Alpha Real Share Discussion Threads

[scburbs] 20/11/2015 09:58

Great set of results. Very pleasing to see 7% increase in H2O valuation which really starts to derisk the 2017 refinancing of this asset.

At 84p still over a 30% discount to NAV. Still inappropriately cheap.

[skyship] 20/11/2015 09:38

BT - so annoying when that happens - still you do hold. Happily I did top-up a couple of weeks ago - have decided to let a few go @ 84p

[badtime] 20/11/2015 09:22

I was going to top up yesterday...doh

[skyship] 20/11/2015 07:24

ALPHA REAL TRUST ANNOUNCES ITS HALF YEAR RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2015

Highlights include:
-- NAV per share 123.5p: 30 September 2015 (113.2p: 31 March 2015)
-- Adjusted earnings per share of 3.0p for the six months ended 30 September 2015
-- Declaration of a dividend of 0.6p per share, expected to be paid on 18 December 2015

==============================================================================

# So, with the dividend paid quarterly the prospective yield at 75p = 3.2%

# Also at 75p the NAV discount = 39.3%

(NB: though presumably the weak Euro will have taken a few pence off the H2O valuation)

The more I read their statements the more I wonder whether ARTL should not be viewed and valued rather more kindly. Certainly they seem well underwritten at these levels.

[badtime] 11/11/2015 12:28

So done financials due soon

[skyship] 26/10/2015 14:17

Nick Greenwood, manager of Miton Worldide Growth I. T. (MWGT) recommends ARTL in an extensive article on trusts in this week's IC:
====================================================

Alpha Real Trust (ARTL) was originally an Indian property specialist; however, that market blew up during the global financial crisis before the cash raised at launch could be committed. Its management took advantage of its extreme undervaluation by acquiring 30 per cent of it, and have since increased their holding to around 45 per cent.

The trust changed its focus to high-yield property debt and during 2012 related assets such as the Freehold Ground Rent Fund and Property Investment Portfolio were rolled into it, with the assets acquired at NAV.

Cash has also been used to buy properties from distressed lenders such as Royal Bank of Scotland. Historically, the assets tended to carry high leverage, but the recovery in property values and banks' renewed lending appetite has transformed the trust's outlook. There is scope for revaluation and refinancing given today's low interest rate environment. Alpha Real Trust also tends to move to its own tune regardless of the general direction of global markets.

Alpha Real Trust's managers are clearly good at what they do and when sufficient loose holders have exited, the vehicle is likely to be taken private at a level closer to NAV, once a deal is struck with minority holders. In the meantime, the recently stated objective of steadily increasing the dividend should underpin the share price. The shares yield around 3 per cent and trade at a discount to NAV of 33 per cent.

[skyship] 21/9/2015 14:40

hm - all a bit incestuous; but that has always been the case with ARTL, AURE & IMPT...should be good value left on the table as it unravels...

[scburbs] 21/9/2015 13:57

Decent acquisition at 17% below NAV of a vehicle which has been successfully degeared (albeit still carrying expensive debt to ARTL itself). Still a fair chunk of vacancy to sort out which leaves scope for further upside.

Not sure what this means for the outstanding mezz debt which AURE would normally be incentivised to repay by November this year.

"Alpha Real Trust announces that it has purchased 11,320,801 shares of AURE, representing 20.5% of the share capital and voting rights. The consideration paid for the shares was £3.2 million, representing a price of circa £0.28 per share. Alpha Real Trust held no AURE shares prior to this purchase.

The Net Asset Value per share for AURE as at 31 August 2015 was £0.33821 per share."

[pavey ark] 04/9/2015 10:10

Cheers scburbs, happy with that.

[scburbs] 04/9/2015 09:56

Hi Pavey Ark,

The relevant shareholding is the 32% held by Alpha Global Property Securities. This is a vehicle owned by the manager, Alpha Real Capital LLP.

[pavey ark] 04/9/2015 09:02

Just having a look here and have just gone through the results.
Does anyone have a figure for management option holdings as the shares held looks rather low ?

[scburbs] 04/9/2015 08:10

Agreed it would be good if it wasn't paid off, but that seems highly unlikely.

There is still the refinancing of the Spanish loan in a couple of years which absent a sale is likely to require a cash injection.

[tiltonboy] 04/9/2015 07:54

We have to accept that future returns will not be as attractive as those negotiated at the height of the crisis, and it is inevitable that those expensive loans will be repaid.

An orderly wind-up of the company should be at the forefront of the minds of the directors in the absence of other opportunities.

[scburbs] 02/9/2015 15:03

Active UK Real Estate Fund continues to perform very strongly. Mezzanine loan from ARTL is now below 60% of the GAV of the fund. With a 9% coupon and a 2% penalty if the loan is not repaid by November 2015 I expect this loan to be repaid at par in the next 2-3 months.

hxxp://www.activeukrealestatefund.com/uploads/docs/factsheets/2015-Q2%20AURE%20Fact%20Sheet.pdf

[davebowler] 10/8/2015 12:02

Extract from ARTL website -
ART has 19% of IMPT’s ordinary share capital, representing £0.8 million in equity value based on IMPT’s share price, as at 30 September 2014.
So I think that's now worth c. £3m an improvement to ARTL's NAV of c. 2.5%

[scburbs] 10/8/2015 11:34

Good statement from IMPT as they have said they will either refinance at end 2016 or if not probably start a managed wind down which will reduce ARTL's risk ahead of loan expiry in 2018.

Looks like a great investment for ARTL getting 15% p.a. having made the loan when the financing market was much tougher. Previous worry was that IMPT did not seem to have any active strategy for degearing other than hoping property values go up enough! Now we have a sensible strategy (i.e. either refi/raise equity or wind up) which makes ARTL's 15% yielding loan look even better, albeit it may be repaid in 15 months or so if things go well for IMPT. If things do go well for IMPT then ARTL could also pick up a few million upside on its 19% shareholding.

[davebowler] 10/8/2015 11:13

Extract from IMPT RNS...
The 2013 refinancing took place against a background of much tougher market conditions and consequently the ongoing financing charges for a significant proportion of the Group's longer term borrowings are relatively high. Since the terms of the loans from Europa Mezzanine Finance Sarl and Alpha Real Trust Limited provide for the payment of certain fees in the event of prepayment in the first three years following drawdown, the Board therefore intends to target a refinancing in the fourth quarter of 2016. Such refinancing could, subject to shareholder approval, include an issue of new equity or other financial instrument which could materially lower the Group's financing charges.

[skyship] 10/8/2015 09:45

IMPT topping the leader-board today...

[tiltonboy] 14/7/2015 18:04

It feels like they are trying to get the price up, without doing much about it!

[scburbs] 14/7/2015 17:49

As a NAV enhancing strategy not much use, but as a discount managing tool potentially very effective and cheap.

[tiltonboy] 14/7/2015 17:46

Surprised how aggressively they have bid this up in the last few days, for so little reward!

[scburbs] 14/7/2015 17:15

Nibbling at a few more of their own shares. Looks like they may be starting an ongoing buy back plan to manage the NAV discount down to a more sensible level. A 10% discount to NAV (i.e. a sensible discount) would be around 40% uplift in the share price from here.

[scburbs] 02/7/2015 08:40

Good to see ARTL back on the acquisition trail as they move out of defensive mode and towards growth reflecting increasing confidence. It would be good to see them get the Spanish refinancing done as it is an unknown drag on their cash resources, albeit the mezz loan repayments should continue to top up cash resources.

Also a small sharebuyback, perhaps the first of many as a good use of cash, albeit they probably need a tender offer at a premium to achieve much volume.