Matrix European Real Estate Share Discussion Threads

[kimboy2] 07/6/2010 14:11

I don't know why these type of companies bother with currency hedging. I would be perfectly happy just to take my chances on a Eurpean property play in euros, or I would at these prices at least.

I think the interesting thing may be the dividend. The operating cash flow looked pretty good last time, though IZD and the other properties they have sold are to come off that now.

With a reduced interest bill I would be hoping for at lest 10% pa.

[tim00] 07/6/2010 11:26

Just hypothesise that they liquidate nearly the entire portfolio to pay off bank debt - they're left with some cash and a large hedging contract liability. (They also have an income hedge that's out of the money, which they took out to secure the future value of dividends - which they then stopped paying altogether!)

[sleepy] 07/6/2010 11:18

A little hard to get my head around the concept that, other things being equal, the weaker the Euro, the higher the NAV!

[tim00] 07/6/2010 10:45

Note they were thinking of paying off some of the swap early, from the IZD proceeds. They've clearly decided instead to pay off bank debt - they're implicitly calling the euro lower.

[tim00] 07/6/2010 10:39

The company is over-hedged due to the contraction in its portfolio (both price falls and sales). It has a contract in place to swap euros 150 mn into £102 mn in June 2014, at current exchange rates that would yield a cash loss of £22 mn at that time. It will want to remain fairly liquid as a result, so that the cost can be met from cash rather than forcing a property sale. Of course, by June 2014, there might not be any loss at all! (There might not even be a euro!)

[sleepy] 07/6/2010 10:30

Thanks tim00 - much appreciated. How much of their Euro/Sterling exposure is now hedged?

[tim00] 07/6/2010 10:05

My current estimate of NAV is £3.20 per share: the rise in sterling against the euro is helping a great deal. Assessing recurring net income is tricky, given the large number of developments recently, but I estimate £4-5 mn per half-year, implying a yield of about 8% on current net assets of £115 mn.

[sleepy] 07/6/2010 09:41

As a newcomer here could someone who knows this company much better than I give their view on the current net asset value and level of recurring net income after finance and other costs?

[sand dollar] 07/6/2010 09:28

This company is doing everything right at the moment, just sentiment holding it back.

[affc21] 07/6/2010 08:51

Thanks for your tip Tim00, but fully invested elsewhere at this moment.

Just waiting for this (MERE) to get noticed, which is so mis-priced at the moment.

Management doing all the right things, with MERE now at a LTV of less than 60%
(based on the 31 December 2009 values), following this mornings news.

[tim00] 07/6/2010 08:26

Sensible debt management, gearing further reduced and interest rate savings brought forward. The lower interest rate margin on the whole debt stock implies a good rate of return on the "investment" of 18 mn euros in reducing debt. Next stop is the acquisition of the LBG shares, and a trading update on occupancy rates across the portfolio.

[karldinnel] 06/6/2010 18:44

Might look at it Tim00. Thanks!

Shame that MERE won't trade closer to NAV. I'd be happy to give up a few shares at a 40% discount to NAV and the lot for a 10% discount (always leave a little for the next guy).

[tim00] 05/6/2010 07:04

Note, I'm not a ramper by nature, I'm not posting this on any other thread. Feel free to ignore it, whether you buy or not makes no difference to me, but it is an outstanding opportunity, trust me!

[tim00] 05/6/2010 07:02

I don't normally tip shares, but for the benefit of long-suffering MERE holders only, take a look at PMHL, a Chinese conglomerate with interests in property, iron ore and cement. The businesses have value (somewhere between £1.50-£2 per share in total), the founder and majority share holder is a star performer after all, but the reason to buy is that the shares are currently trading even at a discount to their cash holdings (about £1.50 per share)! And the company plans to close the gap by buy backs (probably on the market, unlike MERE, though the method is not disclosed) as soon as its results are announced later this month/early July. This is a stated objective. The company plans to use at least £50 million (37p per share) to buy shares, though using only a small part of that will drive the share price substantially higher since the founder owns 60% of the 135 mn shares and he's not selling! A very strong buy, but DYOR.

[tim00] 04/6/2010 08:52

Sterling's rise against the euro to about 1.20 has knocked £14 mn off the deficit on the exchange rate hedge since the 2009 accounts, worth about 39p per share.

[lol short killer] 04/6/2010 08:40

Now you can sell at 122p atm. From this baby, I start to understand what's meaning of 'the only way is up from here'.


lol

[karldinnel] 03/6/2010 07:52

We heard you the first time, phil. Calm down!

[phil1969] 03/6/2010 07:50

Only 4.72% of the tender taken up.

not even the II's wanted to sell, is it my understanding that we could sell more than our 15% if other shareholders didn't take MERE up on their offer? It is a fantastic result that this obviously wasn't taken up by the II's either.

Excellent result, share price probably won't move on the news but it just shows how many shareholders are not going to let their stock go easily.

What will MERE do with the cash not used in the tender (£4.7M)?

Amounts to 13p per share. Special Divi perhaps?

[phil1969] 03/6/2010 07:50

Only 4.72% of the tender taken up.

not even the II's wanted to sell, is it my understanding that we could sell more than our 15% if other shareholders didn't take MERE up on their offer? It is a fantastic result that this obviously wasn't taken up by the II's either.

Excellent result, share price probably won't move on the news but it just shows how many shareholders are not going to let their stock go easily.

What will MERE do with the cash not used in the tender (£4.7M)?

Amounts to 13p per share. Special Divi perhaps?

[rabbrooks] 28/5/2010 15:38

The board and managers have a very small shareholding. They will retain their meagre holding which would hardly give them a good fund for their annual holidays so you can discount their decision.

[n1mgn] 27/5/2010 16:42

not me , i reckon lloyds may though , which i think is a good thing ,

[kramch] 27/5/2010 16:35

£12.95 with Barclays on-line, so paid for dinner! K

[sand dollar] 27/5/2010 15:54

Did that cover your dealing costs on the buy back ?

[kramch] 27/5/2010 15:36

tendered at 122 and bought back more at 120 yesterday, one's got to do one's bit for one's company! K

[affc21] 27/5/2010 15:31

Same here, not selling a single share, too much value here (as we are all aware and that includes: The MERE Board and the Manager who have confirmed that they will not be tendering their own shares).