Grainger Share Discussion Threads

[alexx] 30/6/2008 08:05

Thanks Judge, for me, a lot of profit in hand wiped out.

[judge jury] 30/6/2008 07:20

Will Grainger be bought out?
30 June 2008
The Journal, Newcastle

THE REGIS group may make a second bid for North East property giant Grainger Trust, according to Sunday newspaper reports

Residential landlord Grainger Trust, which is headquartered in Newcastle and owns 14,000 properties in the UK plus further portfolios in Germany, Estonia and the Czech Republic, has seen its share price slide from 440p in February to 210p last week because of the bleak housing market.

Regis Group, which rents out properties and has a venture capital wing, made a failed £885m bid for Grainger in 2006. At the time, Grainger rejected the offer as 'significantly' undervaluing the business. Sources believe Grainger would now fetch around £700m.

[judge jury] 30/6/2008 07:20

Rumours of Regis interest yesterday I think

[alexx] 30/6/2008 07:16

Any reason for this rise?

[judge jury] 26/6/2008 07:55

I think Mr Brough is correct but clearly he got his timing hopelessly wrong. GRI are obviously going to achieve lower sales prices on the houses which revert to them this year, but they will still deliver very high margins on these sales (since the houses were bought years and years and years ago and are only at historic cost on the balance sheet).

They refinanced most of their debt before the credit crunch and sold loads of stock into their funds also before the credit crunch (albeit they retain sizeable stakes in these funds). So they have actually been quite clever and can buy new stock whenever they want.

Meantime, I expect the home reversion equity release business to grow well in a housing downturn (lifetime mortgages will be more unattractive and less available) which should bode well for future returns (assuming they get their maths right).

A bargain even at these prices but I suspect the shorters will continue to use the slug of bad news to drive them even lower. No need to buy just yet

[cardinal3] 26/6/2008 07:32

Back in March I heard Andy Brough of Schroders say on CNN that this stock was one for the locker, which is why it's on my watch list. Since which time ...oh dear. Andy has had a good reputation for his mid/small cap selections but that is going down the pan along with his funds these days.

[wolterix] 18/6/2008 10:38

there again, this is looking more and more attractive at these levels...

the economy doesn't stop in these recessions, planning apps still go through, nurses still need accomodation...

[james93] 18/6/2008 09:38

adyfc ...... I'm glad you said that. Otherwise I would have had to.

[adyfc] 18/6/2008 06:30

supposedly plummeting housing market, i think you can take the supposedly out of it.

[starship] 17/6/2008 18:43

Coby that is a good balanced post and when looked at against my comments allows a good basis for arriving at a sensible view.

[coby4] 16/6/2008 22:12

starship - the whole of the portfolio is purchased with sitting tenants - that's what they do. market is paying around 70% for properties let to rent act protected tenants. over a third of the portfolio is equity release in one form or another - probably purchased at 50% or less of vacant possession value. i guess as they have secured a few extra hundred million for potential acquisitions that the banks are happy to take a longer view. no doubt there will be an interim announcement updating on trading for the last quarter and performance against last septembers valuation - similar to the announcement in february declaring 207 sales in the first 4 months grossing £38.8m and achieving 4.5% in excess of septembers valuation - obviously saw the writing and built in some insurance. fall in profit is due to increased borrowing costs not the supposedly plummeting housing market. portfolio is diverse and strategic acquisions in europe will bolster rental returns, i reckon long term prospects are good

[atlantic1953] 13/6/2008 16:45

Simon Can you advise on how we can get access to succinct balance sheet summaries.

I believe you use a Jim Slater Product.

[alexx] 11/6/2008 12:39

Very slippery around here

[acidic lou] 11/6/2008 09:45

Is that all Simon? I think 150p sounds too high.

[simon cawkwell] 11/6/2008 09:16

James93,

I am going for Wipe Out/Debt for Equity reconstruction (choose your form of words). My short term target is 150p - just to set matters in perspective. However, the balance sheet looks hopeless to me.

Simon Cawkwell

[james93] 09/6/2008 09:53

Simon ..... What is your target for these ?

[pyman] 08/6/2008 17:32

and my reliable authority says always open a bottle before you try to drink from it. There are alot of 'If 's in your theory.

[simon cawkwell] 07/6/2008 04:52

Gentlemen,

I am told that GRI's balance sheet on a mark to market basis dated 31st March 2008 overstates the gross (i.e. pre tax) value of properties by £483m. Allowing for tax at 30% takes true tnav down to perhaps Minus £30m. Given that the market is continuing to deteriorate quite rapidly the outlook for GRI is very bad.

The defect in my proposition/argument is that I do not prove this figure of £483m. Further, I cannot prove it. However, it has been put to me by entirely sober authority in the property industry. It has certainly not been put to me maliciously.


If a figure of the order of £483m is correct, it is presumably increasing and it is therefore true that the outlook for GRI's share price is very grim indeed. I think it is a compelling short at 250p.

Simon Cawkwell

[pyman] 06/6/2008 13:50

they do have debt and £400m head room . which site was he quoting on?

[benson] 06/6/2008 08:35

Those of you long may wish to consider Simon Cawkwell's words today (Evil Kneivil) - I cannot quote directly because it is from another site but he claims the true TNAV of GRI is minus £30m approx. The current caplitalisation is £340m. Also GRI have serious debt.

[eddie murphy2] 06/6/2008 05:41

Shares have been trending down for a while now and the sector is not in favour at the moment - bounce??

[sandbank] 05/6/2008 15:15

CARDINAL3: 5% rise today may indicate you are right. Someone else apart from you and I reckons this is undervalued and is hoovering up shares at 260-270. I came out at 374 - but I'm back in now!!