London & Associated Prop... Share Discussion Threads

[energyi] 08/6/2001 11:17

Excerpt from the latest Michael Walters story on LAS follows.
Patience is required with this stock. A BUY sign might be
if John Heller takes over. Otherwise BUY for "safe" (?) rising
dividend. (I'm a property Bear, but should be safe because of
conservative finances and big discount to NAV - IMHO)

QUOTE
All rather puzzling to an outsider – and anyone who buys shares in LAS must be aware that they have chosen to become an outsider in a family-controlled company. Hellers rule, OK?

On one level, it works very well. John Heller, the chairman’s son, gave an impressive presentation of how the company’s five shopping centres – in Sheffield, Bletchley, Christchurch, Dagenham, and West Bromwich – are faring. All appear to be going well, raising the rent roll and working on sensible expansion. Lower interest rates are helping, and while values may be falling in other property companies, there appears every reason to hope that LAS will raise net asset value this year. Last year, it advanced from 57.6p to 60.5p a share.

That would suggest that LAS shares are a steal at 27.5p. Indeed, I have recommended them in various places in recent years. A discount of 54% is remarkable. Conservative valuations could mean the real discount is even greater.

No-one actually asked Heller at the annual meeting why the shares should be so dreadfully rated, and whether he had plans to do anything about it. He was urged to buy some back – the meeting renewed permission for such a move, but Heller has displayed little interest in doing it. He also provided a detailed explanation of why taking the company private did not appeal to him.

It may appear wonderful, getting 100p of solid property value for 46p every time you buy a share in LAS, especially when the Hellers appear able to raise that value quietly and cautiously, year by year.

As an outside shareholder, though, the wonder fades when it appears that the chance of translating that value into a higher share price may come – when? This year, next year, sometime, never?

Though the family control is plain to see, investors buy shares in the hope of generating income and making gains. The LAS dividend has been rising steadily, but the share price has been busy going nowhere. The high point for 1996 was 36p, and 40p in 1997.

In 1998, the peak was 36 1/2p, and 32 1/2p in 1999. Over the past 12 months, the high has been 31 1/2p, and the low 25 1/2p.

Directors scorn suggestions that they should buy in the shares, raise asset value, and perhaps push the shares higher that way. They dismiss it as short-term stuff, mere financial engineering.

[energyi] 14/5/2001 06:54

Acol, are you still following this?

I amazes me how little it has moved over the past
few years. I know the Hellers and they are a quiet
and conservative bunch, but they do their homework.
This is bound to be undervalued. But will it ever
move North of 32P?

[dougal] 05/11/1999 23:27

Thanks for bringing this up.