Highcroft Investments Share Discussion Threads

[spectoacc] 15/4/2020 20:41

HCFT one of the few to barely dcb, and can honestly say I still don't fancy it.

[spectoacc] 30/3/2020 08:50

Again, an old favourite:

"The people who bought after a 50% fall in 1929, went on to lose 80% of their money by 1933".

I'd suggest we're some way off the 1933 lows.

Stay lucky all.

[essentialinvestor] 29/3/2020 15:03

Lows are usually made while newsflow continues to worsen.
When there is an indication of any turn in fundamentals, share prices will often
be 30/35% higher - that's in very general terms!.

By no means Am I saying we've seen lows put In across markets,
however think it's time to start compiling potential buy lists.

In terms of this sector, looking for the lowest LTV and highest liquidity
is a good place to begin. Obvs LTV's rise as valuations decrease.

[spectoacc] 29/3/2020 14:52

Credit to him for the trade, and I think he closed on Tuesday, which wasn't bad at all - phenomenal 3-day bear market rally. He'll soon wish he still had the position tho, with some of his holdings (eg Chipotle). Trump may well want to end the lock-down, but the disaster in the US has barely begun I fear. Italy redux.

[skyship] 29/3/2020 14:49

Bill Ackman at Pershing sees value where we are now - Stateside at least...

[spectoacc] 29/3/2020 14:36

I'm with @Skyship, when the babies go out with the bathwater, you look to only pick up the cutest babies. AKA buy "very cheap", not "cheap".

And fwiw, I think we're going a whole lot lower - market may well bottom before UK cases peak, but we're some way off that. Even ignoring a resurgence in autumn, the inevitable US crash, and it hitting RoTW.

[skyship] 29/3/2020 14:31

HCFT were in suspended animation whilst all around them crumbled; much the same as MCKS. Then the dam burst, someone woke up ---- and they tanked, as well they should have with so much retail warehouse on board.

They remain a good quality operation; well manged save for their last acquisition.

Won't be buying anytime soon though - better plays elsewhere in the sector.

[nickrl] 29/3/2020 12:16

HCFT on a par with everyone in down around 30% over last month but on negligible trades. Trading at about 55% below last reported NAV.

They are 55% retail/leisure 45% office wharehouse and even in retail they arent over exposed to disposable income retailers. Ordinarily id say with most leases >5 years there in a good space but i suspect that will count for nothing now.

They used to have a lowish LTV but recent investments have pushed this upto 30% on last valuation. They also have a £4m loan due this year so that might cause them issues but cant see when its due

Previous contributors have been reasonable positive but any views now?

[kenny] 10/1/2020 10:24

Thanks Skyship and others for your views on NAV and dividends.

[semper vigilans] 10/1/2020 10:03

Gearing up to a modest level to buy further good yield assets (as well as disposing of equity portfolio) has helped too.

[crumppot] 10/1/2020 09:59

Redponza, HCFT have invested in high yielding assets which have produced a higher dividend. Either they have bought well and these assets will continue to produce a good return as the directors think they are good long term assets or they are turkeys and the next NAV will show a big reduction. They wont be able to increase the dividend like this continually so may be reaching a plateau soon.

My feeling is they are a well run company and any change in the NAV in March will not be significant. The discount to NAV will still be significant.

I will continue to invest and may add a few more.

[redponza] 10/1/2020 08:53

I have a question regarding Highcroft....

Highcroft dividend has been growing in quite a fast pace over the years while other similar REITs did not. Given that they are all operating under the same property environment, and REIT is required to distribute most of its cash flow, how Highcroft can grow the dividend so much while others do not?

Thanks.

[skyship] 10/1/2020 08:00

Kenny - see my post No.324 on the WHR thread:



If not interested in the NAV, then would seem sensible to get your yield from any of the others as they all yield more than HCFT. (Single best play remains RGL in my view)

Incidentally, the underlying NAV is one of the key components of propco valuations; so you would be well advised to take more interest in NAV, as indeed you seem to do in your 2nd para!

As to your question, difficult to estimate the HCFT NAV. The Warehouse element will have risen slightly whilst the Ret. W/hse will take a haircut. On balance my guesstimate would be for a Dec'19 valuation registering a 2% fall overall - back to c1170p.

Off. Ind. W/Hse…. Ret. Ret.W/hs ..Spec/Alt.

9%...0%……... 39%.... 10%... 33%...…..9%

[semper vigilans] 09/1/2020 18:12

Small decrease in rent coming from Jigsaw?

[kenny] 09/1/2020 17:22

Annual results will presumably be near the end of March. They seem to have been pretty astute in avoiding the fall out in the High Street and maintained a fully let situation.

They cannot, however, avoid the trend of downward property revaluations. Anyone care to speculate upon the likely percentage - pre gearing. This is my only UK property holding, so while I am aware of what is happening at INTU, HMSO and others, I think other holders may have a better handle on the quantum of a write-down?

Note, I am a holder for the dividends, so have no intention of selling whatever the quantum of adjustment to NAV; last year or in 2020.

[crumppot] 23/10/2019 11:16

They probably wanted a change.
Unlikely, as Skyship says, to be raising cash based on the large NAV discount.

[skyship] 18/10/2019 11:30

Spangles - totally different; and raising cash a near impossibility due to pre-emptive rights. You can't really issue new shares as the existing are standing at a c25% NAV discount!

[semper vigilans] 18/10/2019 08:54

Time for a change/cost?

[spangle93] 18/10/2019 07:22

Uh-oh, change of financial adviser and broker.... seems to lead unerringly to a need to raise cash, at least in the oil sector. Maybe it's different here?

[spangle93] 12/9/2019 07:37

HCFT goes ex-dividend today

[skyship] 01/8/2019 11:03

Interesting to read the Property report and stats in UKCM's Q2'19 statement. Retail of course down, but retail warehouse an out-performer in that sector:

[semper vigilans] 22/7/2019 15:10

Valuation at 30/06/19 and the date would have not have been moved. Valuations have always been conservative here and very little trade here.

[crumppot] 22/7/2019 15:05

I understand your concern about retail assets which may or may not be right.

However, I don't think they rushed their results, they were probably released because they were ready more quickly. There is nothing untoward in my opinion.

Not much of a market in the shares, no significant volume recently.

[kenny] 22/7/2019 14:41

I am guessing that there is going to be another write down of the retail assets in the second half and that it will exceed the 1% seen in the first half.

I am invested for the dividend but it looks like others may be selling because, at present, it is difficult to see a bottom in the recurring write-downs of retail property values. In my opinion, which could prove to be in error, this may explain the regular selling of shares in HCFT.

Results may have been released early because, if values are steadily falling, it does not pay to wait.

[skyship] 22/7/2019 10:54

As crumppot says - most REITs trade at a discount. There are very occasional exceptions, such as CREI, but on the whole that discount measure is a very good indicator of value if you are happy with all the other propco parameters.

I think I'm right to say that HCFT traditionally always traded at a pretty limited discount; and only recently has it widened out to more than 15%. Currently at the offer price of 925p the discount = 22.6%.

A nice, well-managed, slow-burner store of value on a 6% yield.