Capital & Regional Share Discussion Threads

[eigthwonder] 11/10/2023 10:58

CFO and CEO chose to fund tax liability of share option exercise (rather than the more usual “sell enough to cover the liability” route). Encouraging, although with the yield on the shares likely greater than their likely cost of funds, the most obvious thing to have done.

[netcurtains] 27/9/2023 07:36

ACQUISITION OF SHARES BY EMPLOYEE SHARE OWNERSHIP TRUST

Capital & Regional announces that the Capital & Regional plc Employee Share Ownership Trust (the "ESOT") acquired 750,000 ordinary shares of GBP0.10 each in the Company on the open market at a cost of GBP0.574 per share on 26 September 2023.

The shares are planned to be used to settle share awards that are due to vest over the coming months. The ESOT is not intending to make any further share purchases at this stage. Following the above purchase, the ESOT holds a total of 790,376 Ordinary Shares.

- ENDS -

I'm guessing it would not be a very good employee incentive scheme if they are expecting the share price to fall.

[2wild] 20/8/2023 23:43

Doubt many REIT investors Think property is a sure thing, with most on 25 to 40% discounts to NAV, with Several near 45% plus.

Just like in first few months of 2020, when you could buy REITs yielding 12% on 50% discounts, there will be big Winners and losers.

I picked up AEWU at 63p. Up over 50%, AIRE 43p up 40% and RGL at 65p, Down, 35%. Excluding dividends Over the last 3.5 years or so.

AEWU maintained. It's 2P quarterly dividend, paying out 28p in last 3 years 6 months
, giving a 100% return if you brought near the bottom.

[spectoacc] 16/8/2023 05:44

Have no doubt Growthpoint will take them eventually - question is, at what price. They'll own enough of decide themselves what that is, or they could go down the traditional delisting route, leaving you with shares in a co that doesn't trade.

Otherwise, agree it's interesting to see how zero rents are potentially a thing, simply to save the business rates/service charges. Too many REIT investors think property is a sure thing, but if/when recession comes, it'll quickly become apparent what a millstone unlet property can be (6 months rates relief for Industrial, only 3 months for Office/Retail).

[nickrl] 15/8/2023 17:55

@2wild if rents hold up at the Gyle looks a reasonable deal but that 12% looks best it might get. Morrisons and M&S don't pay rent only service charge but Next lease due up in less than 2 yrs and they wont stay unless they get a good deal based on what they've said in their results about lease costs going down significantly.

CAL have certainly turned themselves around but high LTV and retailing could easily go south. They've already warned that Wilko has potential to lose 0.65m rent but even worse will add 0.9m to costs so shows you how important it is to keep tenants.

My view is they need to sell Snozone so they can offload more debt. They also are losing the two mandates at Redditch and Luton so another 1.2m thats helping cover the overheads.

Anyhow share raise fully underwritten with loan at competitive IR in current environment and looks like its coming from the current owners of the centre so acquisition a done deal. So getting tempted here as there must be a possibility of Growthpoint taking them out at some point.

[2wild] 15/8/2023 12:03

Interim dividend Increased by 10% to 2.75p. Assume another 2.75p Final gives a 10% yield at 55P.

Buying shopping centre in Edinburgh for £40 million. Financed by £16M, 40% LTV loan, fixed at 6.5% for 5 years Plus a 25 million pounds 4 for 15 open offer at 54p. Yield on the shopping centre 12%.

[nickrl] 02/3/2023 10:37

FY22 results out this morning and with the final divi puts these on yield of just shy of 9%. Certainly they are in far better shape than they were and LTV now down to 41% allowing for the surplus cash some of which is trapped in specific loans. Got most of it on fixed rates for a few years although even though its small don't get why they don't ditch the 4m that's on SONIA +5.95%!! Been lot going over last couple of years to get your head around all the numbers to see where this is going. Certainly rental income looks like its stabilised and has some growth potential on on new lets/renewals although an always suspicious about ERV forecasts being realised. They are going to lose the mgt fees they get for looking after Luton & Redditch once they are sold which is 3m plus also part subsidises mgt o/hs. However interest charges will be down a few million so looks like the divi can be sustained at these levels but in the long run when they need refi things will get a lot tighter.

With Growthpoint being so dominant here must be a possibility that if things are looking up they take it out completely.

[nickrl] 07/12/2022 17:38

Still haven't shifted Luton or Redditch, which i know now sit off the balance sheet, but they earn few quid on fees (1m pa) which they may lose and won't receive any cash from a sale. They are alive to it but would be another prop from under the dividend although at least no debt worries till March 24.
Divi too low and not very liquid.

[rambutan2] 07/12/2022 14:53

Yes, made me (chuckle) to.

The likes of Wood Green are pretty bottom end on the spending front and imho will continue to tick over barring an outbreak of mass unemployment circa 1980s. The key is to keep the shopping centre looking respectable, not full of vacancies, and therefore a doable destination for the area. From what I see they are achieving that at the moment, certainly more so than was the case a few year's ago.

[spectoacc] 07/12/2022 14:37

Not seeing much bad in that, albeit I sold out lower than here in the September rout.

If the world keeps turning, CAL surely has some value. "...Assume(ing) that we do not see a further meaningful shift in the economic climate.." made me chuckle tho.

[rambutan2] 07/12/2022 14:12

Progressing. Wood Green has certainly seemed fairly busy since the summer, although not sure where things stand with the Cineworld:

Update on Trading and Property Portfolio

Capital & Regional, the UK convenience and community focused shopping centre REIT, will host a tour of its 17&Central shopping centre at Walthamstow at 2.30pm today. During the event, the Company will provide the following operational update .

-- Footfall in the five months to the end of November 2022 footfall was 11% ahead of 2021 and represented 90% of the equivalent period for 2019 representing one of the strongest periods on a relative basis since the start of the pandemic.

-- In the five months to the end of November 2022, Capital & Regional completed 42 new lettings and renewals for a combined rent of GBP2.1 million, ahead of previous rent and ERV. Key lettings in the period include agreeing to extend the NHS diagnostics centre at Wood Green by a further 6,000 sq ft and the letting of the new Walthamstow Food Market to local operator Crate.

-- Occupancy across the Group's Investment Assets has improved to 94.6% at 30 November 2022 from 93.8% at 30 June 2022. The main driver for the increase is the inclusion of the NHS medical centre at Ilford which is now in development following receipt of planning permission in October 2022.

-- Rent collection is now nearing pre-Covid levels with 95.9% of the quarterly rent due on 29 September 2022 and 97.0%(2) of the rent due for the year to date received.

[nickrl] 30/9/2022 18:11

CAL needs a bit of unpicking as it was structured with assets within SPVs they controlled or SPVs that were under water and effectively off the balance sheet and with lenders.

The biggest debt is over the Malls that they are retaining and these have just over 4 years to run with the lender til Jan 27 with the following statement on covenants

"lender provided covenant waivers that run until November 2023 and modifications to cash trap provisions that run until May 2023"

this suggests to me that whatever the covenants are they are breached? but as @huge says they are coy about declaring them for whatever reason. The LTV was c50% at HY but post HY they sold on two assets and thats lowered LTV to 40%. You have to give CAL some credit for the way they've managed to buy back debt below par on several occasions and got debt down from over 70% LTV.

The other loan is on Ilford which is due refinance Mar 24 but has the potential to extend to Sept 25.

One thing to watch is they have management income from the Luton asset which is up for sale and new owners may ditch them of course may crimp ability to improve dividend. Of course there is always the possibility that Growthpoint will buy it all up now the restructuring is largely complete.

Edit: looked at the HY presentation and on slide 15 there is a table that says LTV covenant is 70% on Mall/Ilford assets whether thats the waiver level or not isn't clear but LTV of those assets are below the threshold. The fact that cash is trapped in the facilities suggests to me an indication that some element of the covenants is breached.

[spectoacc] 30/9/2022 15:40

Thanks @HP, must admit I've not looked, been in CAL from higher & thought "Growthpoint will cover it if there's another capital raise needed". However, with the way the markets are, wondering how quickly that might happen.

I still think it's a good punt, well off the radar of most and with a supportive major shareholder. But think we have to look through to the end of the impending downturn to see CAL come through.

[hugepants] 30/9/2022 15:35

spec, Very vague re covenant cover and no mention of headroom on the covenants I can see.

[spectoacc] 30/9/2022 15:15

Thanks @HP. far more important than the interest rate or duration - what are the debt covenants like? Agree re risky end - if values fell not very much, that LTV surely risks breaking bank covenants?

But am also a holder.

[hugepants] 30/9/2022 15:04

I topped up here on the fall to 50p. 10% yield, 57% discount to NTA and 40% LTV. Definitely at the riskier end of the REIT spectrum but its a positive Growthpoint are taking shares instead of cash for their dividend.
The shopping centres appear well let and favourably located and I think this sector may outperform going forwards.

Re interest rates, "Debt maturity of 4.1 years with average cost of debt of 3.54% with 98% fixed."

[nickrl] 15/8/2022 22:13

rambutan that interesting on Growthpoint as they are big chunk of the register so saves a fair amount of cash in the short term. Surprised gp haven't just bought this one out

[rambutan2] 15/8/2022 20:47

Re the div, forgot to mention the important fact that both Growthpoint (and the board) are taking scrip, not cash.

htt ps://growthpoint.co.za

[rambutan2] 15/8/2022 14:38

Here we go. In the classic estate agents/developers way, they try to call it everything but Wood Green ie posher Ally Pally and Hornsey, but it is within 100m of the back of the Mall.

[spectoacc] 15/8/2022 14:37

Thanks @rambutan2, good to know.

[rambutan2] 15/8/2022 14:31

Yes, a turnaround.
In the webcast the FD said that they should be able to repeat the 2.5p for the finals.
Currently approx 30% of nav is on leases which are to some degree inflation linked.
Very little on turnover based leases.
Are hoping that recession doesn't hit them too hard as mainly at the low cost/essentials end of the mkt.
All in all, quite upbeat.

I would add, that as a long time Wood Green resident, the much maligned Mall is looking in slightly better shape these days. And certainly much better than the nadir of a few year's ago. And WG itself is moving up in the world - more middle class types. There is a big housing development just behind the Mall, and other bits and pieces of building in the area. My non expert view would be that one way or another, there is potential for the value of the Mall to rise over the the next few years.

[nickrl] 11/8/2022 08:49

Specto to be fair to them they've transformed the business over the last 12mths from what looked liked worthless assets being overwhelmed by so much debt. The deals they've done buying off the debt at well below par has to be applauded. Be interesting to know who the lender was for Hemel who has forgone 50% of the debt just to get the loan off its book. They will be paying off the 6%+SONIA facility following receipt of sales proceeds from Blackburn/Walthamstow and LTV will be down to c40%.
Div also restored and if they can repeat 2.5p at finals that puts them on a 7.5% yield although with loss of Blackburn income and even reduced interest costs not sure that achievable but they are back in the game.

[spectoacc] 11/8/2022 08:18

Too overweight small REITs to add more, but CAL do seem to be pulling through IMO. Not sure that NAV rise isn't more due to a technicality (property held for sale) but the LTV seems genuinely manageable without further dilution now.

Just in time.

[nickrl] 25/4/2022 17:50

Not sure how a company that has lost so much value has the temerity to award its CEO 937,857 and CFO 513,217 shares under its 2021 bonus scheme!

Not one for me.

[nickrl] 08/3/2022 10:46

Had a watch of the presentation on FY results which was actually with an audience (makes a change) of 10-15 presumably analysts.

Headlines NAV down to 102 from 150p partly from capital raise. I like the way that once they've offloaded the non performing Hemel and Luton centres NAV increases to 114p. They say as in SPVs they aren't liable for losses. So would be discount at 50-50%.

LTV now down to manageable 49% and forecast down to 46% shortly once Walthamstow development sold on.

No FY divi but say they will declare a divi at half year although no forecast given but looks like it had c10m of FCF at FY although CEX talked about quite a few mil needed for CAPEX projects and ESG stuff. Need to delve into it more but a few pence would be worthwhile at current share price although how sustainable it would be given discretionary spending is going to get hammered over next 12mths not so sure.

By the way im not in here (yet) and I do wonder why Growthpoint don't just take it out especially as they fully subscribed to the capital raise last year. Also not a lot of shares traded so not an easy one to get into or out of.

Also i don't want to brag but i asked the only other question (how much rent free for new leases - CEX answers oh we don't do that much and then finished by saying to CFO its around 6 months isn't it!!) so if they were analysts guess they were only there for a free coffee and an opportunity to get out of wfh!