Fletcher King Share Discussion Threads

[red army] 15/7/2014 09:04

Hopefully some profit makers will move in so that this can be bought cheaper.

[norbert colon] 15/7/2014 09:00

Great results - I was fortunate to buy in late 2012 at 25p ish so currently getting +12% yield. Even I was surprised to see such a strong performance. Balance sheet very strong - lots of cash - no debt - generally excellent metrics and now riding the property boom. I continue to hold.

[tomboyb] 15/7/2014 08:58

Going up with every buy today - decent results

[drdre] 15/7/2014 08:55

Have to pay 50p now and very little stock around. Cash is just over £3m for a £4m stock. The outlook does state it will be hard to replicate the success of the past year but the cash position adds a degree of security. I have opened a small position and will look forward to the 2.75p dividend :)

[red army] 15/7/2014 08:51

My target is 80p

[rossco] 15/7/2014 08:46

Great results and a doubling of the total dividend to 3p. Even if the shares rose to 50p the yield would still be 6%.

[red army] 15/7/2014 08:42

Has to be one of the markets most undervalued stocks

[longinthetooth] 19/5/2014 13:31

This one has everying.Lowly valuation,strong asset backing(mainly cash),decent yield,improvement in the commercial property sector and possible takeover interest with the prime mover nudging 70!!On the downside very thin market and wide spread but not without reason.

[bisiboy] 17/5/2014 19:32

yes report looks positive for fletcher

[davidosh] 12/5/2014 11:13

From the Savills IMS just out...

In the UK commercial markets Savills has continued to maintain a significant share of the Prime Central London investment and leasing markets, although, as anticipated, the shortage of supply of investment stock has become increasingly apparent. Growth in investment volume outside London has continued from last year and development activity has further increased. We continue to expect regional recovery to be the primary driver of growth for our UK commercial business in 2014.

[norbert colon] 16/12/2013 10:28

Yes, I am happy to hold for income. Still modest valuation.

[battlebus2] 16/12/2013 08:12

Yep they seem positive going forward, bit disappointed at the operating profit though the sale of investments brought overall profit back up to a decent level.

[davidosh] 16/12/2013 08:03

Half year report just out. They seem fairly happy with how things are going and outlook positive. Dividend maintained.

[rossco] 15/12/2013 22:47

Half year report usually issued this week.

[horndean eagle] 20/10/2013 17:33

Just wait for the recovery in property markets to spread outside London and FLK will soon enough come back into vogue. In the meantime cash backing and dividend provide comfort.

[elmfield] 20/10/2013 14:42

Thinking of joining you,
Bit more research first.

[red army] 20/10/2013 14:09

This seems a bit of a no - brainer unless I am missing something.

Why would anyone not buy this for £3.1m take £2.5m cash and re-brand with the minimum npbt of £300k located in the city???

If the management team was pro - active thay could buy this for an AIM listing and go hell for leather expanding the brand with a revised strategy.

Went long on Friday but could only buy tiny parcels.

[bisiboy] 20/10/2013 12:55

on board here so far timing has been good

[norbert colon] 18/10/2013 17:17

FLK now well and truly broken 12 month high with next resistance probably not until around 40p. I am not a strong chartist but 40p would also be a logical price to move to based on the range bound price action since mid 2011. I will watch with interest.

[davidosh] 18/9/2013 22:23

It does not sound like they want any of us at the Agm if it starts at 9am ?

[ed 123] 18/9/2013 21:53

I won't be able to attend the agm.

Next update then to be with the interims in December?

Tiny company, even for an AIM listing. Lot of cash relative to its market cap, but doesn't seem to be doing much with it. I don't know how David Fletcher or District and Urban Group see the future of Fletcher King. Is it to be simply a safe 5% yielder or are there greater plans in mind?

[rossco] 18/9/2013 20:06

The company does not normally issue any trading update announcement from the AGM. If you are going any comments would be welcome.

Interesting share transactions today with the AGM so close.

[ed 123] 17/9/2013 14:05

AGM on Thursday, 19 September 2013, 9:00am on London.

Anyone going?

There should be an update on trading.

[profdoc] 06/8/2013 14:25

FLETCHER KING: A Classic Benjamin Graham Net Current Asset Value Share?

Do we have a company here that is trading below its net current asset value, NCAV, while also meeting Benjamin Graham's criteria of (1) good management (2) good prospects for the business, and (3) stability? (see The Financial Times Guide to Value Investing for summary of criteria) Any light you can shed will be welcomed. What have I missed?

Market capitalisation is £2.7m. Current assets are £4m (which includes £2.6m of cash). If we deduct all the liabilities we arrive at a NCAV of £3.1m, significantly greater than Mr Market currently values the company. A further adjustment might be to reduce the receivables as recommended by Graham. Let's remove 20% of receivables which amounts to £0.29m bringing NCAV to only slightly above market capitalisation. However, an argument can be made for adding to the NCAV the £0.5m classified as non-current 'available-for-sale investments' (actually stakes in three property investment syndicates run by FK).
A further consideration is that the NCAVs shown on recent balance sheets have consistently been above £3m for at least three years.

What about the indicators of a well-run stable company?
(1) Good management.
There are 18 members of staff. The three leaders have been with the company for a minimum of 14 years. They each have decades of experience in commercial property management. They have seen recessions come and go. David Fletcher, founding director and chairman, has 40 years of experience. He also owns 14.6% of the shares. The managers have formed good relationships with clients, some over decades. Seemingly honest and realistic appraisal of the business prospects through the recession years: using words/phrases such as 'challenging', 'keep a steady eye on overhead costs' 'it will take all our ingenuity and resource to maintain turnover'
(2) Good prospects
Profits before tax for the last three years have not fallen below £0.29m pa and dividends have consistently been 1.5p. With a share price of 31p the dividend yield is just under 5%. This performance has been achieved at a low point in the property cycle. At the last high point (2007) dividends amounted to 4.75p pa. Given the company's balance sheet strength there is every reason to believe that what remains of the current recession will be survived. Could dividends then go back to 4.75p? If they do then the Mr Market might push up the share price.
Of the reasons Benjamin Graham gives for a turnaround in the prospects of a NCAV company perhaps the most compelling for this case is that the earning power will be lifted to the point where it is commensurate with the company's asset level. This will not come about through either the benefit of competitor exit from the industry nor from the replacement of the senior managers, but by an improvement in the property market combined with tight management practices (honed in the recession). FK has high operational gearing: with high fixed costs, small percentage increases in revenues should feed through to large percentage increases in eps. Another possibility is a merger, as another firm may value the brand name and the long-standing relationships with property fund managers, but this is unlikely given the sense of continuity of the existing managerial team. The final alternative of liquidation would be wasteful given the profitability and the reputational competitive advantage enjoyed by this firm.

(3) Stability
Positive profits have been achieved year-in-year-out through a difficult period (satisfying Graham's high average past earnings power requirement) and the balance sheet has remained robust. Much of the income comes from collecting rents on buildings for client quarter-after-quarter, providing a solid source of revenue. I cannot detect manipulation of earning numbers and sense that such a conservatively run firm is unlikely to play accounting tricks.

Some negatives
1. Much of the value created is taken by staff. Of the £3m of so of annual revenue more than half is taken in employee benefits. Two directors each take about 10% of annual turnover in remuneration. While experienced and capable executives in the City can expect high rewards a Board that takes 25% of revenue and 250% the profit before tax can legitimately be asked: Are you really operating this business for the benefit of all shareholders?
2. Are they too small? Will the larger property investors consider using a firm with so few surveyors?
3. Illiquidity of shares. Might shareholders be trapped?
It is important in investments of this type to buy on a portfolio basis – see Testing Benjamin Graham's Net Current Asset Investing in London by Glen Arnold and Xiao Ying published in the Journal of Investing, obtainable at www.glen-arnold-investments.co.uk).

[ar4plcscom] 09/7/2013 10:33

Good to see the dividend held.