Alpha Real Share Discussion Threads

[cerrito] 27/3/2020 00:10

Yes davebowler, that was a good RNS from RECI and you are right to say that the more info we have on ARTL's portfolio the better.
What I am trying to get my head around is to what extent ARTL who have 31pc of their loans in London will be impacted given that construction work in London is being suspended and indeed in the rest of the country with the unknown of material shortages. Given that they are secured and the 75% loan to GDV guideline my current reading is that they will suffer some inconvenience but will come out OK. Incidentally ARTL said they have had no defaults but given that they have only fairly recently gone into this business and the loans are in the 1 to 2 year maturity range, I would not have expected them to have any defaults yet.
H20 will be going through a very rough patch at the moment. I do not know but I should if the Madrid Shopping centre market has the same strategic issues that the UK one has.
The saving grace as as PA says the fact that at 12.10 £35m of the £123m assets were cash.
I would be very pleasantly surprised if the share price gets back to 200p or even 185p in the near future.

[davebowler] 24/3/2020 18:03

ARTL should make an announcement like this to reassure the market-

[cerrito] 17/3/2020 12:09

Good to see Mr Simpson buying shares even though he would have done better to wait.
I hold my ARTL shares with an old fashioned broker. I tried to sell but all there was was 500 to sell at 155p and 1000 shares at 146p so I did not proceed.
In here for the long term now

[davebowler] 21/2/2020 08:51

hTTps://m.londonstockexchange.com/exchange/mobile/news/detail/14429826.html

[pavey ark] 20/2/2020 08:05

By my calculations this represents an increase in NAV of c.11p if / when the money comes through.
This does look like the end or very close to the end of a long road .

Edit: with the previously recovered deposit in December £1.23m, this £9.3m and if they sell the Birmingham site the cash increase is £15m.
Given their track record I think these guys will put this to very profitable use.

[cerrito] 11/2/2020 13:25

I am going on the basis that the purchase of 21% of the company by Antler from Billien is something that we need not be concerned about too much.
I see that in the Sept 19 2019 RNS Antler is described as a connected company and my memory is that Billien fell into the same category.
That said comments welcome.
As per page 20 of last year's AR the Directors do not seem to have any connections with these companies.
On the assumption Alpha Global Properties with their 33% holding are also connected, we need to recognize the reality that we have no power..and thus quite natural that they do not reach out to private shareholders.

[davebowler] 07/2/2020 10:02

RECI is finding no difficulty in sourcing good deals-

Liberum on RECI
Large CMBS investment

Mkt Cap £396m | Prem/(disc) 3.9% | Div yield 7.0%

Event

Real Estate Credit Investments' NAV per share at 31 January 2020 was 166.0p, resulting in a 0.5% return for the month and an 8.4% NAV total return over the prior 12 months.

£38m of capital was used to fund a CMBS investment secured on a UK mixed-use portfolio (74% LTV). In addition, £2.1m was used to fund existing loan commitments. Cash on the balance sheet was largely unchanged over the month at £35.8m (10.3% of NAV). The gearing ratio has risen from 15.5% of NAV to 27.4%. An additional £33.5m of equity was raised post month-end and the manager reports a strong pipeline of deals that are expected to complete in Q1.

Liberum view

The positive start to the year follows a strong period of returns in 2019 (8.8% NAV total return), 19% above the level achieved in the prior year. The uplift in returns has been achieved despite a reduction in average portfolio LTV over the past 12 months. This is a result of the improved investment opportunity set. The manager retains a cautious investment approach and is focused on deploying capital in senior loans and core income bonds.

[pavey ark] 02/2/2020 08:52

My point is that they appear to be very flexible and ,up to now, very astute.
Most here will remember their large holding in "risk free" ground rents.
The minute the ground rent position came into question they were out and I suspect we have a similar position here.

As Simon Thompson in IC explained, the big banks have a problem with these loans regarding regulations and admin so leaving the way clear for the likes of ARTL.

These loans are short term and I have no doubt that if they become less profitable or if the risk increases this management will simply move on.

Spanish shopping centres, German data centres, commercial property, large city centre property developments, industrial estate (UK and Germany), ground rents and now short term commercial lending ........they will adapt and move on.

[davebowler] 01/2/2020 16:15

From memory, I think they made the point that they were finding a niche in lending in France and that the size of the loans they make in the UK had little market competition.

[pavey ark] 01/2/2020 11:08

Appreciate your detailed reply but then again you seem to suggest that they are sitting in the Channel Islands doing these loans on their own.

Perhaps a little extra reading required.

I don't think that any investor considers these loans to be risk free but the risk is low given that there are a large number of them and I suspect that the management would readily consider taking on any underlying property asset involved.

The company considers the "risk adjusted" returns to be very good and so do I.

[scburbs] 01/2/2020 09:24

Well I was buying in 2014 and 2015 so a high level of familiarity with the company.

It was indeed a random post, but it is also a fairly indisputable statement (so odd you seem to almost be trying to dispute it!). Any management team, however good, putting money out at a blended rate of 13.3% will have real impairment risk. RECI (mentioned above) has a 8.5% blended rate (which also will have real risk attached).

It doesn’t mean they won’t do well with the business, but none of the posts seemed to even consider what risks they were taking. The idea they aren’t taking any isn’t creditable.

Substantial property lending is a relatively new focus for them so limited track record. However, they do have an excellent recent track record when they have moved into new areas all based on their underlying real estate experience.

[pavey ark] 31/1/2020 16:15

I take it that was just a random post but more than willing to debate the record of the management team(lending or otherwise) with anyone who is actually familiar with the company.
My understanding is that they provide short term loans (up to two years) and the loans are all covered by substantial asset backing.

[scburbs] 30/1/2020 20:01

Blended rate of 13.3%? Presumably worthy of some debate on impairment risk?

[davebowler] 30/1/2020 08:38

I see RECI is raising fresh capital at a premium to NAV.

[davebowler] 28/1/2020 16:26

Agreed.
I've pointed out the merits of ARTL on the RECI thread.

[pavey ark] 28/1/2020 15:15

Even more importantly he explained how ARTL can supply these loans where the big banks can't.

It did puzzle me that they could command such high interest rates when commercial lending rates were so low.....now I know.

These guys are good and always seem to be one step ahead.

[davebowler] 28/1/2020 14:47

.......As the UK property lending book scales up then Alpha could easily make interest income north of £11m on a £85m property loan book at a blended rate of 13.3 per cent, a sum that covers the £3.8m annual running costs of the company and leaves surplus cash for further dividend hikes. Indeed, the cash cost is only £0.7m for the 1p a share quarterly payout. Moreover, there is a natural NAV accretive mechanism built into the shares from the double-digit investment returns made on property lending activities, and supplemented by capital upside on the equity interests in Madrid, Hamburg and a £1.7m equity investment in the high yielding Cambourne business park in Cambridge. Buy.

[pavey ark] 27/1/2020 17:32

IC,Simon Thompson, tip update.
Buy: they will increase the dividend and the discount should narrow.

[davebowler] 27/1/2020 13:39

LAST FIVE PUBLISHED TRADES
Time/date of execution Price Currency Volume Trade value* Trade type Trade flags MIC
13:10:15 27-Jan-2020 190.00 GBX 1,578 2,998.20 Off-book XLON
13:04:18 27-Jan-2020 189.95 GBX 300 569.85 Off-book XLON
13:01:44 27-Jan-2020 189.95 GBX 1,000 1,899.50 Off-book XLON
12:41:17 27-Jan-2020 189.55 GBX 1,576 2,987.31 Off-book XLON
12:41:16 27-Jan-2020 189.55 GBX 923 1,749.55 Off-book XLON

[davebowler] 23/12/2019 18:59

Chairman's statement :Increased portfolio weighting towards secured loan investment: ART continues toaugment and diversify its portfolio of securedsenior and secured mezzanine loan investments.As at 30 September 2019, the size of ART'ssecured loan portfolio was £47.5 million,representing 38.6% of the investment portfolio;post period end, further loans totalling£3.4 million have been funded.

[davebowler] 29/9/2019 06:25

Mention here as a major holding in MIGO.HTtps://www.ii.co.uk/analysis-commentary/best-multi-asset-investment-trusts-market-ii509336?utm_source=IBMW&utm_medium=email&utm_campaign=ii_weekend_round_up_newsletter_280919&utm_content=&spMailingID=7311659&spUserID=MTIxNjc2Mzk1NDM1S0&spJobID=1353191942&spReportId=MTM1MzE5MTk0MgS2

[pavey ark] 28/9/2019 10:33

With the Birmingham site under offer (£4.9m) and the recent purchase funded by treasury stock there is certainly potential for a sizeable boost to income.

The £4.9m will probably go onto their loan book and the yield from the property fund is 8.5%

I doubt if either will greatly increase admin expenses but even so 10% on the £4.9m (conservative) and a net 7% on the £10m invested in the fund gives £1.2m.

This £1.2m should end up very close to the bottom line.

I would think that given the new profile of the company the dividend would certainly rise, as will the share price.

A 5% yield on 200p would cost £6m/year

I'm not suggesting this will happen this year but it looks like the company is heading for a steady and sustainable c. 10% total return/year.
This return will be from loans and property investment returns but I don't think they can resist a bit of capital gains return and they are rather good at that.

NB: number of shares is now 59m

[jt35] 25/9/2019 17:19

Was re-tipped by Simon Thompson in the IC today

[davebowler] 25/9/2019 16:34

It could be a very positive sign that the Alpha UK Property Fund has accepted ARTL shares in lieu of their unquoted holdings.Are they looking forward to good news from ARTL's expected payout from India?
In any event it looks like its had an effect on the share price.

[pavey ark] 17/9/2019 16:07

The NAV is 212p (from results) and an absolute minimum additional 12p from Spain and India.

There has been no additional upgrade to H20 shopping centre valuation even though it looks like additional value has been added with the recent planning/development.
I am only adding a fraction up the money due from India as its been a very long time coming.

If the price falls further I will certainly buy back the 20% I sold.

At 170p I calculate the discount to be 24%

Some may remember that I called the recent buy back, almost to the day, and I suspect that an offer may come soon for the remainder of the shares.