Civitas Social Housing Share Discussion Threads

[spectoacc] 18/1/2023 15:05

Agred @LucyDeSouza, but - isn't much of that historic? Take HOME for eg - they massively enriched the SPV owners, some of whom didn't pass on the money for CapEx, some of whom were involved in the tenant charities (hence worth milking it/keeping it going for a couple of years, whilst the SPV is long since wound up with cash extracted).

However - what are HOME left with? Isn't it property that they paid £1 for, that's really worth 40p? In which case, does an eg 38p share price cover it?

That's what I'm struggling with, and with CSH/SOHO too. Is perfectly clear there's been significant funny business & cash extraction, but does the business model ultimately work, ie a lessee/charity providing beds that an LA/govnt pays for, and feeding that back as rent.

All the original capital providers are shafted, but what of shareholders buying now?

Or are the characters still involved just too dodgy to trust? It shouldn't ultimately be a complicated business, but no occupant of one of the homes is likely to be posting on here to tell us if it's working.

Again - I don't hold any of SOHO, HOME, or CSH, but have previously been in & out of the latter two.

[lucydesouza] 18/1/2023 14:59

The scheme: Flip the property into the REIT at a massive profit, round-trip some of the gains through the RPs as income. (RP stands for "regulated provider" but could also be "related party"). This is why so many of CSH's transactions are related party - they need to keep feeding their customers. Note: The Herleva Properties and CPI Care transactions in 2022FY (which represented half of CSH's acquisitions) effectively saw cash and/or an operating business taken over by customers of CSH. Herleva and CPI Care are part of the infamous Specialist Healthcare Operations structure. That structure includes TLC Care, which sublets some of the properties owned by CSH. In other words, the Herleva and CPI Care transactions effectively transferred value to customers of CSH, which in turn are controlled by Pridmore and his associates.

This game of musical chairs will eventually stop when the customers of CSH become unable to pay the rent. How long will that be? Have they fired five bullets, or six? :)

[spectoacc] 18/1/2023 11:52

@catch007 - agreed. Other than, if the co's (CSH, SOHO, HOME) all went bust, the properties would still be there. In fact, as owners only, the lessees and tenants would likely still be there too. Suspect we may yet get the proof of that with HOME, who are starting to look holed below the waterline.

The lessees are the unknown - some set up by the ITs - as is the CapEx or lack of it. I still don't see how a business model based on slowly rising govnt/council payments, but rapidly rising wages, CapEx costs, and particularly utilities, can also cope with rents linked to inflation. It didn't necessarily work even before power prices doubled.

What gives is surely staffing numbers (bad), heating (bad), & in particular, CapEx. But again, some of the charity/CIC lessees were going bust even before the increase in costs.

So what do we get with CSH, SOHO, or HOME. Money raised much higher, and spent on seemingly greatly over-priced property, in a ZIRP world where any index-linked return was highly sought-after. But s/p's now reflecting that, if the tenants are genuine, if the properties are maintained, if the lessees are well-run.

But index-linked? That I doubt.

There's something not right with the whole sector.

[williamcooper104] 18/1/2023 11:42

A pension fund won't touch this (Pension funds don't do take private acquisitions- it would be PE if it were to be taken private)

[catch007] 18/1/2023 11:32

The 'contagion' is actually the doubts and dark clouds across the whole sector now imho. Home appears to be a basket case and CSH was also recently subject to a shorting attack. It does appear CSH are being proactive to reassure investors, a prompt succinct response to alanpro1 is a good example as well as the steps taken re leases to satisfy regulators.

We can't see under the bonnet for CSH or Soho so I hold with a watching brief. I added recently to CSH holding circa 59/60p on dividend considerations. The over arching consideration in social sector is the desperate need for such services - where do people go if these services become unavailable?

[spectoacc] 18/1/2023 10:29

Thanks @alanpro1, tho not convinced about their belief in contagion not being justified - look at SOHO too.

[wskill] 18/1/2023 10:28

I am here for the divi spoole5 not thinking of any upward movement in the share price that is enough for me long may the divis continue.

[spoole5] 18/1/2023 10:25

Only way any value will be realised here is via a bid from a pension fund.

[wskill] 17/1/2023 15:41

Thanks for sharing alanpro1 happy holding my only 10% yield pity about the capital loss though but here for the long term .

[spoole5] 17/1/2023 13:25

Touching the lows today

[saltaire111] 12/1/2023 23:48

I agree with spoole re pension funds taking an interest. Why wouldn’t they when they have to try and match liabilities? Civitas at this valuation is a bit of a no-brainier.

[spectoacc] 10/1/2023 16:36

Thanks @debeege.

[debeege] 10/1/2023 16:14

CSH clearly state:

"The developer will initially be paid only the value that he has just incurred in purchasing the property plus a margin to cover his historic costs and an agreed transparent profit (usually c.15%) and monies relating to future works will not be paid until the works are completed and released against inspected delivery."

"This is a level of margin that is typically lower than is normally achieved by many residential developers and is part of the open book approach adopted by CSH to monitor and contain costs. "

HOME clearly overpaid with margins approaching 40%.

[spectoacc] 10/1/2023 15:23

Latest news on HOME today suggests maybe not, depending on if they have similar set-up:

[spoole5] 10/1/2023 15:15

This will end up being bought out by a pension fund

[giltedge1] 04/1/2023 15:25

Good start to year up 10% on my trade + 10% yield, giving my SIPP a boost can't complain so far. Yes there are doubts, but was priced in. Fitch gave a 'A' credit rating which was the confirmation for me to take a position. Good buying up to 70p.

[hindsight] 23/12/2022 14:20

Sorry posted wrong thread

[spoole5] 23/12/2022 12:44

I think the rent will be paid!

[wskill] 23/12/2022 10:02

Government now giving councils another £658 million for the homeless .

[lucydesouza] 20/12/2022 13:56

You want to know if I'm short? No, not currently.

[spoole5] 20/12/2022 12:26

Does anyone have any short positions to disclose?

[lucydesouza] 20/12/2022 11:11

It's an age old approach, when it comes to bagholders and apologists defending terrible companies: Claim that it's all in the past and then personally attack the critic.

The fact that Fairhome was financed by Civitas insiders via Beaufort has NOT previously been talked about in the press or anywhere else. The fact that Fairhome generated tens of millions of pounds of profit has not previously been talked about in the press or on these boards. The fact that AT LEAST half of CSH's 2022FY acquisitions involved related party transactions has not previously been talked about.

And by the way, the regulator publicly continues to investigate the various parties involved in this. It's not in the past.

In any case, just because something has been mentioned before, does not mean we can no longer talk about it.