Mapeley Share Discussion Threads

[ok,yah] 28/10/2008 12:03

Minerva in same boat with market cap 26 million fixed assets £600 million plus net assets £300 million.. Have opened small positions in both Minerva and Mapeley today both potential 10 baggers in next 5 years from here - Of course there is risk but with prices this cheap I think the risk is worth it - unless both go bust I think it will be a great investment

[robizm] 28/10/2008 11:47

I dabbled with these last week at 4 pound per share, but sold out quickly for a small loss. I found it very hard to sell and I only had 1000 shares. Everything else falling but there are still a few buyers of other stocks. I am keeping my cash for another day.

[alitak] 28/10/2008 11:34

put a limit order in to buy at 220p but no results, this fall as far as I can see has been on very light volume, basically there is no market as everyone is so fearful they are either mentally paraylsised or broke.

[gsands] 28/10/2008 11:07

This reminds me a lot of when I was short CWD. Against all the odds the price kept rising and rising. Unfortunately for me the company was taken out at an astronomically high price, right before the property market crashed.

In other words, I was right, but still lost.

I hope MAY isn't the same story but in reverse....

[gsands] 28/10/2008 11:04

I think even the believers are losing faith. I know I am sitting on my hands.

If there are forced sellers and no one else is buying, why should I?

[hybrasil] 28/10/2008 10:45

There are simply no buyers.
No market?
There are bids for £2k of stock in a co with a market cap of £68m. There simply is no market.

[tt_dave] 28/10/2008 10:43

What just happend then?

Also what am I missing? These seems very cheap for the dividend it's paying!

[gsands] 27/10/2008 17:54

Without looking it up for the exact figure, around 8%

[dmeek] 27/10/2008 17:34

Can anyone tell me what the average rental yield is on the MAY properties. As outlined above in this thread there must be a level at which the rental yield supports the asset value.

[m.t.glass] 27/10/2008 15:38

(ignore - query resolved)

[cougaruser] 27/10/2008 11:22

Tourist07,
Please explain what you mean by 'vulture funds' and 'done deal'. Are you suggesting a fund taking the company out at a low price? or vultures picking over a dead carcass, as in 'belly up'. I realise this can only be IYHO but am interested to hear your views if you have the time. TIA

[gsands] 27/10/2008 08:33

rochdale,

You and virtually every other holder of any listed stock must be thinking the same.

All stocks have been in virtual free-fall.

[rochdale] 27/10/2008 08:24

beginnnig to think I called this one wrong - I know we are in uncertain times but the fall of late has to be related to cash problems and news that is not currently in the public domain

[m.t.glass] 27/10/2008 08:13

shambolic MAY pricing on Level 2 again.. spread 250-1120 at the moment (no sell orders except dated weeks ago)

EDIT: Normality restored now for a while. But almost guaranteed to be wrong again afore long.

[nashwan123] 26/10/2008 20:11

gsands

You ask what evidence I have for HMRC office closures. Several as I work for them they are restructuring through a program called Work Force Change.If you don't believe me just ask HMRC or someone who works for them. There are campaigns going on all over the UK where the union (PCS) is campaigning to fight wholesale office closures.Over 25 thousand jobs have been cut thus far with more to come. The FT reported this weekend that traders are waiting up to 3 months for payments from HMRC that should be settled in 4 weeks. The answer is too many job cuts. So Mapeleys share price crash is not just credit crunch but simple business fundamentals.

[gsands] 26/10/2008 10:09

Re LTV - it is possible that my lender could tap me on the shoulder in 12 months time to talk about the LTV on my borrowings. But providing I am meeting all my payments on time, I suspect they'll probably have more important things to get on with. We shall see.

[gsands] 26/10/2008 09:59

Yes - I suppose I am talking my own book. But as a landlord myself it's easy to do.

All I can say is that I am grateful that my property company is not listed and I can avoid the worry of a daily falling share price.

The reality of my business is that my rents are cheap, my properties are 100% let and my borrowing rates are falling (I am on a base rate tracker).

In 12 months from now I will probably be drawing a bigger income from my business than ever before, because I have been able to increase rents gradually over time and the base rate will probably be 2% - so my borrowing interest will only be 3.75% (the lowest it will have ever been).

Meanwhile people run scared over asset value. Yes, the value of my freehold buildings has fallen. But I never really cared about what they were worth in the short term anyway - I just hope that by the time I am 65, they are worth a bit more that I paid for them.

[jonwig] 26/10/2008 08:16

GS - I have to admire the terrific job you are doing of talking your own book.

The only scenario which supports you is that there are forced sellers in the market.

Quite a number of property companies have been buying back their own shares this year to absolutely no avail. MAY would be better to conserve cash in the face of paying over 12% for their next slug of debt.

Incidentally, if Fortress is a seller, fewer than 3m shares sold would trigger an RNS (ie. 1%).

[tricky1992000] 26/10/2008 01:25

it's a bit risky investing here for the moment

1) don't know how far this share has to drop before an opportunistic bid comes in, it would be good to see some horizontal.......

2) abbey have just aquired the branches of 2 other banks (bradford and bingley) and (alliance and leicester)...... i can forsee a consolidation of branches, and mapeley might end up with some empty properties........

[gsands] 26/10/2008 00:30

A share buy is the best use of company funds at the moment. Better than any return they could currently get in the property investment market. Equity is being undervalued IMO.

Less shares in circulation means each investor holds a larger piece of the pie. Each investor receives a larger dividend without the company having to pay out any more cash.

SP is supported at a higher level meaning that future share placings could be more viable.

Re asset write downs: writing down the asset pushes up the yield.
When base rates are 1-2%, property yields of 5% will look good. I don't think Mapeley's assets will be written down much further.

[jonwig] 25/10/2008 16:47

A couple of pints:

(1)they may be able to launch an unexpected share buy back, in which case the share price could perhaps gap up 20-50% one morning.

A share buy-back would increase NAV per share, but it would decrease NAV. It would be seen as a sign of desperation, not to mention encourage more sales by distressed holders, one of which might be Fortress. No point.

(2) On a 25% hit at gross level:

GAV ... £2230m ===> £1670m
Liab .. £1750m ===> £1750m
NAV ... £ 480m ===> £ -80m

Banking covenants breached well in advance, results re-negotiation on penal terms.
What terms are those?
Well, look at the delta facility (£60m due April 2009) terms:

£60 million corporate loan guaranteed by Mapeley Limited repayable in April 2009. The interest payable on this loan is at 3 month LIBOR plus a 5.0% margin.
That rate is eye-watering penal, and will be repaid from their £52m of free cash together with about a quarter's FFO.

Then look at the LtVs quoted on their loans: 70-75%. These will be breached, and renegotiated at higher rates. Whilst MAY will survive, there will be no free cash-flow left for dividends.

Anyway, Q3 results in about 3 weeks should make things clearer.

[gsands] 25/10/2008 16:17

LL,

I see it the same way as you do.

Probably my biggest worries are:

1. The company being taken over at these low levels, thus crystalising the loss for investors, before a recovery can take place.
2. Difficulty in refinancing when the first of the large loans comes up for renewal in 2012 (because of the LTV problems you highlight).


Secondary worries are:

1. One of their lenders suddenly deciding to excercise a LTV covenant.
2. Void problems in their direct investment portfolio.
3. Santander changing their game plan re. high street banking branches (Abbey)

I believe that when the £60m 'loose' borrowing comes up for renewal in April next year it will be paid from retained cash. However, should (by some miracle) the lending situation improves by then, and they can renew it on favourable terms (possible if base rates are heading south) they may be able to launch an unexpected share buy back, in which case the share price could perhaps gap up 20-50% one morning. Could be the 'event' you anticipate.