Ediston Property Investm... Share Discussion Threads

[stemis] 08/9/2023 16:31

"If Shareholders subsequently approve the voluntary liquidation of the Company on or around 31 December 2023, the estimated amount per Share available for distribution to Shareholders in the liquidation (taking into account the estimated costs of liquidation, service provider termination costs and estimated net income in the period following Completion) is expected to be materially the same as the Estimated Net Assets per Share of 72.0 pence, unless and to the extent that any dividends are paid in the period between Completion and liquidation".

[spectoacc] 08/9/2023 16:30

Fair point re trading the REITs - trouble is, how many REIT punters are sat on losing positions having "traded" them by buying higher than now? Like any market timing, it works brilliantly until it doesn't. I'm seeing several getting endlessly "promoted" that IMO are fair value at best.

EPIC divis - my reading of it is that we get them in addition only until completion - so if completion is in a month (say), we'd get a single monthly divi, and the subsequent divis are deducted from the 72p (logically, since the earnings are no longer coming to the co).

What chance of them putting the £200m proceeds on an overnight rate?!

[chucko1] 08/9/2023 16:17

I write this in haste as I was on a plane when the RNS came out.

I like the deal.

And the reason why is that it seems that you will end up with 72p + 1.2p (roughly) in paid dividends. (I have to say that all that stuff about the final price being 72p - 3 x 0.417p made no sense. It is clearly stated that the dividends will continue to be paid and that the 72p is essentially a fixed number, if not exactly). Do correct me lest my haste has tripped me up on that, but ....

So in 3 months, you will earn 3.2p, representing an annualised return of some 17.5% approx. I like that.

My commentary, is however, based on the Bayes principal - i.e. I like it GIVEN THAT the management have proven themselves to be a bunch of useless f++++g w?????s. We should pray to our respective Gods that they did sell the offices - a great move - except that I now attribute that to a mixture of pure luck and likely alcohol.

@Specto, I do not entirely agree with you about the poor returns on REITs, notwithstanding the ample evidence supporting your position. Yes, in the UK, if you simply buy and hold, you would be better off doing something rather different. But if you are prepared to be fleet of foot and move in and out of these things as is sometimes bleeding obvious, they represent a fantastic tool for making a decent return. Although, I agree, that is not really what it says on the tin.

[tim 3] 08/9/2023 16:12

Sorry to hear the bad news.Was a firm believer in the power of dividend reinvestment but you really do have to look at capital as well so many high yield shares just burn up your capital.Have just sold out of hfel at a big loss for this reason.In the last few years my my capital growth investments by contrast have done really well.Will take a very close look at capital growth prospects in future before investing in high dividend stocks.Good luck all

[gonsan] 08/9/2023 16:10

underwhelming... not funnily enough my average price is 72p if I consider the reinvested dividends (as free) since I bought for the first time in May last year.
What a waste of time and money on a company that seemed solid and with a good strategy. Just nonsense.

[skyship] 08/9/2023 16:02

Hardly worth posting, but as the site host thought I'd better just endorse most of what has been said today.

A sell-out by the BoD; and really they should have rejected any offer at more than a 5% NAV discount, especially when you add back the value of their low coupon debt.

No point in holding on until December. IMO sell now and re-invest in EBOX for the 43% discount and secure 8.3% yield. If new to EBOX I strongly recommend over the weekend you view the Presentation in the EBOX Header.

GLA...

[spectoacc] 08/9/2023 15:47

Too true. Fat yields and gradually decreasing capital.

Most equities just adjusting for the end of ZIRP IMO, not sure anything's outstanding value yet, mainly because recession is likely ahead, and profit margins are currently still juiced.

[catabrit] 08/9/2023 15:43

Sums up *most* high yield income plays in the equities space. The promised capital growth is illusory. That said, I do think current high yields on some safer long-standing equities look particularly attractive right now. Feels like you could lock in an almost guaranteed 15% IRR on quite pessimistic assumptions.

[perfect choice] 08/9/2023 15:39

So applying the detail llef (1883) posted, waiting until liquidation will be equivalent to receiving 70.7499p per share (72p less 3 x 0.4167 for end Sept, Oct, Nov Divi's and assuming end Dec not paid as expected date of liquidation).

So a question of sell now for less and invest elsewhere which if paying dividends or capital gain, bridges the gap to 70.7499p or gain more?

Notice few buys going through still but not worth above 70.7499p (actually less accounting for buying costs as well). There have even been a few buys above that figure since the RNS was issued at 13:00 so guess they didn't know of the RNS as I make it they will not even recover their money and have just banked a loss.

Will take the weekend to consider options of either just stay and get the 72p (inc the 3 divi's) or sell and invest elsewhere, which will be the case anyway after the 31st December.

EPIC has given a decent return for me at least with a capital gain and good divi income. But would have been happier if sale was closer to NAV as of now as others have said.

[spectoacc] 08/9/2023 15:38

Sums up REITs doesn't it - 10 year returns on most will be somewhere between poor and worse.

But selling out at a discount to the already much-reduced NAV, and claiming to be delighted by the price, takes the biscuit. From the same management that bizarrely failed to invest the spare cash at even an overnight rate, and who originally firesold offices (fine), which they then completely failed to invest in RPs (which would still be worth more now than they cost then).

Good riddance to William Hill.

[topvest] 08/9/2023 15:28

A sad end to this REIT. Not a great deal, but I suspect we are all pleased to at least get 72p. Generated a good income over 10 years, but a 28% capital loss. Poor. Its all a bit gloomy in the markets.

[flyer61] 08/9/2023 15:25

ALL of the above :-(..

[spectoacc] 08/9/2023 15:14

As long as it's been GSF not GRID @Alan PT ;)

[nickrl] 08/9/2023 15:14

So ediston have earned a nice fee on all that cash for doing nought and the BoD didnt even have the savvy to have it earning interest until recently. The big shareholders should have been leaning on the board more. Also TRY picked up most of their holdings when share price was >72p so not sure what they are getting out of it other than their cash back. Had they left Calum to get on with it we would have been in a far better place.

[williamcooper104] 08/9/2023 15:13

Must look again at GSF - have a small holding

[alan pt] 08/9/2023 15:09

@wc104 I've been building a holding in GSF, overall the infra bargains look more interesting than the REITs to me currently

[riverman77] 08/9/2023 14:50

What an awful outcome. If they're not willing to pay NAV then just tell them to sod off and xarry on as before. No pressure to sell. I actually sold last week as was getting fed up waiting - didn't miss much!

[alan pt] 08/9/2023 14:45

Disgusted, but not surprised. Board doing the usual - "consulting" and "acting in the best interest" of only the big institutions

[williamcooper104] 08/9/2023 14:13

Indeed Spend the cash, asset management the portfolio and raise equity when the markets recover and they get a cheaper cost of equity, all funded with cheap fixed rate debt Good point on aviva - they couldn't have sold their stake without a big discount, so this suits them well

[llef] 08/9/2023 14:12

if completion is end sep, and liquidation happens end december, does the following mean that at end dec we would receive 72p-(3*.0.4167)? ( ie 72p minus oct,nov and dec divis).

"If Shareholders subsequently approve the voluntary liquidation of the Company on or around 31 December 2023, the estimated amount per Share available for distribution to Shareholders in the liquidation (taking into account the estimated costs of liquidation, service provider termination costs and estimated net income in the period following Completion) is expected to be materially the same as the Estimated Net Assets per Share of 72.0 pence, unless and to the extent that any dividends are paid in the period between Completion and liquidation."

[spectoacc] 08/9/2023 14:06

Thanks a bunch TRY. Yes, to sell their own 17% would have been a lower return than this, but for the rest of us, we wouldn't be invested if we weren't perfectly happy with a c.8%-yielding, cashed up (but sadly not cash-invested), RP specialist.


"William Hill, Chairman of the Company, commented: "The Board was very pleased with the interest shown in the Company, with proposals being received from a number of potential counterparties. Having considered multiple options, and after detailed analysis, the Board determined a sale of the Property Portfolio to Realty Income was the best means of maximising Shareholder value."


Seriously? Loads of interest, and very pleased to be selling at a chunky discount to an already-reduced NAV?

If they've known for this long that the portfolio isn't worth anything like what they've said, aren't they obliged to say?

One of their biggest arguments for liquidating is that the trust is sub-scale. I suggest anyone holding sub-£200m REITs consider that statement - AIRE, HCFT, etc. Not that I believe it.

Perhaps this will finally stop people using NAV as an investment argument - note also CTPT, CSH takeovers.


Edit - agreed @Wc104. Put the cash on deposit, cover the divi, keep paying it and keep the co going. Only sell out if the offer's knock-out, which has to be minimum of valuation ie NAV. And act in the interests of all shareholders, as the law dictates, not the whim of one who bought more than they could easily sell again.

[williamcooper104] 08/9/2023 14:05

Valuers and auditors now auditing values (they used to not do this) are a lot more conservative than used to be Intu used to have different valuers for their assets depending on who would give the highest value; value to order as was known It's a slow but not frozen market; and we weren't distressed, so no reason to take a materially below NAV offer

[williamcooper104] 08/9/2023 14:00

Not least as the aviva debt was well in the money; but can't be sold, a powerful argument to continue rather than sell out below NAV in a depressed market The red book NAV should be increased by the mark to market on the aviva debt - that's another c5-6p - so we are selling for 72p that which is worth c86p

[marktime1231] 08/9/2023 13:57

Drat. 72p is a 10% discount to NAV, and may be eroded a little by uncovered monthly dividends in the meantime. We defo get September and maybe Oct and Nov? Mind you a cash deal by year end is a good timetable.

TR and Aviva clearly in favour, they want their capital, and expect others feel the same. And we get to pay £3-4M of deal costs even if we vote it down, so why not just go with the flow versus the risks of trying to continue as before?

I am surprised this is such a weak deal given the discussions we have had here, Realty Income are getting a bargain, but after all these months of trying to find a better outcome there does not appear to be one. Oh well.

Put my holding up for sale at 71p.