Ediston Property Investm... Share Discussion Threads

[spoole5] 23/7/2022 12:52

What's the cash level now?

[nickrl] 23/7/2022 09:13

ammons doubt they will cut but they have clearly warned on several occasions that it won't be going up until they reinvest the cash. What certainly needs to happen is inv mgr should not be earning a fee, even a reduced one, on this level of cash. Unlikely i know but it ought to be capped.

[kenmitch] 22/7/2022 17:39

Mostly agree SpectoAcc and chucko, except that if the likes of EPIC have spare cash I much prefer it to go on a special dividend where investors actually get real money than on buybacks.

I bought my Commercial Property REIT portfolio in mid 2020 when the Property Unit Trusts (which imo are an awful way to invest in Property) were locking their investors in, and for over a year with at least one of them. At that time discounts on the (much better way to invest in Commercial Property) Investment Trusts went to exceptional discounts and dividends were as high as 13% (e.g AEWU who managed to maintain that fabulous dividend).

e.g I bought SERE (few if any buybacks) at 70p then. They’ve paid 20p in dividends including specials since then. That’s nearly 30% of the stake back already.

I also bought SREI for 35p. They’ve gone for buybacks and no specials. SREI have paid 5.2p in dividends so far. That’s about 15% of the stake back.

Note this though. SERE discount and (I think) no buybacks is 21%, but SREI discount is a huge 33% DESPITE significant buybacks.

A buyback that was effective was Riverstone Energy when discount was around 50%. The share soon bounced significantly.

[fordtin] 22/7/2022 15:50

ammons - re #1220 "...What are the thoughts on that - a divi cut?..."

I guess it depends on how many dividend chasers go asap for the exit.

If I managed to get out before the crowd, I’d move on and only look again if the share price falls enough to restore the yield.

If I’m late for the door and the share price drops enough to restore the yield, I might be tempted to buy more because the increased discount to nav could prove too hard to resist.

[spoole5] 22/7/2022 15:47

Can we please stop discussing the yield, I got it wrong!!

[ammons] 22/7/2022 15:28

6.9% or 7.2% or whatever the hell it is, monthly, will do nicely for a fat old pensioner like me!! I have previously held these but sold around 83p and looking at that juicy monthly divi again - as long as the chances of a cut are low.

What are the thoughts on that - a divi cut? I read on here that the divi is or might be uncovered?

[fordtin] 22/7/2022 14:01

Only just read today’s posts, so apologies to anyone who thought the 7.2% debate was over.

Taking current share price as constant over a year and re-investing the monthly dividends, I came up with 7.09% compound yield (excluding broker costs).

If you re-invest your divs and are comparing the yield of 12 divs per year with 2 divs per year or 4 divs per year, this may be of significance.

[chucko1] 22/7/2022 12:47

The debate about buybacks is not, by any means, a settled debate. If for no other reason that parameters such as the discount and available assets to buy complicate this. But there is somewhat more - what about the liquidity of the intended bought investment and the horizon over which such investment can be expected to provide a certain return?

The issue about the discount contracting upon buyback, only to widen again is fair. However, that does not mean that longer term value is not both enhanced and preserved (though this as well depends upon the cost-base of the issuer etc. and the debt structure, perhaps). Again, it depends upon an investor's time horizon - something which not just amateur investors often struggle with, but professional investors as well.

It is certainly worth investigating the motivation of the management of a trading, financial or industrial firm who engage in buy-backs, for sure. And perhaps the investment management of an IT, except, I would argue, to a far lesser extent. The degrees of freedom of the latter are far fewer by comparison.

So often - and over many years - I read on these boards criticism of IT management, and historically it has been a large multiple of what was actually fair. And also, this unnecessary scepticism (cynicism, often) will have cost these so-called investors plenty.

[spectoacc] 22/7/2022 12:36

@kenmitch - I'm generally against buy backs. They tend to enrich the managers (particularly those with EPS targets, or with large share options), don't necessarily return cash in an equitable way like eg a dividend which everyone receives, and are too often done at the top of the market.

However, where REITs are concerned, the large discounts to NAV often make them a nobrainer. Yes, that only applies if there's a dearth of investment opportunities, or (as now) the property market has been on a tear. Had EPIC bought retail parks last year when they first mooted it, even if it had temporarily increased gearing, it would have made sense.

I don't see better value retail parks than buying the discounted version at EPIC. Fund flows have returned at property Unit Trusts (so no longer forced sellers), & other REITs have been getting in on the Retail Park sector.

Yes, EPIC's size means you could question whether they should be shrinking (tho look at eg VIP's buybacks), and yes, you could argue a dividend or more tax-efficient capital return makes more sense than buy backs, which rely on finding enough sellers at a low enough price.

I've been on EPIC's case since late last year & will continue to be. Currently waiting for a call back from the co.

(Yes, buy backs aren't always a panacea to share price weakness, but it isn't necessarily the point. Efficient use of capital & long term gain is).

[kenmitch] 22/7/2022 12:23

SpectoAcc.

I really rate your posts, but also think you should accept that there’s a very strong case against buybacks as well. It’s a controversial subject and people have strong views about them. It’s the assumption that buybacks are good without ever being prepared to at least acknowledge that they might not be that grates.

There are occasions when buybacks can be justified, but generally I much prefer the Investment Trusts and shares I invest in to invest spare money in the business ahead of artificial means to try and often fail, to increase the share price, or with Investment Trusts to reduce the discount.

Those who will not have a word said against Investment Trust buybacks don’t even seem to notice that often the discount does narrow while buybacks are being undertaken but then widen again, and sometimes wider than before the buybacks, when the buyback programme has completed.

More and more Trusts are realising this now and so are resisting pressure from investors to go for buybacks.

Best to have an open mind!

[marktime1231] 22/7/2022 11:47

We had this exact same debate back in April, for the umpteenth time, and here you are again.

Filtered.

[spectoacc] 22/7/2022 11:44

I've been a shareholder, and keep it on my watchlist to get back in at some point. As I've been saying since last year, that depends on how they deploy the sale proceeds. Which they still haven't.

Disappointed you'd have a reaction like that, but then you've clearly made no effort to understand the merits of a buy back, nor spoken to the company yourself.

Most of us can see beyond the end of our own noses, and research/understand companies we may not currently be invested in.

[marktime1231] 22/7/2022 11:35

As you are not a shareholder why are you still here year after year banging away at the drum about buybacks when it is not a good option for all the reasons which have been explained time and again. And it is none of your business, something which I am sure IR at EPIC would explain to you politely!

I normally reserve the filter button for people who are offensive and use foul language but I am ready to make an exception in your case. You are entitled to a different point of view but this has gone beyond joking.

[spectoacc] 22/7/2022 11:26

Not a holder, but if I was, I'd definitely want to speak to them. I'd love to know what retail park purchases would be better value than their own shares.

[marktime1231] 22/7/2022 11:10

I have been wondering what is holding EPIC back reinvesting proceeds of office sales etc. Could it be something other than difficulty finding an attractive target?

In the detail of the half-way report in May EPIC stated that re-investment (other than cash at bank obviously) was subject to meeting LTV or gearing requirements. Could that be a stumbling block? Elsewhere it says it meets all its ongoing debt servicing and loan covenants, but re-borrowing the money which was repaid into its credit facility may have hit a snag?

The continuing drag on income probably means we will not get the dividend uprated to 5.5p from September, promised confidently going back a year and one of the reasons I doubled up. A prospect which remained on the cards until EPICs Chairman said in May it would not be prudent until sales proceeds were reinvested.

Still content that EPIC is otherwise in good shape though. If the share price does sink back in to the high 60's it would be tempting to top up, when it would indeed be a yield of 7.2% and paid monthly.

[cwa1] 22/7/2022 10:25

LOL, me neither! Time to all shake hands and move on I hope ;-)

[spoole5] 22/7/2022 10:13

Sorry got it wrong, didn't mean to start an argument!

[chucko1] 22/7/2022 10:03

5p/73p = 6.85%

Closish to 7.2%, I suppose. Is it the accuracy which has peeved these (at least) two people?

[cwa1] 22/7/2022 10:01

I really was referring to the fact it sounded unecessarily dismissive of spoole5 without backing up what YOU thought it was.

FWIW I make the annual dividend 5p like yourself and at the current mid-price of 72.8p, is a yield a shade under 6.9%-not a MILLION miles from spoole5's 7.2%. It's entirely possible that spoole5 bough it cheaper than that on an intra day wobble, or got some on the book cheaper. So it doesn't sound outrageously far out to me...

PS I didn't downtick you ;-)

[brwo349] 22/7/2022 09:47

I've already had 2 downticks so I must be wrong but I'm trying to get spoole's 7.2% based on the share price and the 5p annual dividend and I can't do it. Why don't you explain what you think the yield is cwa1?

[cwa1] 22/7/2022 09:42

Perhaps you could explain what you think it might be then brwo349

[brwo349] 22/7/2022 09:37

I don't think you know how yield is calculated if you think it is 7.2%

[spoole5] 22/7/2022 09:14

Just topped up fwiw, 7.2% yield now although unlikely to increase for a while.

[hindsight] 20/7/2022 09:47

Thx for heads up nickrl
Have posted below, DFS maybe questionable but when leases expire all property comes to same value point ie location and age decide rents. Anyone know these locations ?

The Company has acquired two retail warehouses in Measham, Leicestershire, and Droitwich, Worcestershire, occupying an aggregate 40,077 sq ft. The units are both let to DFS Furniture with a weighted average unexpired term to first break or expiry of 8.0 years and an aggregate passing rent of GBP894,103 per annum, reflecting a net initial yield1 of 9.43%.

[nickrl] 20/7/2022 09:25

I see CREI have picked up a couple of DFS retail wharehouses on a 9.43% yield not that i would want to have that company in this portfolio.