Medsea Estates Share Discussion Threads

[abraxas1] 15/1/2008 17:42

Medsea have pretty much abandoned Spain anyway as its a dead duck

75% of their clients this year are In Calabria, Italy

[yf23_1] 14/1/2008 15:46

pig in a poke

[blank frank] 12/1/2008 19:00

Report from the Telegraph yesterday. A British couple have just been the first expatriates to have their Spanish home demolished:-



B.F.

[damanko] 31/10/2007 20:07

Yes, I saw that article in the Times. Most of the Medseas properties I have seen in Spain have been well inland though. And to be honest there would be national & international uproar if the Spanish government did what they are threatening. Also - I think its correct to say that the Madrid government would need the agreement of each regional authority. The whole thing seems unlikely to me. Doubt that 5 billion Euros would be aywhere near enough, just look at any part of the Spanish coast, and think about the scope/scale involved.

Still reckon (per my earlier post) that Medsea looks interesting, but will wait and see what develops. Could be further to fall, given debt problems here (ie Medsea's main market in terms of prospective buyers) - as well as other parts of Europe.

I feel that basically the company is probably sound. Just a feeling.....

[blank frank] 31/10/2007 19:32

Reclaiming the coasts
October 29, 2007 | National News

Government spends five billion euros in demolishing coastline constructions

"THOUSANDS of homes are to be demolished in a revolutionary new plan to save Spain's coastline.

Dozens of hotels and other constructions – such as plastic greenhouses – are also to be knocked down in the five-billion-euro scheme.

The move will remove buildings from 800 kilometres of Mediterranean and Atlantic coastline.

"Our intention is to negotiate instead of directly expropriating the land," the government's biodiversity secretary Antonio Serrano said.

The plan – which needs the backing of authorities in the country's 11 coastal regions – will see cement replaced with a one-thousand-kilometre network of footpaths.

"Without the support of the regions, it will not be possible to apply this plan. We have to convince local administrations that demolishing these constructions will result in the growth of quality tourism," Serrano added.

Under Spanish law, beaches are classed as public land. A further minimum area of 106 metres should be free of any construction.

However, central government only has authority over the sands with the remaining land falling under local authority jurisdiction.

The move is seen as a radical change in coastal policy, which has seen construction destroy large parts of not only the Mediterranean coast but also the Atlantic coast and Canary Islands.

A recent Greenpeace report found that an area equivalent to three football pitches of coastline is lost per day to construction.

In 2006 alone, almost one million new constructions were erected along the coast.

In some parts of Spain, the demolition of homes built upon public coast land has already begun.

Since 2004, 750 constructions have been removed, including 418 homes in El Sauzal in Tenerife last year."






The state of Spain's coast - Destruction at all costs?
July 9, 2007

"In its annual report into the state of Spain's coast, Greenpeace highlights the growing problems of construction, corruption and climate change on the country's ever-dwindling shores

THREE million scheduled new homes, 100,000 illegal buildings, 200,000 more hotel beds, 316 golf courses, 112 marinas and 90 cases of urban corruption.

Last year, Greenpeace likened coastal construction in Spain to "cancer" (the Olive Press, issue 3).

However, as construction has continued unchecked in the 12 months since, the above figures show the situation in 2007 is far worse. ... "

[nakedshorter] 27/10/2007 02:08

hoodless tip at 12p

[flateric] 12/10/2007 13:03

Isn't it about time this lot announced something with all that land they've got? The fundamentals on this one still look cheap, despite the Spanish housing situation. Imo.

[giddygoat] 05/10/2007 00:26

Yes Thanks Abraxas, Im more worried about when Medsea accounts for its business but its very helpful to understand the process.

E.g. It would be useful to understand if Medsea wait until receiving the commission from the developer before showing as an asset in their accounts.

Instead they may show as an asset (Debtor), when the developer has 2nd installment but before the money actually gets to Medsea. This is acceptable as the no. of cancellations must be low after the 2nd installment

However my concern is they show an asset (accrued commissions receivable) when the developer receives the initial deposit. This enhances the look of the Balance Sheet when of course there is a good chance people will change their mind before theyve paid their 2nd installment. Using this treatment begins to explain how erratic Medsea profits will be. Because its based on a guesstimate of how many will cancel this small co can be £1.3m out in a few months.

(After this the .)

[abraxas1] 04/10/2007 02:11

Just to clarify the commission situation

I am an overseas agent but do not have a financial interest in these,I was just browsing

The deposit is paid to the builder not medsea

At this point Medsea receives a commission notification from the developer of the amount of commission due when the customer pays the second installment 10-40% depending on country

When this is paid they bank their commission

If the customer cancels they do not earn a penny

Hope this helps

[tommyttrades] 03/10/2007 08:48

You might want to take a look at this.
Llanera operate in the same areas or rather they did operate in areas where Medsea are based.



Spain Real-Estate Co Grupo Llanera Seeks Creditor Protection MADRID (Dow Jones)--Unlisted Spanish real-estate developer Grupo Llanera said Tuesday it filed for creditor protection after it failed to make good on loans, signaling the weak state of the Spanish real-estate sector. In what represents the first major casualty of the Spanish real-estate downturn, the Valencia-based residential developer said it was unable to pay short-term loans to finance long-term investments in land it planned to develop for residential use, a spokesman said Tuesday. In a press release, the company added higher interest rates had made it more difficult for potential home buyers and real-estate developers to secure financing, putting the brakes on its new developments. The once red-hot Spanish building and real-estate sector has turned cold this year due to higher interest rates and as investors dumped real-estate and construction assets on jitters of a sector slowdown. Grupo Llanera also blamed press reports about the company's lack of solvency as part of the reason why the company was unable to secure financing. Market analysts have said vacation home sales, especially on the Spanish coast - where Grupo Llanera operates - are the areas most likely to be hardest hit by a slowdown.
Company Web site:

[flateric] 02/10/2007 11:56

This is another one that just needs a decent broker. The figures are much better than the price shows.

[cb7] 01/10/2007 10:37

giddygoat, if its not booked as cash then I would assume that those deposits are refundable, if non-refundable then that would go into cash.

[yf23_1] 01/10/2007 01:15

a pig in a poke

something that you buy or accept without first seeing it or knowing what it is like, with the result that it might not be what you want.

[giddygoat] 30/9/2007 23:33

Id been thinking we were being given good levels of details in recent updates but it appears like they store up the bad news in the hope it will go away.

If in doubt "blame the database" as per Interims. Now we can all have problems with technology as we get older but Im sure the man at the top should know prior to 3 months after the period ended whether profits will be up or virtually non-existent.

Looking now the accounting is well ropey IMO and the Chair is misleading us.
"revenues increase to £7,667,000 compared to £5,267,000 in the first half of 2006, an increase of 45%." - but theres £2.1m of extra cancellations included in that figure meaning a reduction in sales from last year and way down on H2.

CB7 - I will continue to hold. However although it does look cheap Im now very sceptical on their accounting particularly I need to understand the £9,579,000 of Assets described as "prepayments and accrued income" - Note 6 to Interim accounts. How do you see this? Would deposits received go straight into the cash figure and the rest of the House Sale price be immediately booked here?

[jwe] 28/9/2007 09:51

CB7-absolutely.But this is one for the brave which probably explains why there has not been one single trans action on results day-very unusual

[cb7] 28/9/2007 09:32

giddyg, it sounds like their results will never be transparent because of the uncertainty of the number of cancellations and therefore how much commission will be clawed back. They should only book a commission when a sale is completed, ie when it is certain and legal, rather than when an initial deposit is taken. Why dont they do this? OK receipts would be later but they would be accurate. Also the management have handled this very badly as they obviously knew of this problem ages ago but failed to advise shareholders until two days before results which is quite incredulous. Also the amount of lost commission seems very high indeed at 1.35m! Thats taken away almost their entire profit on selling 600 properties! How can that be when thay sold about 1080 in the whole of last year and already, in previous accounts, made provision for some cancellations. It begs the question then... how many did they really sell? Also if some were sold, cancelled and sold again, are they re-included for a second time in their figures? I have to ask myself, are they trustworthy, transparent etc and it seems not. Having said that, I agree that this could be cheap

[bluenose851] 28/9/2007 08:58

Generally a buyer has to pay a depposit of around 3000 euros to take a property off the market. Then within 2-4 weeks 10% must be paid. In most cases this is not refundable so losing a sale isnt the end of the world.

[jwe] 28/9/2007 08:53

I agree giddygoat.With cash in the bank of around one third market cap and net assets of around 3x current market cap.Providing this is a one off this share should have only one way to go from here-up..
I`m no accountant but the way they account does seem unusual

[giddygoat] 28/9/2007 07:59

Can anyone comment on their accounting treatment of sales? Guess when they get a deposit they treat full amount as sales. Is this normal practice? As looks as though werent completed by that point.

"At the end of each accounting period, the company accrues commissions receivable and payable in respect of sales transactions confirmed by payment of deposits by purchasers. However, not all depositors proceed with their purchase and so a provision for cancellations is made against the level of commissions accrued.
The provision is based on the pattern of cancellations experienced up until the
time at which the relevant financial statements are finalised.

The actual cancellation experience in 2007 for sales prior to 31st December 2006 has been significantly greater than that for which provision had been made, due to delays in property construction in Italy. It has therefore been necessary to adjust both commission receivable and commission payable to reflect these cancellations which might otherwise have been provided for at 31st December 2006. The impact of these cancellations is to reduce profits before tax by #1,350,000."

Other than this co's assets look good at first glance

[giddygoat] 28/9/2007 07:53

Interims announced. EPS amounted to 0.14p compared to 0.96p last year. Diluted
earnings per share are 0.13p.

In the first six months we sold 608 units against a budget of 603 and compared
to 424 last year. The value of property sold increased by #12.7M over the
previous year.

We have budgeted to sell a further 580 units in the second half of this year.
Currently we are on track to exceed this target.

Cancellations have wrecked these figures and IF this doesnt recur these are a steal at this kinda price.