Hirco Share Discussion Threads

[pjj71] 20/12/2010 21:33

Its not a HRCO plot..

[m.t.glass] 20/12/2010 13:51

Not Hirco - deleted

[divinausa1] 20/12/2010 12:45

sunday express had a story! on hirco

sorry have slow connection cannot post link

[matt123d] 20/12/2010 12:28

Possible demand in the low 50's then and if that fails this will be a dream short!

[m.t.glass] 20/12/2010 12:06

It's done that before. 52p was its closing low about 18 months ago. (Touched 51p intraday)

[matt123d] 20/12/2010 11:54

Good chance this could slip into the 50s now.

[pjj71] 20/12/2010 11:38

because the management have more interest in getting the share price down than up it seems....

[m.t.glass] 20/12/2010 11:32

In the past few minutes the share price has dropped below last Monday's low point.

[bisiboy] 15/12/2010 18:05

huge pants-
i think you have said it all really well summed up
lets see directors filling their boots
if not why not????

[adam] 15/12/2010 13:22

the company is short of cash at the group level

[hugepants] 15/12/2010 13:11

Surely this shower deserve some kind of medal. They've turned £450M into £54M (the current market cap) in 5 years by investing in real estate development in the world's 2nd fastest growing economy. It sounds almost impossible but they've managed it!

Since the company keep reiterating the shares are "materially undervalued" (they also said this last year when the shares were twice this price) and the "net asset value remains intact" then why aren't the directors loading up on shares at this price?

[m.t.glass] 15/12/2010 11:57

The share price has fallen by two-thirds in little over a year. Getting back to those previous levels requires a trebling of the share price. Nothing in the latest results suggests that is likely anytime soon.

Market cap has dropped about £100m. If it goes below £50m (which it will if it price falls below 65p), it will drop off the radar of some banks and funds.

It did leap 30% in October, in a matter of days. But lost all that gain within weeks.

The company doesn't yet know the full impact of proposed tax changes in India. They need time to work them out. Presumably there will be a statement when they've done so. They do say the effect will be a negative one.

[envirovision] 15/12/2010 11:40

Right well im out for a small loss now at 69p. Clearly this has a further to fall and any recovery will be in slow motion. The stock could not even muster a small rally prior to the results which was pretty tell tale from a holders point of view.

[horndean eagle] 15/12/2010 09:13

Panvel is proving to be a stunning success. The 6% average rise in sales price suggests current pricing must be at least 20% higher than the same period last year. Not surprising they selling very quick.

[themoneymonster2] 15/12/2010 08:59

Great, if they get NAV to say 1000p then the share price might rerate to 100p and let me sell and get in to something that is actually appreciated by the market! : (

[envirovision] 15/12/2010 08:48

but they do say:

-Hirco believes projects will create shareholder value in the long term.

-Hirco is confident that the true underlying value of the Company is intact and going forward will continue to be enhanced for the benefit of all shareholders.


(END) Dow Jones Newswires

[scburbs] 15/12/2010 08:47

The more worrying question is what contractual obligations lie behind these sales being reported and can the contracts be cancelled without penalty (a speculators dream that sort of contract!)?

[m.t.glass] 15/12/2010 08:40

divina - what NAV? It's already had to be revised significantly, and depending how the proposed tax changes impact on property and on the marketplace, might have to be adjusted further.

[scburbs] 15/12/2010 08:40

Panvel looks like a good development, driven by investors buying 6 or more units (57% of total sales volume by units). Chennai looks like a bit of a dog with sales volumes going backwards.

"The Panvel township has seen a higher sales rate than Chennai over the reporting period as well as a 6% increase in average square foot prices during the year. In response to this steady demand, we planned and released for sale three additional 30-storey buildings with the top two floors reserved for the exclusive and luxurious Sky Palace apartments. Approximately 82% of the 2,659 units released for sale in phase 1 of the project as at 30 September 2010 had been pre-sold. [85% at 30 November]"

I've heard of investors being ahead of the curve, but it looks like the Panvel investors are decades ahead of the curve!

"Airport buzz propels panvel realty

Last week, when the Builders Association of Navi Mumbai organised a property exhibition, they were taken by surprise when 200,000 visitors turned up for the four-day event. The number was three times more than the 73,000 visitors who had come for the Maharashtra Chamber of Housing Industry's property fair in April. Their main interest was in areas near Panvel, where the Navi Mumbai International Airport is going to come up.

...

The international airport, however, is still a couple of decades away. The first phase will start in 2015, and it will be fully functional by 2030."

[divinausa1] 15/12/2010 08:35

yes the results are VERY mixed

but the negatives seem to be priced into the share price 100 fold in terms of trading so below NAV its madness...

[m.t.glass] 15/12/2010 08:04

I'm sure someone here will summarise the positives in today's Results statement. Here are some of the negatives:



"..The decrease in value over the full year ended 30 September 2009 is primarily attributable to the downward adjustment in the fair value of the investments, deemed appropriate by the Directors.."

"...There have been two significant recent changes to government legislation that have had an immediate effect on the valuations.... ..The implications of this recent change in FSI are currently being analysed by the Company and will be reported as soon as they become available.

"..in an attempt to simplify the existing tax laws, the Government of India has proposed the new Direct Tax Code (DTC), expected to be implemented in April 2012. The DTC proposes to withdraw some of the current tax exemptions for the SEZ's such as Minimum Alternate Tax (MAT) and Dividend Distribution Tax (DDT). It also proposes to withdraw current tax benefits to certain units operating from the SEZ. These changes are expected to increase the tax burden of the developers, as well as negatively impact the demand for SEZ in India. These will have a negative impact on our SEZ development at Panvel..."


"..As at 30 September 2010, the value of Hirco's interest in these four projects, excluding the accrued preference dividend and prior to the Directors' adjustment was GBP413.3 million. Following the Directors adjustment, the value was GBP350.8 million. This value represents:

-- a decrease of approximately GBP63.8 million from the valuation at 30 September 2009; and

-- a decrease of approximately GBP75.7 million from the valuation at 31 March 2010..."



At Chennai "..Although sales progressed steadily throughout the reporting year, we have yet to see the anticipated upturn in net new sales..."


"..We have had two large cancellations which have negated, to some degree, new sales growth.."


"..The impact of the global recession on the projects in which the Company invested, the debt covenants applicable to the project investments and the consequent extension of the timescales for completion of the projects continue to affect the Company's ability to make distributions of cash to shareholders.
In August 2010, the Board announced that as a consequence of the above factors it was prudent to assume that there will be no cash distributions to shareholders before 2013..."

[nilip] 15/12/2010 08:00

divina,

This company looks rediculously cheap at the current market price ?

These are audited results. They made a loss of 18p per share.


Current market cap ~ £53 Mln

Asset Value ~ £513 Mln !

Valuations carried out by an independent 3rd party : Jones Lang LaSalle Meghraj Property Consultants


Chairmans stmt :

[Indian] "GDP growth, having dipped last year to 5.8%, is now forecast by the Reserve Bank of India to reach 8.8% in FY2011. The Asian Development Bank is forecasting growth to remain high at 8.7% in FY2012. We have also seen the return of robust business confidence and positive consumer sentiment. There are signs of an ongoing recovery in the real estate sector that is both broad based and sustained".


So expect the asset value of £513 mln to grow significantly on the back of the recovery.

[divinausa1] 15/12/2010 07:38

is it normal for this sort of company to trade 1000% below NAV?