Mountview Estates Share Discussion Threads

[jonwig] 18/12/2014 16:22

I think you can get a consistent pattern here: no family successor willing or able for CEO, established market gradually drying up, debate on future strategy (diversify, sell out, run-off), break up of concert party.

So far they have been shrewd and conservative in what they do, and staff turnover has been minimal. Diversification wouldn't be a suitable move,I think.

They had headhunters searching for a CEO, and maybe lack of progress is down to these strategy disputes. What's the saying? "The Mountie always gets his man". Maybe not in this case!

[eggbaconandbubble] 18/12/2014 16:18

Barring those few who have bought in recently, every shareholder is now stiing on a handsome profit, so it does beg the question...Now what?

[chri5 wright] 18/12/2014 10:29

jonwig. Thank you, yes of course the tax is only CT, not CGT, silly of me, thank you. I really cant see Grainger having the fire power, or the access to a lender that would be of help - as I say, Ii have been wrong before, and what do I know.

I could see Aviva, or daft as it sounds British Land. Not Land Sec however.

I agree strange re the ''hunt'' for a CEO. Given its a family business, you'd have thought it would have been a shoe in, from someone who had been groomed. Delay may mean that the hunt is unnecessary?

I hope not, as I don't seen a suitable new home for the funds I have in Mountie....

Chris

[jonwig] 17/12/2014 14:42

chri5 - tax is CT at 20% forward, not CGT, but -yes.

I was told at the AGM (by one of the auditors) that the valuation would be on an "as seen" basis - ie. pretty run-down (or "sub-optimal" to be more subtle). So you'd have reversionary value on refurbishing and sale. (How much - have no clue!)

As for Grainger, they are the biggest (or only) quoted company which does the same thing, and again they were mentioned informally at the AGM by one investor. I really can't comment on their appetite or abilities.

The value of run-off over a period for smaller investors such as me is that dividends would be tax free but a cash sale would lead to a huge CGT liability.

And no CEO appointment, despite the statement that they are looking hard.
Strange.

[chri5 wright] 17/12/2014 11:59

thanks, I looked at the old posts. I really cant see Grainger having the fire power, or the ability to raise funds. But ive been wrong before. I hope I am this time, as I do hold quite a few Mounties, and have done very well( most unlike me, as I usually miss the boat).

[chri5 wright] 17/12/2014 11:55

remember that there will need to be a discount to NAV, as tax will have to be paid on any asset sales.

intrigued, why is the notional £ 160 per share too low? - what figure is about right?

[jonwig] 16/12/2014 18:44

chri5, who would bid? See posts #103, #110 for suggestions.

Alternative - run-off with return of capital. Doubled interim dividend suggests this might have started.
Earnings will accelerate in the near term (tenant mortality) but tail away as profits are realised.

Remember, restatement of trading properties doesn't include any further reversionary value on vacant possession. So notional £160 per share is too low.

[chri5 wright] 16/12/2014 16:49

but who would bid? - a pension company - Aviva properties maybe?

[eggbaconandbubble] 16/12/2014 15:54

Looks like the bid's on the way, so that all the ageing major shareholders have an out.

[rizzle] 16/12/2014 15:18

Nice article - can only help raise awareness of how this is still looking undervalued:

[brahmsnliszt] 16/12/2014 14:16

Wow. Loving this ride

[chector177] 12/12/2014 23:15

I'm lovin it, lovin it, lovin it!!!!

[eggbaconandbubble] 12/12/2014 16:24

Looks like people still willing to buy. Looking at the trade prices, It looks like even those marked down as sales are most likely to be buys.

[jonwig] 05/12/2014 08:52

It will have helped. Buyers of lower-value homes will pay less duty.

But I think we're in the middle of a serious re-rating of this stock, which will only be dented by a house price crash.

[eggbaconandbubble] 05/12/2014 08:12

Jonwig, Do you think slight upward movement last two days anything to do with George's stamp duty?

[eggbaconandbubble] 02/12/2014 12:36

"This is doin me 'ead in".
But we're looking good. Right? Under valued, and the share price is moving up again today.
TP £1.10?

[jonwig] 02/12/2014 09:11

No, just their trading properties were revalued.

Go to the balance sheet, find the trading properties (£317,651,000) and add £348m to it.

When you next see a balance sheet (at FY stage) the revaluation won't appear, as it's off-balance sheet. IFRS demands current assets at lower of cost and current value.
So you'll need to do a separate calculation again.

It's irrelevant to the calculation, but borrowings aren't £89m: look at the liabilities section of the balance sheet.

I suspect you're looking at a third-party source instead of the company's own numbers.

[eggbaconandbubble] 02/12/2014 08:57

Allsop valued all the properties they have at £666m.
They have debt - borrowings of £89m
Ergo basic net asset value is £577m. (666-89) approx. £148 per share, in theory. Something a bit less in practice.

Where does your £318m figure come from?

[jonwig] 02/12/2014 08:35

Stated by company in header to H1 results.

Alternatively, divide balance sheet equity (£276.4m) by number of shares (3.9m).

Then go to balance sheet and, add £348m to equity and repeat the calculation.

[eggbaconandbubble] 02/12/2014 07:58

OK, not totally disagreeing with you (yet!) but where do you get the figure of £71?

[jonwig] 02/12/2014 06:45

egg - no, the net asset value has risen by £666m - £318m, or £348m. This is £89 per share.
So NAV rises from £71 to £160 per share.

[eggbaconandbubble] 01/12/2014 20:42

£666 million less net debt of £89 million = £577 m or £148 per share. Less costs of disposal etc. etc.
Still good value at £92.

[jonwig] 01/12/2014 20:14

A brief comment in IC, with the conclusion:

The shares rose over 6 per cent on the news, but still trade 42 per cent below the book value of £160 a share that has emerged from the revaluation. Part of that discount is deserved: the Sinclair family control Mountview's shares tightly, so the value cannot be crystallised by takeover. But it still suggests considerable upside for long-term shareholders. Buy.

Of course, some of the family may be courting a takeover!

[jonwig] 28/11/2014 08:40

Or be taken over?

They've just done some free due diligence for a potential bidder!

There was some discussion of your points around AGM time - post #100 onwards.

[eggbaconandbubble] 28/11/2014 08:18

Thank you. That all makes very good sense and understanding of the company.
From that, what is clearly happening, is that the original business concept of buying up these tenancies is fast disappearing and now going out with an acceleration of profits, till the final drop off.
Hence I can understand certain shareholders' (or spouses thereof)concerns on the future direction of the company, and indeed their apparent difficulty in recruiting a replacement CEO(?).
Maybe they will wind it up or go into run-off as you put it.