Lxb Retail Properties Share Discussion Threads

[bbking1] 23/11/2016 06:15

Year ended 30 September 2016 - LXB Retail Properties PLC

These numbers says it all:

Fund management fees paid to fund manager - £4,684,290
Costs recharged to fund by fund manager - £109,815
Directors' fees - £305,000

Loss before tax for the fund - £15,144,695


LXB3 Partners LLP (fund manager)
Year ended 31 March 2016 results

Members' remuneration charged as an expense - £3,797,117
After paying for all office related expenses the fund manager was able to distribute £3,797,117 to the 6 partners.


I wish I could of invested in LXB3 Partners LLP instead of LXB Retail Properties PLC as this fund manager makes a massive profit even if the fund loses £15,144,695.
Any delay in the completion of projects causes a big loss for shareholders, but extending the life of the fund means that the fund manager can cream off more management fees for longer. The management won't reach the performance hurdle, so they have zero incentive to wrap up the fund quickly. The fund was never set up to benefit shareholders. A case in point is the delay at the Brocklebank development. The fund manager gets paid a management fee for assets under management, not NAV. So even if the development has been forward sold, the fund manager will receive management fees of the value on the project until it is finalised. So, the delay caused a loss for shareholders, but for the fund manager, even if was not intended by them, the delay will end up with them earning more management fees compared to if the project was finished on time.

The only winner in this scenario is the fund manager. The massive management fees charge is a real drag on the fund and the net asset value of the fund will drop as assets as forward sold, but the management fees will still be based on assets under management. So you can end up with the distorted world where the value of the fund could be £40m but the fund manager is still entitled to almost £5m in management yearly fees.

The fund manager is the only winner here. Shareholders are being shafted big time. And now the fund manager will propose transferring the assets which can't be sold before March 2017 to a new vehicle and then they want to share in the upside still charging management fees.

Go to the Companies House Beta website and search for LXB3 Partners LLP. I'm don't have time at the moment, but I'm sure the fund manager has earned more than £30m in fund management fees during the life of LXB Retail Properties Plc.

[catsick] 22/11/2016 23:08

So Simon Thompson has thrown in the towel which seems to have lead to more selling, for me the issue is going to be what will the newco look like, will it be a clean aim vehicle that holds assets that there should be a good realization of value from or will it be a quasi fund bleeding out fees to another management company, that arrangement will be key to being able to align shareholder and mgmt interests, as it stands heavy director buying has been a big positive that the shareholders will be looked after , after these disappointing numbers I am trying to second guess why they were all buying ...

[salchow] 22/11/2016 16:09

orinocor - not that weird. Investors have only just found out that the NAV before the 18p dividend was only 56.7p. Last year they made 14p per share so they were not expected to have lost nearly 9p per share this time. Also the directors and investment managers had made sizeable investments that gave some confidence in future realisation prospects.

[orinocor] 22/11/2016 15:50

It's a bit weird investors did not sell out after receiving the dividend no? There must have been very little upside from the 48p level.

Not interested yet, needs to drop to the low 30s for me to buy any.

[mortimer7] 22/11/2016 15:47

600k buy at 3.20pm (£220,000 appx). Someone's confident share price will rise from here!

[llef] 22/11/2016 15:17

so, the directors/management incentive scheme was recently rejigged to give them a big % of the increase in NAV above a certain level by time of wind-up - this was presumably to keep them interested I suppose, and to stop them spending their time playing candy crush or watching youtube videos on their work computers

given there is no way now this is going to be triggered, by inference, they wll now be spending their time playing candy crush or watching internet videos, and when not doing those things they will be in meetings to discuss how best to transfer assets to a new vehicle which will have an equally rewarding incentive scheme attached.

capitalism eh, ain't it great!

[simonsaid1] 22/11/2016 14:18

Simon Thompson column today recommends selling. Any compelling reason to hang in there? I'm 21% down...

[epistrophy] 21/11/2016 20:37

flyfisher - it's on page 20 from the EGM circular.



So £1.01, minus 56p returned since, means the baseline is 45p, plus 12% per annum I think.

[badtime] 21/11/2016 20:25

NPT...and a builder going bust in the current market must take some doing

[eeza] 21/11/2016 18:24

Why would they be bothered. Resultant properties are seed corn for the new vehicle - and they'll be riding on it.

Win, win - for them.

[beazer2] 21/11/2016 18:10

In June several directors bought over 5 million shares at 63- 67p, one bought 4 million at 65p. After the 18p dividend he stands in at 47p. Did they miscalculate or are they just being cautious in what they are saying?

[flyfisher] 21/11/2016 17:16

Would anyone have the current threshold at which the performance bonus to kicks in.

Thanks.

[tabhair] 21/11/2016 16:31

A 56.7p+ return from a a 39p share was just too good to be true I'm afraid!

[salchow] 21/11/2016 16:24

Well done to those who wrote in getting an RNS issued! Something of an achievement!

[molrey] 21/11/2016 16:21

'Two shareholders have requested further clarification on the comment in the Chairman's Statement in the preliminary announcement noting the Board's confidence that the ultimate value realisation will be in excess of the NAV reported as at 30 September 2016 which was 56.7p per share. The Board's policy is that value should be returned to shareholders through cash returns whenever circumstances permit and 18p per share of value was realised with the return of cash on 3 November 2016. Consequently, after reflecting that return of cash, the Board remains confident that ultimate value realisation will be in excess of 38.7p per share.'

[salchow] 21/11/2016 15:01

Molrey - I am not happy about this because I had a very large holding but the RNS says "today announces the results for the year ended 30.09.16" Immediately underneath in the column headed 30.09.16 it shows NAV of 56.7p. It's what it says. Most importantly this same figure is reported in the accounts.

Yes, perhaps the later sentence could have referred to the fact that including the post Balance Sheet distribution of 18p the total refund would be at least 56.7p. It is a report on the position at 30.09.16 but it did confuse me for a while

[simonsaid1] 21/11/2016 14:59

Brexit has become an easy excuse for any company to muddy the waters after poor results - find any negative fallout from the referendum and talk-up its affect. Tesco's Dave Lewis had a few words to say to suppliers playing Brexit games last week (though likely with half an eye on their own PR).