be a variation of the Unitech Infra proposal that Unitech came out with last year which doesn't seem to have gone anywhere since.

That values UCP's share @ $600m USD to $900m USD

UCP market cap = £80m ==> $130m USD.

A slight valuation mismatch there!

Actually looks on the ambitious side given the NAV, which will now be on the up again, only values UCP at $300m USD approx and why would any serious investor buy into this Singapore REIT when they could get exposure via UCP for a lower price?

So if they are going to get this off the ground they are either going to have to come back with a better offer for UCP or work with UCP to serious re-rate the shares over here.

The current valuation of UCP looks way too low to me at the moment anyway. The letting news this year has been excellent and UCP will be pulling in £20m per year revenue in two years time based on 5m sq ft let. The 6 SEZs have a total sq ft potential space of 20m sq ft so plenty of potential to increase let-able space as demand grows. Balance sheet is net cash. The downside here is surely minimal and the upside multiples of current share price.

[horndean eagle] 06/7/2011 12:44

Perhaps of more importance and significance:-

[bones30] 04/7/2011 15:06

I'm back in.

[scburbs] 04/7/2011 14:51

UCP are a flurry of good news these days. The market is not remotely interested! I have added a few more.

[whibbled] 04/7/2011 14:38

Portfolio Update 4 July 2011

[scburbs] 20/5/2011 18:17

Thanks HE.

It has seemed a bit random given the bond loss was in May 2009, yet Nectrus were in the market buying shares with the management fees after that up to Jan/Feb 2010. Clearly the offseting didn't start until sometime after they agreed to compensate.

"Nectrus Limited, the Investment Manager to the Company, is an affiliate of the Unitech Group, the Company's co-investor in the investment property under construction. It receives a management fee and performance fee from the Group as detailed in Note 6. In May 2009, Nectrus Limited agreed to compensate the Company for a loss of £4,919,424 incurred on a structured note investment. This amount is being repaid by way of offsetting the investment management fee due. At 30 September 2010 the balance owed by Nectrus Limited to the Company amounted to £2,552,144 as detailed in Note 10. At 30 September 2010 Nectrus Limited was beneficially interested in 16,256,517 Ordinary Shares in the Company."

[horndean eagle] 20/5/2011 14:08

The buyback was postponed because Nectrus were covering losses that UCP incurred on some bonds they told UCP to purchase. These losses were being taken out of Nectrus management fees. The amount will be cleared after this quarters management fee is paid. Afterwards the buyback will start again. It is in the notes to the accounts. The buyback when it starts again should help clear out the overhang. £1.1m a quarter would take out around 4.6m shares a quarter.

[scburbs] 20/5/2011 13:38

I am back in here following the leasing progress. What has happened to the Nectrus buying? The last acquisition I can see is the announcement on 1 February 2010. Surely they should be buying like crazy giving the ludicrously generous fee arrangements! Something very odd going on there, have there been any announcements that I have missed?

[sailing john] 26/4/2011 13:25

Looks like a bit of interest now with 138k on LSE and +7%
NAV circa 50p vs price of 26.5p. Lettings are the key and the recent announcements provide comfort that they are progressing.

[sailing john] 26/4/2011 12:37

Off he radar and not much stock about?
My 2*10k buys are the only trades on LSE (Plus?) and have moved the price a little!
SJ

[sailing john] 26/4/2011 12:22

Positive lettings update ths mornning
Added @ 25.81 and 25.9
SJ

[whibbled] 21/2/2011 14:39

February Presentation.............

[horndean eagle] 17/2/2011 19:38

There is lots of cash on the balance sheet and construction costs are modest. If they can let most of an SEZ they can then look at selling it off and use the cash to develop the rest of the portfolio.