The other big positive is they are now stuffed with cash and ready to put it to work. If market wobbles continue then should hopefully get some pretty juicy returns in due course. ST no doubt will flag up the huge bump in nav later. No one else really seems to have noticed. |
Yes that's great news and a credit to the team.They are well paid but produce the results! |
Disposal of Frankfurt at a huge premium to book value. NAV near 200p now. Shares should move to new highs soon. |
Ran through the interims.
NAV continues its stately increase up from 172.9p to 178.4p in the six months to end of September plus of course the dividends- presumably two of 0.6p.
That said there is a change in the portfolio with the Freehold Fund holding more than halving in the six months to £13.96m, the introduction of Hamburg, continued investment in Frankfurt and Leeds as well as mezzanine loans.
Their portfolio is pretty well insulated against a messy Brexit, though I guess AURE would find the going hard in such an eventuality.
I reduced my holding by 28 pc in the tender offer. |
Results as expected with the exception of the Monk Road carrying value.
I think that it is worth noting that a valuation of 9% of a GDV is erring rather heavily on the cautious side but it will all be sorted out in due course.
My target here is 15% compound share price growth for the next three years or £2.
Given the current projects in hand things may even go better that that but 15% would certainly keep me happy. |
 Completed a second top up purchase this morning and I'm rather surprised to be on my own.
Made my initial purchase a few months ago and with the two additional purchases now have a reasonable holding at c.132p
The purchase of £1m of shares by a director seems to have been ignored.
The Hamburg deal though not highly significant shows how nimble these people are.
The legal dispute in India looks like it is coming to a conclusion.
The most significant factor in my additional purchase has to be the build to rent projects, especially the Leeds Monk Road scheme.
These projects have been carried at a value of c15% of their gross development value but the company has said that the Leeds project now has a GDV of £153m up from £55m due to new planning approval.
If the 15% valuation is applied the carrying value goes from £9m to £23m or 21p a share.
The company have even stated that this revaluation will have a material effect on the valuation and this will be announced on the 16th of Nov.
I'm not in here for the quick gain as I rate the management team but it does look like things are certainly on the move. |
29 October 2018
LEI: 213800BMY95CP6CYXK69
Alpha Real Trust Limited ("ARTL" or the "Company")
Results of Tender offer
The Board of the Company today announces the results of the tender offer set out in the circular published by the Company on 5 October 2018, which closed at 3.00 p.m. on 26 October 2018. The Tender Price was 138 pence per Ordinary Share.
In total, 1,584,564 Ordinary Shares were validly tendered under the Tender Offer, representing approximately 2.3 per cent. of the Company's Voting Shares in issue as at 26 October 2018 (excluding Ordinary Shares held in treasury), including any Ordinary Shares validly tendered in excess of the Basic Entitlement. All valid tenders will be satisfied in full. |
I have gone in for my basis allocation and a further 20pc for the excess tranche. Given that the concert parties are not participating I am assuming quite a lot of my excess will be bought out...and to be honest not sure why I did not tender more. |
I'm pleased about the tender but am not participating. |
Glad that I have a bit of time to consider the tender offer; given recent share price history and relatively wide bid offer spread, 138p has its attractions but do not need the cash and still at a huge discount. I guess there will abit more uptake than that of this time last year at 123.1p |
Mind you, I think none of FIAF's freeholds are of the toxic variety.
See post 188. |
Thanks hpcg for pointing that out |
Do not understand the economics of doing a buy back for just 1k of shares.
Was not expecting the news of the Hamburg purchase. Given the way the rest of my portfolio is structured have no strong views either way, |
The market seems to have yawned at this morning's update and that- to me- is a logical reaction.
Steady progress in Frankfurt, PRS and mezzanine loans, although NAV increase not great
As mentioned in the AR, FIAF reduced by £3m in the quarter. Also note that have sold a further £6m, since June end.
Not terribly keen on this as I always have regarded FIAF as a safe asset and note that 2017 annualised return was 8.9pc.
I would not have expected them to discuss discount management in a Trading statement and be interesting to see what if anything they say in the Interims.
I do not see myself buying or selling in the foreseeable future. |
I guess one reason ARTL would give for not increasing the dividend and also perhaps for not doing share buy backs is the £38 m of investment identified for PRS and Frankfurt. In addition if you look at their cash flow statement, cash from operating activity in the last two years has been negative and pretty much break even in previous years.
Given that in the PRS schemes they have yet to sign construction contracts and are fine-tuning the construction plan there will not be much change from four years to build, fit out and start to collect rent payments. |
31 /3 /2018 NAV 172.9p
ART currently focusses on high-yielding property, infrastructure and asset backed debt and equity investments in Western Europe that are capable of delivering strong risk adjusted cash flows, including build-to-rent investments. The current portfolio mix, excluding sundry assets/liabilities, is as follows:
.........................................31 Mar ...........31 Mar
...........................................2018........... 2017
High yielding equity in property
investments: ..............................21.7% 47.1%
Ground rent investments:.................... 24.3% 18.8%
Build-to-rent investments: .............28.2% 9.7%
High yielding debt:.................... 11.0% 14.2%
Other investments: ...................9.4% 8.2%
Cash: ........................................5.4% 2.0% |
Part of the reason for the share price increase was the 4p NAV increase in Calendar Q1 2018 and generally upbeat comments in the AR and good progress on PRS and Frankfurt.
I have gone through the AR and have no major comments; obviously following the August 2017 sales of 70 pc of H20 and the consequent change in accounting treatment difficult to make comparisons of the P&L.
Note that in this last quarter they ran down £10m of their investment in Elm and increased their investments in mezzanine loans by £7m and I guess the rest of the cash would have gone for ongoing investment needs of PRS and Frankfurt.
Note no charge in shareholder base; the top seven shareholders this March were the same as March 2016 and the only one who had changed their shareholding by more than 1pc was the second largest Billien who went from 20.44pc to 22.29pc. This explains why the bid offer spread is so great.
I am not sure what to do here; my instinct would be reduce my exposure but as my online stockbroker would not allow me to buy them I had to buy them from my full commission broker. I do not see much downside and if not India then either PRS or Frankfurt could give us some modest upside. Be good if they could increase the dividend and do some buy backs- I could see no commentary in the AR on how they plan to deal with the discount going forward. They could spend some of the £3m they have got back from FIAF-see note 22.. |
ST tip update in IC. Discusses big potential uplifts on PRS schemes. About £13m on Birmingham. Leeds 4 times bigger so expects big gains there as well. |
No idea, but welcome |
Well it looks even more positive for ARTL than it did (and it did look very positive).
The Indian Supreme Court looks to have given the nod to ARTL but nothing is 100% certain.
With the Indian property on the books at £4.9m and the current value of the claim at £14m there is certainly plenty of upside here.
If ,as I expect, the Supreme Court finds for ARTL then we could see a reasonable jump in the share price or the discount to NAV. |
Rather a terse goodbye to Mr Sage as a director but as he seems to be very much HK focused and ARTL have not to the best of my knowledge shown any interest in that part of the world not sure what value added he could bring.
I have more than perhaps I want in them and till this announcement ARTL have been rather out of sight out of mind.
Nothing really wrong with them and trade at a decent 25% discount to December NAV but given that 60% of assets are in UK property not clear what can cause a rerating.
I note they have not used their authorization to do buy backs and of course the dividend at 2% yield approx is not exciting. |
Thanks for clear explanation scburbs |
As at 31 December 2017, the unaudited NAV per ordinary share of the Company was 168.4p |
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