Home Reit Share Discussion Threads

[bondholder] 01/12/2022 13:51

And they've done a really thorough job of removing all the copper pipe from the house !!

[paulof2] 01/12/2022 13:12

74Tom - The argument everyone has been making here is that Homes properties haven’t benefited from any of the appreciation in house prices over the last two years. Hence why the word fraud is being thrown around when it comes to the profits the developers made.

If that’s the case and the properties haven’t appreciated at all then why would they drop back now?

[williamcooper104] 01/12/2022 13:11

But that's something to watch once results are out Management buying into a turnaround does not mean that all is well Management not buying in is usually a run for the hills signal

[williamcooper104] 01/12/2022 13:10

Disagree on massive bargain But the debt is, in part, an asset - SGRO did a 19 year bond recently at 5.15 (from memory) - so the debts at least 300bp in money, 13 years of that is 42 percent, half that for discounting at an equity discount rate and it's about a £50 odd million fair value asset - as it's a fixed rate loan and not a swap HOME can't cash it in but keeping the debt means you get the full use of the asset Wonder if the debt has change of control covenants - my guess is that it would do - which limits its utility to any buyer - though sometimes the change of control doesn't fully catch holdco sales

[ammons] 01/12/2022 13:06

Silly ammons. Of course!!

[tradez4dayz] 01/12/2022 13:05

They can't until results are released they are in a closed period

[ammons] 01/12/2022 13:03

Perhaps the directors can put thier money where there mouths are and make some decent purchases down at this level. I bet they dont.

[williamcooper104] 01/12/2022 13:00

Interesting on the fall in UK house prices over next 24 months It's going to happen; almost impossible for it not to happen But the epicentre of it is going to be London and south east where expensive mortgages and affordability really bite That £60k family home in Stoke is still affordable with higher mortgages, the £600k shoebox in Stoke Newington really isn't

[williamcooper104] 01/12/2022 12:57

I'm not short at moment - why would I be when my guess of sp/valuation was c40-50p REITs pay out 90 percent of taxable earnings - based on IFRS sl rents So AFFO payouts will be more like 95 percent Little room for any further tenant insolvencies - unless HOME provides capital/incentives to new SPV/charities

[wallywoo] 01/12/2022 12:54

Of course, I think there are problems here. That's why I am picking up shares at 48.5p that were issued at 115p in May. It all looks a little incestuous, with directors both suppliers and buyers of house stock.Is it fraud though. Really doubt that. This was massively over subscribed in May. No fund is selling out. I expect a load of actions to be taken to improve corporate governance and the REIT will continue. In the meantime, shares can be picked up for a massive bargain.

[74tom] 01/12/2022 12:42

A bear raid? So just to be clear you don't think Home have done anything at all to invite the criticism they've received?

I'm not really sure how anyone could be comfortable holding shares prior to the publication of the full year results. On the call yesterday someone asked whether Home would consider getting an new independent auditor (i.e. not BDO) to redo the audit and provide confidence in the numbers. The response from home was it would likely take 3-4 months so wasn't something they had properly considered at this point. However, if shares don't recover at all or BDO aren't comfortable signing off the accounts then they may not have a choice. If that happens they you are very likely looking at a short term suspension of trading as they will miss the end of Feb filing deadline (6 months post period end).

Ps. @retailgains, you say NAV of 73p is not far off the worst case scenario but you don't seem to have considered the fact that UK property prices are going to come under severe pressure over the next 12-18 months. If they were to fall by 20% then bang goes another 15p of NAV.

[wallywoo] 01/12/2022 12:25

Well good luck with your short. See you in a few weeks.


Reits are legally obliged to pay 90% of net rent / earnings in dividends. Will rent stop here? Nah. Anyone short has to cover the dividend, so potentially hugely expensive to be short here.


Very comfortable holding at this price point.

[williamcooper104] 01/12/2022 12:01

I'm getting quoted a borrow fee of 120 percent - that's down from 180 a few days ago and 3x margin Likely large shorts have lower borrow fees, but still likely to be uncomfortably high

[williamcooper104] 01/12/2022 11:56

What shouldn't happen is each time an SPV/charity goes into admin, HOME pays a new SPV/Charity to take on the old lease Far far better to take the pain and let market find a true clearing price - and above all else be impeccable in transparency/disclosures

[williamcooper104] 01/12/2022 11:54

PHP regularly has short interest >3 percent Converse is that any short cover rally may not be so huge Suspect the share price fall is more a long run rather than a short pile on

[williamcooper104] 01/12/2022 11:52

I wouldn't count on the yield long term - I do think rents will be reset by hook or crook - eg either gov intervention or administration of the SPV charities But as said, alternative use value given the need to house homeless should be a floor A change of management/big reset would help - best to fix the model and take the pain

[wallywoo] 01/12/2022 11:34

Couldn't agree more. The share price will recover at some point. Probably when the full year results come out.


I doubt very much that legal fraud case will come out of this. What will drive this is the yield, which at 5.5p minimum going forward means that the current share price is very cheap.


There's zero chance of financing issues, the company still has £30m left over from the last share placing at 115p in May 22.


If you can afford a slight risk of of fraud being proven, it's a no brainer at this share price, imo. Buyers of reits are usually a conservative bunch and don't like risk. That coupled with a reits general down turn has led to a perfect storm here.

Around 2.89% of the shares are short, which is not that high. It's a bear raid that's for sure, but not a long lasting one, imho. The large yield will be very expensive for any one short on XD.


Bgt more here today.

[williamcooper104] 01/12/2022 11:18

Normally when a REITs share price collapses it's got a knackered balance sheet

[williamcooper104] 01/12/2022 11:11

Clearly HOME is not worth it's historic NAV (though wouldn't be surprised if it's only marked down 5 or so percent on next balance sheet date) But unlike an Intu or a HMSO the balance sheet would appear to be in good shape; with an LTV stated as being 11 percent (I got to a lower number so perhaps the 11 is gross of cash on balance sheet which would of course be even better); so this is unlikely to go to zero/penny stock Any guesses on what a reasonable/conservative sp/valuation is Notable that VR equally haven't called it out as a zero (shorts aren't shy about doing that) and will cover at some pokbt

[dodddy] 01/12/2022 10:58

Pointless and rude. If I had the time or patience to pick your last few posts apart I would.

[wskill] 01/12/2022 10:54

Thanks Spec you have saved me a large loss took a little while to sink in what was up.

[tradez4dayz] 01/12/2022 10:43

And George Sto you should go in the rockinghorse category with Doddy.Pointless commentary.It's well known Lynne fennah actually was bought in as a turnaround cfo at Empiric and did just that. Do some research and stop posting stupid comments.

[george stobart] 01/12/2022 10:40

Lynne Fennah should be investigated by Met Policy for her failures in both Empiric and HOME REIT.

Why would anyone hire her with such a poor track record of value distruction