Lxb Retail Properties Share Discussion Threads

[typo56] 13/9/2018 08:09

Market looks asleep this morning. Isn't it ex 4p?

"Existing Shares marked 'ex' by the London Stock Exchange 7.00 a.m. on 13 September"

[tabhair] 07/9/2018 14:43

Looks like another 4-5p due after the 4p payment this month.

[tabhair] 23/8/2018 12:16

The whole thing has been a string of broken promises.

In the year-end results last year, as npt points out, guidance was set at 30-35p with a 10p distribution planned in the first quarter.

30-35p was then confirmed on end of March of this year but guidance set at the "lower end".

It was end of June that guidance got bumped down to 26-28p (don't think we were ever given 28-30p, npt am I missing something? Management had this to say at the time....

"We are cautious in our assessment of the likely range of outcomes due to the Group’s continuing exposure to letting risk at Phase 2 of Rushden Lakes and at Biggleswade. This reflects our best current assessment of what letting terms will be achieved but it is important to note that, as the balance sheet is reduced by further returns of cash, even small differences will have a meaningful impact on NAV."

Only a few months left....

[flyfisher] 22/8/2018 11:06

The pending distribution of 4p was previously guided at 5.5p, any thoughts on reasons for the slippage.

[alan00] 07/8/2018 12:08

Thanks for sharing Tabhair. I haven't looked at this one recently, do you know the schedule / timeline for completing the disposals / distributions?

[tabhair] 07/8/2018 11:38

Another update today, no bad surprises with the 26-28p guidance re-affirmed. Rushden Lake phases 3+4 have now been signed off on, so I would expect us to get the promised 5.5p dividend September/October.

That doesn't leave much to dispose of.

Biggleswade: We have been told that the final two units are due to be completed and tenanted by the end of August. If past lettings at Biggleswade are anything to go by, we should expect £1.5-2m here, assuming competition.

Rushden Lakes Phase 2: Lettings here have apparently been progressing well, but completion isn't due until January 2019. 4 units are remaining to be let here,
2 are with solicitors. I am thinking the range here for the remaining cash receipt would be £3-4m.

Sutton: This is the largest variable component that needs to be disposed of. A buyer had been found, but was dragging feet, so now this asset is back up for sale. There is 27,500 sq/ft of space here. Assume it's being let at the very lowest range that LXB have let property which is £15 per sq/ft, that gives annual rent of £412,500. At a 7% cap rate, that give a value of £5.9m which seems reasonable to me, even if this bad retail environment.

Higher Newham: Up for sale, not hugely material. Booked at £1m.

My figures on the disposals
-----------------------

Cash as of interim £20.43m

Sheppy +£2.85m
Rushden 3/4 +£10.2m

Current cash position £33.48m

Stafford +£5.7m (agreed, but not yet recieved)

Total cash £39.18m (23.27p)

Remaining assets to dispose of.

Biggleswade +£1.5-£2m
Rushden Lakes phase 2 +£3/4m
Sutton +£5-6m
Higher Newham +£1m

Gross cash £49.68m (worse case)
Gross cash £52.18m (best case)

Costs
Admin costs -£3.5m
Misc wind-down costs -£1m

End cash £45m return 26.7p (worse case)
End cash £47.6m return 28.1p (best case)

[mrx001] 29/7/2018 16:47

Out of these now, sold out on ex-div day for 16p. Don't think it is worth remaining in them for the last few pence. Will come out ahead when I get the div and look back on these as a mistake. Glad also not to have to wait on the board announcing more failures. C U guys somewhere else maybe.

[tabhair] 04/7/2018 16:28

Perhaps I am being unduly optimistic here, but I think that the final return will fall inside the new guidance range, maybe even a little higher. When you look at the cash on hand, then look at the cash that is due over the next few months for sales in Stafford and Rushden, the variable part of what we can recoup from unsold assets is actually quite small. When you consider that the largest remaining assets that is unsold (Sutton), then perhaps things are not so bad?

When I take cash on hand, add in Neats court, Rushden phase 2+3+Garden, Stafford leisure, which are all fixed numbers (with maybe a little variation to the upside, I get to low 20's straight away.

Sutton is now the largest piece of the puzzle that we don't have a value for. If we are to go by the numbers in the interim, it should have a reasonable amount of value. we know that this is a 27,500 sq/ft development and it is fully let now. At very minimum, the rent roll on this property is 412500 (sq/ft * min ERV from interim report). If the cap rate on this is the maximum of 7.31% (again, as per interim), then this property alone has a value of £5.65M. Perhaps in a fire sale you take a bit extra off, but I don't think that much because this is a good property that is let in a good area. Add in a million for Higher Newham, and another million for the other remaining assets, then you can get to 29p easily. I am probably missing other assets, so I wouldn't be surprised if the true value is higher. With a run rate of 3p a year in expenses, in a base case, I get to 26p.

To get a return in the low 20's, we are going to need the remaining assets to either be given away or else the company is sued.

[mad foetus] 29/6/2018 12:32

Should have sold out the time I went to the AGM and there was only one director there and the smell of fisting.

[tabhair] 29/6/2018 08:04

Ouch. Final NAV revised from 30-35p to between 26-28p. I will have to dig into the results more, but for the guidance from only 3 months ago to be totally blown out of the water is disturbing to say the least.

[mrx001] 21/6/2018 14:18

I really dislike this share and the way everything takes so long, how the only winners appear to be the fund managers and BOD.

"The Board is due to meet at the end of June to consider the interim results for the six months to 31 March 2018. That meeting will now also consider detailed proposals for a Return of Cash; an announcement will be made as soon as possible thereafter."

Hopefully this will mean some money returned this year??? There just seems no urgency in closing this thing down.

[tabhair] 13/6/2018 23:34

A REIT with a 5 year timeline (as this originally was) is a really bad idea. When you're dealing with an asset class like land and property in various stages of development, you simply cannot operate in such a time horizon to maximise shareholders return. I wonder just how much money has been left on the table because the company has had to sell assets on the cheap in order to meet the deadline for liquidation?

In my opinion, LXB should have been created in an open-ended manner with the emphasis on absolute shareholder return. The investment manager has shown that they know what they are doing; we have seen many great assets get developed, unfortunately we've seen little benefit as a result of leakage (the asset base of the company is too small to support costs, buying and selling transaction fees, forced selling). If assets had been retained as they were developed and rent rolls were used to finance new developments, I think we would have seen a superior return.

We are where we are though, so the best thing is that the company wraps up as quickly as possible, as cost leakage at this level of assets is significant.

[mrx001] 12/6/2018 08:28

I can't see myself investing in any more funds similar to this one. I would also imagine that we won't see 6p until July at the earliest. I may well call it a day then, too much potential for things to go wrong, but will wait and see what their RNS has to say.