European Real E Share Discussion Threads

[nicholasblake] 07/6/2017 16:24

My read, given no commitment to return capital post Nice but pre consultation period completion, is that the current plan is change of objective OR return of capital. Of course, nothing will be set in stone yet, despite Telegraph article where Quidnet acting as if were a done deal.

[zangdook] 06/6/2017 06:08

It depends how much they're planning to distribute. If they give us back 99%+ of the cash and then use the company as a shell to raise new money, I'm ok with that. If they want to hold on to our cash in order to keep their jobs, then no. Not ok with that.

We could really do with more clarity on this.

[flyfisher] 11/4/2017 10:22

NAV at year end, less opex to june at which point la gaude sale will complete, less schroders base management fee to year end along with wind down costs for the ten subsidiaries give a final return of 137p plus any return from the french tax issue.

This was listed at £6.75 in 2007, what a dire performance.

With regard to the tax issue, this is an extract from the prospectus.

Historically, the Group has benefited from an exemption from an annual tax of 3 per cent of the market value of its real estate assets in France or rights over such assets held at 1 January of each year. As a Guernsey company, the Company must qualify for a different exemption to avoid being subject to such tax. The Company has been advised that, based on the understanding of current French tax law and practice of the Company’s advisers, it has been and should be exempt from such tax as a vehicle listed on a recognised European stock exchange. Any subsidiary holding French real estate and companies in the chain of ownership above such subsidiary must comply with certain filing requirements to avoid the French 3 per cent tax. In addition, the applicability of trade tax in Germany to the Company’s German subsidiaries and the properties held by them is subject to review by Germany tax authorities.

[n1mgn] 11/4/2017 09:50

ok thanks

we will soon find out i guess

all the best

[nicholasblake] 11/4/2017 09:44

If the disposal is on usual commercial terms the €5.75m is before ERRT's own occupancy costs -- rates/security/insurance,etc.. Admin expenses £2m in 2017. Schroders down to £100k in H1. Legal/accountancy/tax/board/other the rest.

[n1mgn] 11/4/2017 09:06

thanks , how did you come to that burn rate ?

from what i see la guade had running costs of 700k pa , that would have been factored in to the sale price , ie sold Net of all costs .

so 13.9 as end of DEc including sale but NOT tax added .

15p * 7.7 mill shares over 1 million loss on NAV , i cant see how that works ?

thx you

[nicholasblake] 11/4/2017 08:34

Cash burn rate 15p per half, so 179p NAV now is 165p by 30 June.

[n1mgn] 11/4/2017 07:36

Hi all can someone check this for me please .From the financials we have 13.9 gbp .7.7 million shares so Nav 180 ? Plus potential 2.2 mill euros tax rebate . ??I am guessing the majority of cash will be in and distributed pretty soon , so still a good 5% upside without tax ?? Thank u , it just looks like a very low risk trade v reward if we can pick them up 165 ish

[nicholasblake] 06/4/2017 12:25

The £9.1m was for net assets at the time of the interims being approved in August. By 30 June this is likely to be more like EURO9.1m. So adjusted NAV more like £1.64 at 1.17. Prelims ought to be out any day, so position will be clearer.

[eezymunny] 06/4/2017 08:38

Thanks Papy.

[papy02] 06/4/2017 08:34

EM,

re Schroders, it is in the Half Year report linked to from the RNS dated 22 Aug 2016.
(see Note 13 to the accounts)

The Investment Manager is entitled to a base management fee of £0.4 million per annum, reducing to £0.2 million from 9 October 2016. The Investment Manager is also entitled to 15% of the gross sales price received by the Group for any sale of its Nice asset which exceeds the valuation as at 30 June 2014.

[eezymunny] 06/4/2017 08:21

Tx Flyfisher. I missed that - where did you get it from? Don't remember where I got my Schroders numbers from.

All a bit of a shame as I reckon the land alone at la Gaude is worth £20m were the council to play ball and allow redevelopment. Suspect the buyer will do very nicely thank you!

[flyfisher] 05/4/2017 19:33

Schroders are appointed to the end of 2017 at £200k pa base management fee plus commission.

[eezymunny] 05/4/2017 19:19

I have a note that Schroders were on 0.25% + 15% above book value, so not much, and the E5.75m was net of expenses so maybe Sdr's fee already factored.

DYOR!

[zangdook] 05/4/2017 17:23

Thanks for that Eez. My quick back of the cornflake packet calculation after I saw the news, in between banging my head on the table because my computer is too slow, was 175 give or take 25.

If it's around there I'll be able to buy a new computer with the profits.

I seem to remember a few years ago they kept recruiting new advisors and promising them large cuts. Is that ongoing? I hope it isn't going to come back and bite us now.

[spob] 05/4/2017 17:12

my back of envelope calcs said not much upside

and best to be conservative in these situations

[eezymunny] 05/4/2017 16:06

I make it 7,735,321 shares after last redemption, so market cap at 155p is c. £12m.



Last update said they had £9.1m cash after netting off liabs. Exch rates haven't moved much since then and a fair bit was sterling anyway.

So add £5m for La Gaude sale gives c. £14.1m

A bullish case gives c. £1.8m tax refunds (they believe entitled but who knows?)and low wind up costs and running costs since update of perhaps £1m, so total 14.1+1.8-1 = £14.9m or 192p/share

A bearish case with no tax refund and say £2m running and wind-up gives £14.1-2 = £12.1m or 156p/share

I bought for the EEZY4 porty today on the "looks hard to lose much and might make a fair bit" basis.

uk.advfn.com/cmn/fbb/thread.php3?id=30375760&from=1635

My sums may be all wrong and there are of course possible unknown unknowns that could ultimately make me lose!

[n1mgn] 05/4/2017 15:47

thank you Redhill , i am trying to work out were i am wrong

[n1mgn] 05/4/2017 15:46

they is actually 15 mill shares in issue .after last buy back at a nav of 235.

actaully value £35 mill - la agaude was valued in june at 9.25 mill sold for 5.75

Last Nav 235 should therefore reduce buy 3.5 mill plus running costs since august last year . assuming no currency movement ( that in our favour)

[redhill9] 05/4/2017 15:46

n1mgn, I haven't got access to my ERET spreadsheet at the moment as away from home but aren't you ignoring the distribution after that NAV was published? I'm posting from memory but I think your base figure of £34m is too high as the distribution will have reduced the assets representing that £2.24 significantly, meaning La Gaude represents a higher proportion than you suggest?

My previous thoughts that La Gaude would already have been valued to reflect the poor likelihood of a sale at value seem to have been off the mark with this 38% discount - it suggests the most recent NAV was too optimistic. Having said that, my instinct is that the share price reaction to the news today was overdone as it already reflected a significant discount to NAV for La Gaude, and at least now we have some short term prospect of a cash return. I won't be selling at this share price and may be tempted to buy once I've looked at the figures tomorrow.

[zangdook] 05/4/2017 15:39

I don't think they have 34 million euros any more, after the distribution in August

[papy02] 05/4/2017 15:36

See eezy munny thread for his take (maybe 10-20% upside with some (low) risk.

[n1mgn] 05/4/2017 15:31

trying to work this out guys ,

i could be very wrong here but

Last Nav £2.24 value 34 mill mostly cash .

lasting building sold 3.5 mill discount plus 700k running costs , 4.2 mill

34 - 4.2 = rough 30 mil 13% lower

224 - 13% = 195 Nav plus we have increase in currency .

any thoughts guys , if anyone can confirm it would be much apprecaited as the cash will be soon distributed ,

thank you

[zangdook] 05/4/2017 15:21

'Fill yer boots'. Not 'up the bum', at least I hope that's not what it means.