Ediston Property Investm... Share Discussion Threads

[chucko1] 22/3/2023 16:15

Uh?? 0.7%?? Surplus cash is one thing, but EPIC have a known reinvestable amount. One can buy very short Gilts and get 3.95%. A daily MM fund yield 3.96% and the size of this fund is £40bn (Blackrock). To be clear, it has DAILY liquidity.

If they can buy properties yielding 7%, I certainly expect this management to be able to invest cash professionally.

Even 2.5% on their 80mn cash will cover the dividend deficit.

... and I add: over what period of time did CTPT obtain a mere 0.7%? - if during last year, that was because rates averaged not much more!

[nickrl] 22/3/2023 15:59

Also done see whether we all get a standard reply.

re chucko #1535 CTPT are making c0.7% on their 30m and with a charity business account i oversee through Barclays we get nothing like SONIA on surplus cash so id be surprised that they can get 4% but maybe they should invest half of it in some short term instrument whilst this review plods along.

[alan pt] 22/3/2023 15:35

Also done so, their mailbox will be busy :)

[skyship] 22/3/2023 15:19

Wc - good to read that you too will email them. The more the merrier...

[williamcooper104] 22/3/2023 14:20

As an example - Land securities spent 2 years on a failed de-merger Francis Salway - then CEO - called the top of the market exactly right in late 2006 (can remember him telling me at the time about how the then market was distressed - as in full of distressed purchasers) - but didn't do anywhere enough de-leveraging as all focus was then on the de-merger

[williamcooper104] 22/3/2023 14:17

And if you are going to sell up then 1 - buy assets over next 6 months 2 - asset manage aggressively 3 - uncover future asset management upsides - eg - spend preliminary consulting fees 4 - prepare a comprehensive vendor due diligence package 5 - sell in 6-18 months time when the markets a bit better than today All of that could IMO get us to >90p (plus divi while wait)

[williamcooper104] 22/3/2023 14:13

Thanks - will email similar throughts

[williamcooper104] 22/3/2023 14:12

And vol liquidation best effected by a single portfolio deal Agree - either do that or forget about it and get on with executing the business plan Don't spend 18 months in analysis paralysis while the property market reprices and rates fall - that's how you'd get a divi cut

[chucko1] 22/3/2023 14:05

Utter rubbish - of course they need not cut. What is more, they clearly have never needed to. Not even close.

The period of non-investment caused the dividend to be uncovered. However, they saved a massive amount on this delay - is this not related to the skill of the managers? This has important long term implications.

Further, the cash balance is now inevitable at 4% or so - clearly sufficient to make up the degree of "uncoveredness" of the dividend.

This is so basic.

[skyship] 22/3/2023 13:49

If you feel strongly about your investment here, EMAIL the Chairman, William Hill. Do stress the Review should have both a cost and a time cap.

[e-mail]

or

[e-mail]

A bit of a holding reply; but at least I stated my case and received a reply:

Dear Mr xxxxx

Thank you very much for your email of 20th March and taking the trouble to contact me. It is much appreciated as we are very keen to hear from as many of the Company’s investors as possible. I can therefore assure you that your comments will be shared with Board and be fed into our considerations.

Please do not hesitate to keep in touch.

Kind regards

William

[skyship] 22/3/2023 13:40

marktime

You recently posted: "Reinvested again here today, on the premise that cash assets on a reduced management fee and earning interest will reduce the shortfall in income and sustain the dividend."

So why do you now believe the dividend should be slashed 20%/30% when the divi is 85% covered and the Annual Statement made in Dec'22 stated:

---------------------

DIVIDS

In my report last year, I stated the Board's commitment to a covered dividend and the prospect of further dividend progress as contracted rental income continued to improve. I also highlighted that the likely mismatch between sales and reinvestment could lead to a period of uncovered dividends and that,if prudent to do so, the shortfall would be made up from reserves.

Delaying the reinvestment of capital from the sales has meant the period of uncovered dividend has become longer than was anticipated. The Board believes the way the Company has responded to the changed market conditions is both responsible and appropriate. The Company is well funded to continue to pay the current monthly dividend. It is the intention of the Board to maintain the dividend at 5.0 pence per share. The expectation remains that when the available capital is invested the dividend will be covered.
-----------------------

Seems quite clear to me that following that statement there is absolutely no way they can subsequently cut.

There is also no way that this Review (an expensive waste of time IMO) will result in a merger. There are only two logical outcomes:

# Voluntary liquidation
# Status quo

[nickrl] 22/3/2023 13:35

EPIC need c £2m extra rent to cover the current divi which should be easily achievable from the current war chest. Furthermore given how little interest income CTPT have achieved on their 30m EPICs cash pile is going to fall well short to deliver that.

On valuations the market has effectively been trashed but still Edison can't find anything to invest in or were they still sitting on the sidelines before this strategic review started. The RNS fails to reveal what input Edison had here.

[fordtin] 22/3/2023 12:57

o/t

Hi Skinny - spam's been added to the next shopping order, but they're showing eggs as 'out of stock' 😕

[skinny] 22/3/2023 12:37

Pragmatic!

[fordtin] 22/3/2023 12:32

Yep, in hindsight reducing the dividend last year could've been financially better for me.
It would've led to me selling my EPIC shares and moving on to a hopefully more reliable yield at a time when EPIC's share price was around 80p.

However, in the current market, it seems likely the new home for my funds would've fallen in value just as much, so the increase in dividends achieved by the move might've been the only advantage gained.

[marktime1231] 22/3/2023 12:20

The more this unfolds the more it looks like Investec pressed for this "strategic review" themselves, they are still trying to buy up the share price. A process probably triggered by EPICs lenders because they consider gearing to be at the max, and will not be releasing conditional funds. Actually if I were EPICs lenders I would be unhappy maintaining an uncovered dividend, eroding cash and NAV slightly.

Meanwhile the market backdrop for all forms of commercial property is weak. This is not a good time to be selling off assets. All while EPIC is being restrained from making reinvestments which were heralded blimey is it nearly two years now.

So the board has challenged Investec to put up or shut up, and it is backfiring on Investec because they are the only ones who think the share price can be talked up, the discount to NAV has not been closed by the prospect of a sale or merger. The chance of a major investor or outsider with deep pockets swooping in with an attractive offer appears to be slim.

If I am reading this right the likely outcome will be a sp-neutral eg discounted merger with a larger REIT, or EPIC will limp along on its own, but in either case there will be a reset of the current dividend by around 20-30%.

The alternative of selling off individual assets over a period of wind-down remains, messy but it would recover capital to suit the banks and traders.

As a disappointed income investor neither oucome is good, but I suspect if the board had been brave enough to reset the dividend to 4p, just for the time being, last year we would not be at this juncture.

[alan pt] 21/3/2023 13:37

SUPR+EPIC would actually be a decent fit, can't see it happening though

[flyer61] 21/3/2023 06:48

Thanks Rambuten2, of course it is actually a potential takeover situation after all.

[riverman77] 20/3/2023 23:39

PCTN might be the obvious candidate given it's a fairly large holding for TRY and could actually move the dial. CTPT another possibility although not sure if conflicts of interest there as the same fund manager. Most of the others too specialist and EPIC wouldn't be good fit.

[rambutan2] 20/3/2023 23:16

Flyer61, under the City Code all holders of 1% + have to reveal themselves and any subsequent dealings they do. Always interesting to see the under 3%ers.

[fordtin] 20/3/2023 10:07

If TRY are encouraging a merger, perhaps there's a clue as to who their preferred candidates are, in their list of investments?



Investment portfolio by country as at 30 September 2022
 
 




 
 
 


 
 
 


United Kingdom
 
 


 
 
 


Market value
£'000
% of total investments


 
 
 


Segro
51,869
5.3


Picton Property Income
37,278
3.8


Phoenix Spree Deutschland
35,646
3.7


Safestore Holdings
32,424
3.3


Industrials REIT
31,101
3.2


LandSec
23,687
2.4


Ediston Property
21,015
2.2


Londonmetric Property
19,945
2.0


Derwent London
17,314
1.8


Sirius Real Estate
14,451
1.5


Unite Group
13,617
1.4


CTPT
9,566
1.0


Workspace Group
9,227
1.0


Tritax Big Box REIT
5,260
0.5


Primary Health Properties
2,979
0.3


Atrato
2,573
0.3


Target Healthcare
1,835
0.2


Supermarket Income REIT
1,760
0.2


Helical.
1,670
0.2


CLS Holdings
1,546
0.2


Capital & Regional
966
0.1


 
 
 



335,729
34.6


 
 
 


Https://www.trproperty.com/wp-content/uploads/TRPIT_IR_2022.pdf
 
 


 
 

[flyer61] 20/3/2023 09:05

Bought more this morning. Any explanation for all the RNS's on Friday afternoon. Is it signalling of other institutions showing there stakes albeit they are not actually required to?

[nickrl] 20/3/2023 08:38

@spoole mkt a bit spooked over last few days and EPIC just catching up with late last week sell off