Assura Share Discussion Threads

[tradez4dayz] 30/6/2024 12:01

The trouble is two fold here with peoples understanding 1. They have a fully covered dividend so it isn't any trouble with their cash flows. If anything the main issue with reits having to pay out 90% of their prb earnings is that it leaves them with no cash to invest in opportunities or capex. So using scrip dividends does allow them to do this.2. The whole point around the obsession of a reits share price being nav, if you look at the USA reits they barely mention nav, the focus as it should be is on ffo's and earnings potential. Raising capital at a discount to nav can still be earnings accretive and that's how the USA reits look at it and incredibly successfully too. So my summary in this case for assura is that this really isn't an issue, obviously there are nuances with other reits but here I am relatively relaxed.

[blueclyde] 30/6/2024 09:41

I am sorry that is not correct. You are still issuing shares to pay the dividend and you are issuing the new shares way below the NAV ie the true value of the shares which causes dilution, same idea as raising money to a steap discount to current share price. I will stop this now as banging my head against a brick wall. Most REITS have bounced 30% off their lows but this share despite having the NHS as the main client is hitting new lows for the cycle. Have a ponder why perhaps.

[alotto] 29/6/2024 20:05

(if dividends were not covered by earnings then yes I'm totally with you and the dividend payout would have to be lowered, but it is not the case of Assura).

[alotto] 29/6/2024 20:03

blueclyde I get that but it doesn't dilute the value of your shares because the spare cash is retained. It is not just issuing shares at current price with nothing on return. Shares are issued and cash retained. The two cancel each other out. I hope that helps.

[blueclyde] 29/6/2024 19:59

There is no buy back..... The shares are issued to pay the dividend so add to the share count and dilute the existing share holders....

[alotto] 29/6/2024 18:44

The real elephant in the room is the massive debt and the higher interest rate at refinancing

[alotto] 29/6/2024 18:33

There is a benefit to the buyback because the cash is spent to repurchase shares and that increase future cash distribution.
If the shares are not repurchased but teh cash distributed, investors may not reinvest in the same company but invest elsewhere or spend the cash as they like it, therefore not compounding. If all shareholders were reinvesting the dividend, it would be just the same as implementing a buy back. The only difference is that the net asset value wouldn't change but you'd own more shares in the company.

So you don't give any value to the retained cash? It doesn't contribute at all to the current asset? Where does the cash go if not contributing to increase NAV and cancel out the issue of new shares?

[blueclyde] 29/6/2024 18:06

Just take a step back and think about what you are saying.... You did not spend cash to issue those shares you say... No but you diluted the existing shareholders and brought the NAV down. If what you have in your head had any ounce of logic no company int he world would issue cash dividend or buy back stock... Think about what you are saying..

[alotto] 29/6/2024 16:24

The NAV doesn't change. It is true that you divide the asset value (consisting of value of properties, cash, inventory, etc.) by a higher number of shares. However you did not spend cash to pay dividends for those who prefer shares to cash dividends. Cash not spent on dividend payment is returned back into the business, the asset value therefore increases. The number of shares goes up with the issue of new shares. The two factors cancel each other out.

[blueclyde] 29/6/2024 15:22

"Assura essentially issues shares at the same price of current market price, so there is no dilution for current holders"It is alarming that people do not understand the basics of what you are invested in. The NAV is simply the value of the properties divided by the number of shares in issue. The NAV here off the top of my head is like 50p a share. Dividend yield is 8%. As you say the new dividend shares are issued at the market price which is well below the NAV currently so you are diluting the existing share holders as now your NAV calculation is the total of all the new shares divided by the property values which brings the total NAV value down. It is a terrible thing and it is even worse when you issue new shares below their worth.

[alotto] 28/6/2024 21:18

I don't get the NAV issue. NAV is not indicative of earnings. You can't sell the shares received in lieu of cash dividend at NAV value/price.
Assura essentially issues shares at the same price of current market price, so there is no dilution for current holders, dilutuon from issue of share is compensated by the retained fcash dividend.
It is actually an excellent method to raise cash availability.
Imagine this, Assura issues one share at 40p, retains 40p of dividend not paid as cash. The capital could be reused to repurchase the exact same share. No effect on current shareholders.
Indeed dilution happens only when the issue of shares is made at a lower price than market price.

[blueclyde] 28/6/2024 19:56

Apologies I am not being rude. Let me clarify in black and white. Paying a dividend via issuing new shares when the price is so far below the NAV is a ponzi.

[goliard] 28/6/2024 12:12

I didn't miss your point. I just added the thing you missed to it. Really no need to be rude though.

[spectoacc] 28/6/2024 05:57

Moron discount refers to Truss/Kwarteng, 2022.

On the plus side, it greatly restricts Labour/R Reeve's room for manoeuvre, even in the event of a so-called super-majority.

[blueclyde] 27/6/2024 18:15

No there is a moron discount built into UK equities since 2016.

[george stobbart] 27/6/2024 18:07

I don’t drink cider as it’s expensive because of tories taxes

Only polish beers from Sainsbury’s basics

Sir Kier Starmer will open up the borders with our EU friends and make polish beers even cheaper

[grannyboy] 27/6/2024 18:01

Starmer is intending to raise capital gains tax on shares, though it won't effect george stobbart because he spends all his benefits on tins of cider.

[alotto] 27/6/2024 17:45

Rt Honourable Sir Kier Starmer ... Is he that good at managing finances, create opportunities etc.?

[george stobbart] 27/6/2024 17:25

Vote the Rt Honourable Sir Kier Starmer.

He loves our country more than anything in his life and will guarantee massive gains for UK investors.

The UK stock market is a sleeping beast looking for an unprecedented rally if Sir Kier Starmer gets elected.

[crankylad] 27/6/2024 17:11

"tanked after Brexit."

In 2020 the markets tanked because of the disastrous lockdowns, Brexit had very little if anything to the drop in the markets!

[blueclyde] 27/6/2024 16:16

You have completely missed my point. Let me try and simply for you. Paying an 8% dividend by issuing new shares to pay is ponzi economics. It is even worse they issue the new shares therefore diluting the existing shareholders at such a huge discount to NAV.

[alotto] 26/6/2024 17:46

There must be a reason for assura to prefer this kind of payout

[goliard] 26/6/2024 17:12

Not just under the NAV but sometimes, or even often, under the actual price of the shares on the day they get to elect for the scrip. So you just sell the same amount of shares that you're receiving and make a profit which means the dividend yield can be significantly higher. It's no coincidence that the price tends to continue dropping after XD date by more than the dividend being paid.