Gcp Infrastructure Inves... Share Discussion Threads

[hpcg] 29/9/2022 12:37

I guess the answer, to an extent, was pension fund liquidity needs.

[williamcooper104] 26/9/2022 20:47

The corporate tax benefit to NAV won't come through - or will on paper but not in reality As labour will whack up corp tax And very hard to see how they don't win the next election

[ptolemy] 26/9/2022 12:44

Reason for price drop anyone?

[donald pond] 26/9/2022 12:06

There are also uplifts linked to the energy price, and should be another 1.7p on NAV reflecting corp tax cuts. But discount rate likely to increase to reflect gilts

[lloydypool] 26/9/2022 11:50

Thanks, I may have to look further into this. Not ever looked before but looking for some homes for cash in PF & wary of completely buying into doom and gloom as the next few months could present some compelling long term opportunity for those willing to accept some volatility.

[speedsgh] 26/9/2022 10:28

According to the half-yearly report released in June, 52% of the income is inflation-protected...



Over half of the Company's investments, c.52% by portfolio value, have some form of inflation protection. This is structured as a direct link between the return and realised inflation (relevant to the supported living assets and certain renewables) and a principal indexation mechanism which increases the principal value of the Company's loans outstanding by a share of realised inflation over a pre‑determined strike level (typically 2.75% to 3.00%).

The table below summarises the change in interest accruals and potential NAV impact that would be associated with a movement in inflation.

SENSITIVITY APPLIED TO BASE CASE INFLATION FORECAST ASSUMPTION -- NAV impact (pence per share)

(2.0%) -- (10.3)
(1.5%) -- (8.0)
(1.0%) -- (5.5)
(0.5%) -- (2.9)
0% -- 0
0.5% -- 3.1
1.0% -- 6.6
1.5% -- 10.3
2.0% -- 14.2

[lloydypool] 26/9/2022 10:07

What sort of spread to the 10 year gilt yield has this traded in the past? If a 10 year gilt can yield 4.2% then it isn't surprising that the yield on this has moved out with it.

It would be interesting to know how much of the income is inflation linked as that would perhaps close the spread between this and the 10 year yield.

[speedsgh] 26/9/2022 10:01

Wow! Suddenly trading at 7.2% yield and 15% discount to last stated NAV of 114.31p. What does the market know that we don't?

[donald pond] 21/9/2022 08:30

When corporation tax rose it knocked 1.7p off NAV, so that should come back if Truss goes ahead with the proposed cut

[donald pond] 14/9/2022 09:20

A lot of their lending is inflation linked, so it should be feeding into increased income. I doubt we will see the dividend increase, but the coverage should do, which will get some positive broker attention.
I added yesterday at 106.4

[rik shaw] 12/9/2022 18:57

Agreed, I'm just suggesting yield on new investments might start to improve.

[cocopah] 12/9/2022 17:01

As far as I know the dividend cover is about 1x so I can’t see them increasing the dividend.🤷‍♂️

[rik shaw] 08/9/2022 16:20

Looking at the big picture for GCP, they reduced the dividend a while back because the returns they were able to get on new investments in whatever sector they looked at were generally lower when yields were being compressed. Hopefully this is being reversed in the current climate with interest rates rising.

[williamcooper104] 08/9/2022 15:59

https://www.insidehousing.co.uk/news/news/landlords-must-prepare-for-new-rent-cap-to-maintain-viability-warns-english-regulator-78040Reminds me of care homes - landlords confused government paid with government backed and lost shirts

[ptolemy] 08/9/2022 15:01

Thanks for responses.

[donald pond] 08/9/2022 13:52

The social housing sector isn't my favourite but the upshot is that councils have a legal obligation to provide it and they agree long term contracts with providers. But it is complex to manage, the service providers are always struggling and it's not something GCP have added to. In theory, it's good: you buy a house, do it up and then enter into a long lease with a body backed by government funding. In practice, not so simple

[williamcooper104] 08/9/2022 13:35

Being a junior lender to the sector is still pretty risky

[rik shaw] 08/9/2022 13:15

There is no direct comparison with SOHO/CSH as GCP do not have significant equity interest in their investments. For the subordinated debt portion (61%) of their investments they quote incremental exposure to shareholder interests c.12%. (see June 2022 factsheet).

[williamcooper104] 08/9/2022 12:48

See SOHO/CSH Assisted/homeless - it's all about selling properties for a huge premium because it has a lease in place with an SPV type charity who commit to pay away almost all their surplus in rental payments The regulator is reviewing the sector and has made many unfavourable comments

[williamcooper104] 08/9/2022 12:46

Assisted living is a nightmare sector that's going to come under huge pressure

[ptolemy] 08/9/2022 12:26

I see 10% of the portfolio is supported social housing. It's important and has a positive impact on people's lives but what's the investment story there? How does the fund benefit by holding an asset provided to vulnerable people?

[nimbo1] 08/9/2022 10:55

there is a large overhang here - can get a quote of 106.45 to buy 400,000 shares. watch for a clear out of volume is my best guess so a turnaround can happen. couple of large trades printed today.

[cocopah] 07/9/2022 18:59

I guess we will see what happens tomorrow (Truss’s plan)and whether that has any bearing on the share price. From memory I think the dividend cover was just over 1. 🤷‍a94;️

[donald pond] 07/9/2022 17:59

I think the difference is that when that last happened the NAV was on a downward trend driven largely by weak power prices. Now it is moving up every quarter. I suspect that also helps their dividend coverage.