The Local Shopping Reit Share Discussion Threads

[gfrae] 22/5/2014 09:39

Unclear to me what the adjusted NAV is;49p or 56p?

[skyship] 22/5/2014 09:11

Yes, I think EezyMunny worked it out for us in 628 above...

[eezymunny] 22/5/2014 09:08

See my post 626 redhill for last submitted accts for NOS2/3 which hold the props you refer to. However we don't know if there have been any sales from NOS2/3 so we're in the dark. I imagine not much different...

[redhill9] 22/5/2014 09:03

If I'm interpreting Note 6 correctly, the value of properties for sale under Minard are held in the balance sheet at £78.178m. Did we know a figure previously?

[eezymunny] 22/5/2014 08:32

I think that sums it up Skyship

A somewhat sluggish performance on rents and occupancy but encouraging to see sales being done at significant premium to book values, tho we can't tell if they are cherry picking better properties.

As you say we won't really know what's what until a buyer emerges for Minard pros.

Remains a leveraged gamble with the odds IMO still on a favourable outcome from here...but by no means certain!

[skyship] 22/5/2014 08:14

hmm - that 56p could be a cut & paste error from an earlier RNS!

I suspect we'll see an amendment RNS.

Still all down to the result of Project Minard.

[scburbs] 22/5/2014 08:02

Skyship,

A £6.4m rise in adjusted NAV is a spectacular number if correct. It looks a bit toppy with property valuations down £1.3m on September and swap value up (i.e reduced liability) £1.26m.

Note 12 shows adjusted NAV at 49p which looks more in line with the results and is the number disclosed in the net asset value section.

"The adjusted NAV of the Company as at 31 March 2013, excluding liabilities arising from derivative financial instruments, is £40.4 million or £0.49 per share (30 September 2013: £39.9 million, £0.48 per share)."

They are not great on years, but they mean 31 March 2014.

"Property sales totalling £1,821m, a premium of 18.05% to preceding valuation."

They are not great on numbers either (£1.8bn of sales)! Has anyone at LSR read these results for errors/typos?

[skyship] 22/5/2014 07:53

All looks to be positively on track, adding value, accumulating cash & raising the NAV:

Adjusted NAV: GBP46.3m or 56 pps, excluding liabilities arising from derivative financial instruments (30 September 2013: GBP39.9m, 48 pps).

[skyship] 21/5/2014 17:29

RNS - Interims to 31st Mar'14 tba tomorrow...

[badtime] 14/5/2014 09:59

made a small top up last week but paid 30.75 from memory

[tiltonboy] 13/5/2014 13:55

Just bought a few more at 30.35p for a client.

[badtime] 13/5/2014 12:21

Tilts looks as though u might be able to get them a bit cheaper now

[gfrae] 06/5/2014 10:42

The interest rate swaps expire from memory in 2016,ie at a rate of about 3p p.a.(The liability equals the amount it would cost to buy them back).If they bought them back their interest cost would fall by an equivalent amount.
They are also repaying debt at £300,000 per quarter,equivalent to another 1.5 pence p.a.
All properties that have been sold so far,and that are in the process of sale, have been sold or are being sold in excess of NAV.
So,all things being equal,without any change in valuations NAV should be increasing by at least 5p per share p.a.
If you factor in a slight improvement in the property market then............?

[skyship] 05/5/2014 09:50

Guesstimates for The Minard Maiden Plate - Runners & Riders:

gfrae - 75.00m
Redhill9 - 76.00m
Bscuit - 80.80m
stupidboypike - 80.90m
Tiltonboy - 81.20m
NK104 - 82.00m
Spittingbarrel - 83.00m
Mozy123 - 83.60m
SKYSHIP - 84.80m
AlanJI - 85.00m
Badtime - 87.00m

[skyship] 05/5/2014 09:48

EEZY - "Talk of 48p MINIMUM is daft IMO. It might be a lot more or a lot less than that!"

Perhaps better to refer to a benchmark rather than a minimum. All I was seeking to convey is that the accounting stat of 41p has been overtaken by events - the property market has risen and time is expiring on the swaps.

Perhaps after the Project Minard result that EPRA NAV of 48p will prove to be a good working model MINIMUM...then we'll all be happy for sure!

[eezymunny] 04/5/2014 08:55

Thanks AlanJI. I think true to say also that the liability will reduce somewhat if interest rates rise before they expire. That may or may not happen before expiry and probably won't make a big difference if rises are small but whatever...

[tiltonboy] 04/5/2014 08:44

and for you.

[badtime] 03/5/2014 14:19

Tilts....result! o happiness

[alanji] 03/5/2014 07:40

Your reading is correct EM and, yes, the liability should have reduced bt. Whether you add back the liability to get a "true" nav depends on whether you think it will become a "real" liability ie will they be held to expiry, in which case you can exclude the swap liability in the nav. As you say, if they sell properties and repay loans before the swap expiry date they will either have to terminate part of the swap and pay the associated liability or continue to pay the "interest" until the expiry date. Given the current state of affairs I think it is reasonable to add back some but not all of the liability.

[eezymunny] 02/5/2014 18:35

Given that interest rates haven't changed then yes there should be some reduction because of elapsed time since then....but don't take my word for it...don't fully understand and we'd need to see the contract to be sure anyway!

[badtime] 02/5/2014 17:43

I guess that liability would have decreased from the last set of accounts... Or is time not a factor?

[eezymunny] 02/5/2014 17:08

Hmmm I've read a bit more about swaps. It seems to me that the liability (as it currently stands) will trend to zero as the expiry approaches - but that is predicated on continued interest payments until that expiry. So if they sell the loans with the properties they may (still not sure!) have to terminate the swap agreement(s) and pay a break fee(s) (c. the current swap liability). So the best NAV to use is the one that includes the current swap liability. I may very well be wrong...

As I said before the bigger issue is the price the properties sell for (if they do!) as that is what gives the significant upside/downside from NAV. And that we can only guess :)

[eezymunny] 02/5/2014 16:19

Thanks AlanJI

Can we surmise from that, that there will be no cash outlays related to those derivatives if simply held to expiry? I don't get what you mean by "or they exceed the outstanding loan". If properties, with associated loans, are sold, where does that leave the derivatives?

And if no future cash costs if held to expiry, at what point WAS there a cash cost - as presumably the other side of the derivative isn't doing it for charity! Are they purchased up front like an option?

TIA.

[alanji] 02/5/2014 16:01

EM the swaps expire in 2016 and 2017. Ignoring interest rate changes they would wind down in a straight line from now to expiry. It only becomes a real (cash) cost if they are cancelled before expiry or they exceed the outstanding loan.
If medium term interest rates rise the notional liability will reduce - if interest rates rose enough (and in no way am I suggesting they will) the swaps could become an asset.

[eezymunny] 02/5/2014 13:53

Hmmm.. that 48p excludes the derivative liability, no? That will still be there if these props are sold, no? So if co sell all props and return cash, shut up shop (excuse pun) then that liability will have to be paid off...

Tho as I've said b4 I don't entirely understand how these int rate derivatives work and...would need to see the wording.

Talk of 48p MINIMUM is daft IMO. It might be a lot more or a lot less than that!