Ground Rents Income Dividends - GRIO

Ground Rents Income Dividends - GRIO

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Stock Name Stock Symbol Market Stock Type
Ground Rents Income Fund Plc GRIO London Ordinary Share
  Price Change Price Change % Stock Price Last Trade
-0.50 -0.85% 58.00 15:02:11
Open Price Low Price High Price Close Price Previous Close
59.50 58.00 59.50 58.00 58.50
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Industry Sector

Ground Rents Income GRIO Dividends History

Announcement Date Type Currency Dividend Amount Period Start Period End Ex Date Record Date Payment Date Total Dividend Amount

Top Dividend Posts

spectoacc: Agree not fatal. Far more pressing bear points on GRIO: 1. The Manchester cladding court case, which they could walk away from (separate subsidiary) but which wouldn't look at all good 2. Uncovered divi (separate issue to having paid previous divis "illegally") 3. Govnt finally getting round to legislating on leasehold reform 4. Small size of the co/disproportionate fees/inability to grow when trading at (theoretical) discount to NAV Bull points: 1. Some inflation protection - cheap compared to Linkers (for a reason..) 2. Asset management initiatives - fewer than with most property plays, but they're proving there's still some
spectoacc: Not a rise I've been buying but yes - with Brexit ongoing, there's a distinct lack of Parliamentary time (or will) to get on with leasehold reforms. Not sure what to make of this, other than that it's no surprise from GRIO: "In addition, the Company also intends to regularise the position with respect to historic dividends, in relation to which the Company has recently become aware that such dividends were made otherwise than in accordance with the provisions of the Companies Act 2006. In order to put the potentially affected parties in the position which they were always intended to be, the Company is proposing to waive any and all claims which it has or may have in respect of either current or former shareholders, or current or former directors, in relation to such dividends." I assume today's distributable reserves issue relates to not having the historic profits to be paying out divis - ie paying from capital? But glad to see that, as a former shareholder, the company intends to waive any and all claims it has against me, in relation to the dividends it paid :) :)
spectoacc: Not sure new house leasehold ban makes much difference to GRIO. But I see they're continuing to pay out of capital - c.1.6p earnings, c.2p divis (made a loss but only due to yet another revaluation downwards of portfolio). No mention I could see of previous legal problems re Manc block? Still feels a bargepole stock to me, but it has a price - based on 1.6p for Half Year extrapolated up to 3.2p, perhaps 60p/share? Costs will be eating into it now they can't realistically expand. Edit - sorry, the Half Year Report did talk about the Manc legal problems further down: "In January 2019 a High Court judgment was handed down against North West Ground Rents Limited ('NWGR'), a wholly owned subsidiary of the Company. The damages associated with this judgment have yet to be determined in a separate hearing, for which a date has not yet been set. NWGR continues to evaluate what the next actions and consequences of the judgment may be. NWGR is reliant on the financial support of the Company to finance further legal action and to comply with the judgment. The Company continues to review its own obligations in regard to NWGR and NWGR's obligations under the judgment." And "Due to the legal action and uncertainty of its outcome in September 2018, the value of the Building was reduced to GBP100,000 in the accounts of NWGR. NWGR continues to pursue Carillion's insurers and sub-contractors under collateral warranties. NWGR has no external third-party debt and is ring-fenced from the wider group. During the period, NWGR incurred costs of approximately GBP1.1 million in relation to the judgment and will incur further sums as part of seeking to comply with the judgment timetable. NWGR is reliant on the financial support of the Company as its parent to finance further legal action and any decision on future funding requests will have appropriate regard to shareholders interests together with the interest of other stakeholders." Which sounds to me like they might attempt to walk away from NWGR! But not before having incurred £1.1m - and more - in costs. An utter fiasco for an Investment Trust, and are any similar grenades lurking elsewhere in the portfolio? Not what shareholders signed up to when they invested in GRIO. Changing my target price to "below 50p, bordering on uninvestable".
spectoacc: @CWA1 - also a non-holder, tho not so content after taking a bath on them! Wonder at what price they'd be a long - divi nothing to write home about and wasn't even covered. 80p? 60p? Everything has its price, but GRIO not got to it yet :)
spectoacc: Struggle to see how this won't just wither away - are they still paying the divi partially out of capital? Does the NAV reflect the court judgement against them? Where are we with legislation? Costs need to be cut too - chances of them growing into the cost base now seem remote.
spectoacc: DJN headline points out GRIO have been ordered to pay £250k, but there's a lot more here - legal costs, probably for both sides, cost of remedial work (within 18 months), damages for dirty water, whether Carillion's insurers will meet any of the costs, whether this sets a precedent for other buildings that GRIO own the freehold of. Would be interested to see any analyst comments, if anyone comes across any.
spectoacc: You don't get this with a Linker: "01 February 2019 Ground Rents Income Fund plc ("GRIO" or the "Company") Notification of Judgment Ground Rents Income Fund plc (LSE: GRIO), a listed real estate investment trust ('REIT') investing in UK ground rents, wishes to announce that a High Court judgment has been handed down in connection with the recent hearing of the case between its wholly owned subsidiary North West Ground Rents Limited ('NWGR') and Blue Manchester Limited ('BML'), a leaseholder within Beetham Tower, Deansgate, Manchester, (the 'Building') the principal freehold property asset owned by NWGR. In the Company's 2018 Annual Report and Financial Statements details were disclosed regarding NWGR's intention to defend legal action brought by a leaseholder (as set out within the Notes to the Consolidated Financial Statements: Note 22 Other financial commitments and contingencies). Legal advice obtained at the time of approval and publication of the 2018 Annual Report indicated that no significant liability or no material irrecoverable losses were likely to arise in respect of the claim. Furthermore, the published Net Asset Value ('NAV') of GRIO as at 30 September 2018 included a write down of the Building's value to reflect the influence of the legal action and the uncertainty of its outcome. The principal basis of the claim relates to the failure of the structural sealant on a number of shadow box units, which form part of the façade of the Building, and the question of whether or not the remedial work done to date has kept the building in good and substantial repair. A summary of the judgment is as follows: The court has found for BML. The Building is in disrepair and BML is entitled to an order for specific performance that permanent remedial works be designed and implemented within a period to be agreed or the subject or further order although the provisional view of the court is that this should be within 18 months from the judgment date. Hoardings, which were erected by the contractor while the initial remedial works were carried out, must be removed within a period to be agreed or the subject or further order although the provisional view of the court is that this should be within one month and BML is entitled to damages in respect of a period of 31 months when the hoardings have been in place. NWGR was ordered to pay GBP250,000 on account towards BML's costs within 28 days. The final amount of costs will be determined at a future date. In a second issue considered by the court, BML is also entitled to damages in respect of the release of dirty water into the water supply of the building due to lack of maintenance. BML is entitled to two-thirds of its costs in respect of an interim injunction it sought in connection with the water supply issue, such costs will be determined at a future date. The damages associated with this judgment have yet to be determined in a separate hearing, for which a date has not been set. There are a range of potential next steps which NWGR could take, which include pursuing the proceedings which it has already issued against the original contractor's insurers and the sub-contractor through existing warranties and indemnities, which, if successful, would limit any potential liabilities or irrecoverable losses for NWGR. The proceedings have been issued against the contractor's insurers because the contractor was Carillion Construction Limited, now in liquidation. BML has also commenced action against the contractor's insurers and sub-contractor through their existing warranties. As regards the remedial works, the scope of the trial was limited to the issue of liability for the remedial works to be completed, but not the issue of the quantification of the cost of such works. NWGR continues to seek advice on the nature of the remedial works required to comply with the judgment and their associated cost. NWGR will evaluate what the next actions and consequences of the judgment may be. NWGR is reliant on the financial support of GRIO to finance further legal action and to comply with the judgment. The Company continues to review its own obligations in regard to NWGR and NWGR's obligations under the judgment. The GRIO board will keep shareholders informed of progress and provide a further update as and when appropriate.
spectoacc: @Jombaston - yes, GRIO has offered the RPI switch. Unfortunately for them, that isn't what the legislation may come up with. Interesting to see how few leaseholders have taken it up. Fair point about retrospective changes - unfortunately, Parliament can do whatever it wants, and altering contracts is exactly what they're planning. Banning the future sale of houses on leasehold has no effect on GRIO either way. Being sub-scale is bad enough (disproportionate charges etc), but the continuing near-death of the traded market can't be helping - and if they do get to pick anything up on the cheap, it has a knock-on effect on the valuations of what they already hold. Everything has its price - but I suspect GRIO's is currently too high at c.£1.09, particularly when you can buy long-lease prop co's on eg 10% discounts and 8% yields. GRIO may be much more recession-proof, but it's not legislation-proof.
spectoacc: Hmm thanks @kenmitch, I've been trading for more than 20 years, including warrants, but thanks for "trying to help". OK let's look at it another way. Usually with a warrant vs share, you'd work out likely scenarios, and likely upside/downside. GRIO isn't going to zero, just about whatever the govnt come up with. NAV is going to c.40p if the worst case "10x" suggestion is adopted on everything. Something is going to be adopted, and eg 10x for resi doesn't seem out of the question. But even 20x affects GRIO's NAV (although it's already trading at a decent discount to it). So: 40p lowest (warrants: nil) 80p if more like 20x (warrants: 0.5p? Seems unlikely that even with 4 years to go, GRIO could get back over a quid when it's also paying out income, currently uncovered, in divis) £1 if some fudge that sees much of GRIO's assets avoid a hit - eg only resi, in certain circumstances (warrants: a few p of time value, but the point about them paying out more in divis than they're receiving in income still stands) £1.20 if legislation abandoned (say a hard Brexit takes up all Parliamentary time). Warrants - 21p? Looking at those scenarios, I have to agree that GRIO is probably too risky - upside back towards previous NAV is only one of about 4 possibilities. Very roughly per scenario, one of which we know is going to happen within months (please don't check my maths too carefully): Shares -55%, warrants -100% Shares -25%, warrants -95% Shares -5%, warrants -75% Shares +12%, warrants +260% I'd rather be left holding the shares, with a divi, than taking a punt on option 4. But the previous point stands - probably better holding neither. Options 2 or 3 surely have the highest likelihood, and whilst the shares survive either option largely OK, the warrants only thrive on Option 4. The fact the shares aren't going to zero, even on a Labour govnt, and also aren't about to recover highs or even get back to highs over the life of the warrants in most scenarios (thanks to the change in legislation), makes the calculation a little different to normal. Good luck calculating what stake to place on the warrants if anyone did deem them the best choice. You note yourself how little time value there seems to be in the warrants, but haven't grasped that the impending legislation is the reason why.
spectoacc: Thanks @kenmitch, interesting point! I've only been trading GRIO, due to the divis, but am increasingly worried where the legislation is going, and at GRIO's silence. Perhaps they feel they can't comment further until there's something concrete, but more than one press article has suggested a new rule of buying out the freeholder for just 10x the annual ground rent. What isn't clear is whether that's "retail only", ie resi and not commercial. Could have a nasty effect on pension funds which you'd think the govnt would want to avoid.. What is clear is where the worst-case would leave GRIO - c.40p or less - and GRIW - 0p. GRIO are keen to trumpet their success, but if you look at page 2 of the last report (March) you'll see 5 photos of assets they've bought/current valuations, representing the top 5 holdings. Take say The Gateway Leeds, cost £2,360,000, value £4,140,000. Yield 3.33%. Convert that to 10x on a "new rules buyout" basis, and it becomes worth £1,380,000, ie a million quid less than they paid, and exactly a third of what it's currently valued at in the NAV. The same goes for all their holdings, with varying hits to resulting NAV, dropping it by two thirds. I can't imagine the legislation (which is still entirely up in the air) would let say "Wiltshire Leisure Village" buy themselves out of their index-linked ground rent for just 10x the ground rent. But it might. And the resi stuff? The residential blocks or student blocks? It's a complete no-brainer for them if the legislation gives the opportunity. That makes me think the warrants are just a little too risky - losing (from here) 65% of investment (less divis) is one thing, losing 100% is another. Can't see the new rules not affecting GRIO's NAV in some way, & some of that is in the price of the ords already, but it's hard to see GRIO shooting up on the new rules.
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