That’s a link to your hard drive.. |
Not been forthcoming about this or it's effect on NAV |
made a maiden investment here today at.82p |
Maybe they transferred property/buildings to another group company which had more collateral or a lower loan to valuation level leaving basically group shell companies behind that were then dissolved. |
Jeff H - Thanks for that. I can see where you're coming from as CLS Scotland Limited for example would appear to be one of those companies as in April 2023 it was voluntarily wound up and then restored in July of the same year. However those that I am referring to, for example CLS Gresham Limited, have not previously had winding up proceedings started. |
..and we finish even lower |
 I think it refers to the below strathroyal:-
"In April 2023, CLS Holdings plc dissolved 8 subsidiaries (the 'Companies'). Before the Companies were dissolved, capital reductions and distributions of the net assets of the subsidiaries, primarily represented by inter-company receivables of £17.1m, to the Parent should have been executed. However, they were not. As a consequence of this, as a matter of Law, on dissolution of these Companies the technical titles to the inter-company receivables were transferred from the Group to the Crown.
The Directors have taken legal advice and started the process to restore these Companies. Thereafter, the Directors can execute the capital reductions and make appropriate distributions to the Parent of these Companies assets....."
So the companies did not own any of the properties but had transferred money to other of the group companies (hence the inter-company receivables mention)
The process of dissolving these subsidiaries was not carried out correctly and application to restore the companies back has subsequently been made and once again these subsidiaries have been dissolved.
I guess it makes it easier from an admin basis as I assume the subsidiaries were basically dormant, maybe owned buildings/property in the past but not now, so saves on admin, audit fee etc dissolving them.
The "appropriate distributions to the Parent" sounds like a dividend which will go to distributable reserves whereas Share Premium accounts are non-distributable although you can apply to the court to as presumably in this case to reduce them, so cancel/reduce Share Premium by say £15m and increase Reserves by a corresponding £15m |
Any company account experts on here? I see that a number of the subsidiary companies have reduced their share premium accounts last month (8 that I can see), is this likely to be connected with the properties they are selling or simply a book keeping exercise? |
THe assets are discounted by about 30%, which is hefty.
Student development sold for a good price but no one seems interested in buying their non redevelopment offices at or close to book. UK Vacancy very high aswell at almost 20% demonstrating the clear mismatch between supply and demand.
IMV the risk /reward here is very good. THis is not a basket case like Rgl as there are higher quality assets in London and major cities, with LTV under control. |
True, & they were buying heavily in the 120's. But they'd need that well behind them to be able to pitch a low-ball bid I think.
Not saying CLI's not good value, but there's plenty I'd prefer ahead of it. |
@specto dont disagree but here the family own so much that always remains a possibility at depressed prices they will take the remainder. |
Don't see the appeal of a heavily indebted office REIT when there's eg FGEN at 10% growing yield, or NESF at 12%, or SEIT's spread of investments at 11.7%. All at large discounts if NAV's your thing (40%, in SEIT's case).
Opportunity Cost, with often contracted revenues & guaranteed uplifts in the latter 3's case.
The economic outlook's changed, particularly regarding rates, & whilst it might change back, I want to be (securely) paid to wait. |
Comparable office reits have fallen further over 3mths
free stock charts from uk.advfn.com |
The 30YR Gilt is hitting 5% - unfortunately it makes sense for these types of stocks to sell off. I'm not hugely surprised. I bought a few more. |
Seems crazy, good times will return but how long will we have to wait? |
Unbelievable - now at a 9.3% yield! |
Gap from 01/05 at 83.6p which I hadn't spotted before topping up only a few hours ago at just over 87.50p. Ouch
Suspect that gap will be closed in this little downturn. |
Yep what a mess |
Unbelievable
Snakes and ladders months to go up days to revert to the start |
4+ month low @86p. |
Personally thought the update was disappointing as it again emphasised how badly senior management was caught out by the two recent office developments. The Artisan letting to MSF was included in the HY report so there haven't been any further lettings since, whilst The Coade doesn't even get a mention. I see that they have appealed against Tower Hamlets refusal to grant change of use for The Artisan, not sure how long these appeals take.
Looking at the proposed sales, and bearing in mind Berenberg's note (post 215) that 2nd half sales would exceed £160M, we have anticipated sales of £67.1M and therefore a further c£93M to come from the sale of the student property. As this was valued at £93.550M in the latest BS, and we were told that there was significant interest, a sale at that price would be disappointing. Alternatively, it could be that the other properties have been sold/ marketed below NAV and the shortfall covered by Spring Mews. We wait and see.
Finally I was interested in the comments regarding the Nomination committee as this is chaired by Anna Seeley (main shareholder via CVI). Whereas the Annual Report stated that, 'we are confident in our structure and operation of the Board together
with the balance of skills and experience of our directors in order to deliver on our strategy', they've now decided to pension one director off and appoint two new independent directors. Suggest we are likely to see more changes in due course. |
Indeed: Opportunity Cost. Is surprising how fast everything's fallen, on my watchlist that'd be eg FSFL, FGEN, SUPR, AGR, BSIF, TRIG, SEQI.. All similar charts, all presumably reacting badly to long-term interest rates. Not convinced the falls are justified, but I would say that. |
Vacancy level is a big drag and like RGL disposals slow to realise. I also detect a slowdown on getting debt refi done from their more bullish tone 6m back.Will get done but maybe not at such favourable rates.
Well below my 90 threshold but it’s now not the only one tripping the buy threshold making feel cautious about sentiment at the moment. |
"..We are experiencing longer decision timelines due to macro and political factors slowing progress."
"..Letting activity was slower than forecast. "
But I'd also pick out the 49.6% LTV, falling to 44.6% if they get all the disposals away.
In the price? Probably so. I prefer to spot the negatives tho. |
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