Newriver Reit Share Discussion Threads

[spectoacc] 25/6/2019 17:50

Woody got to sell the lot - but who knows if Mark Barnett is the next domino to fall! What an overhang that would be - he's clearly already suffered some Woody-/performance-related redemptions.

[chucko1] 25/6/2019 16:14

Mikey, I agree. It will take some nerve to buy in packets on the way down as it goes in your face. But if you’re in it for the long term, and not overexposed, this should be a good one. Too much explanation of the fall on the fundamentals, rather than on the Woodford-inspired shorting. Once Woodford is largely out, the HFs will cut and you’ll simply earn 12% or so per annum. Suits me.

[mikeyfernandez] 25/6/2019 15:44

St james probs down to 3.5% after today and woodford got about 12.5% Will he have to shift all of that do we think? It will be interesting to see if and when the hedge funds start unwinding their shorts. At the moment they are sitting pretty and have got no deal insurance in the background.... I'm buying in small amounts on way down in tranches and then just holding during for a few years and see what happens..

[hpcg] 25/6/2019 15:11

INTU ready for a pause on the way down IMO; nothing goes down in a straight line. The ex-SJP mandate portion being eliminated now. Approx 171p my next buy area.

[spectoacc] 25/6/2019 14:44

Good points @hpcg, and not sure I'd be closing INTU short!

@fenners66 - I'd be first to say "well done" if you'd made money short NRR, but perhaps you see it as avoiding a loss? However - nothing in what you've said above is particularly relevant thus far. Sure - NRR dropped a few percentage points of NAV last results - but the share price performance has very little to do with how the co is performing, and everything to do with stock sales and overhangs.

Personally, I think INTU, HMSO, CAL are heading for D4E if not outright destruction. Yet I hold loads of prop co's inc NRR - tho most are warehouse-biased.

Interesting to see that once again, Woody saved further losses by redemptions forcing him out - he shifted a load of NRR onto Barnett in the 240's in April, and saved c.£180m of IMB losses by having to sell out what was his most liquid position at the time.

[hpcg] 25/6/2019 11:34

fenners - I would be more than happy to short any company, and was short DEBS several times and CLLN to the end. Just closed a short in INTU for example. This is maybe a short right now, but the downside is limited, perhaps 10%, up to 20% at most, and it will have to be closed in the market, which if people don't time the Woodford liquidity could end in something of a squeeze. When it is XD is certainly the right timing as one would want to close before the next XD.

[eeza] 24/6/2019 16:46

Meanwhile.....

Woodford works his magic.

[1fox1] 24/6/2019 10:14

Next is for poor people................What an arrogant little twerp you are

[zccax77] 24/6/2019 00:50

The cost of rent is less important since rent is only a small component of the costs in retail, what is more important is location and footfall.

[hpcg] 24/6/2019 00:05

It won't take much of a decline in rent for shops to be considerably more profitable than online platforms as Primark, Lidl and Aldi already are. With such an excess of supply it should be pretty quick to get there. Rents will continue to decline until excess capacity is removed. Thereafter an equilibrium should be maintainable, though upward only rent reviews will be a thing of the past.

[zccax77] 23/6/2019 21:12

The feel of 200s Italian woven fabric on the skin is something else. Shame the UK is no longer a leader after selling out to the Italians in the 80's.

[minerve 2] 23/6/2019 21:11

"I like Next but I think there may be a bit of spin on that. 5% per annum for 15 years would put rents at about 45% of their current level. I mean it's possible but the economic retrenchment it implies would put Next out of business long before their landlords."

Exactly, that was my point. Certainly on the traditional retail side, I would expect that to be the case.

[minerve 2] 23/6/2019 21:07

I have no idea on their clothes quality. I am talking from my experience of their corporate governance and transparency point of view and their consideration towards shareholders.

Most clothes are made in the same sweatshops in the cheapest flavoured labour country that's in fashion.

I'm not a dandy. Pair a jeans and a T-shirt is all I need for the day.

[zccax77] 23/6/2019 20:49

NXT, aweful quality clothes for poor people, one up from Primark. I personally prefer Hackett, the fabrics they use are alone worth paying for, stuff like Albini.

[minerve 2] 23/6/2019 20:36

I haven't read that part of the report but I would disregard the comment completely.

For a start, nobody can forecast that far into the future with any certainty.

If, indeed it seemed true, then that would be an average. There are lots of things at play around average. I would say NRR is not your average landlord because sqft rents are already well below average.

The next question is about the hypocrisy in that statement if it were to apply. Rents falling by 5% a year for 15 years suggest quickly dying retail parks which suggests quickly depreciating foot-fall which asks the question why would Next be so nutty to be forever increasing its long-term lease obligations if indeed this was the case?

The answer is this is an average which probably will never apply to Next nor NRR.

It seems to be that they want to attract a positive vibe for their costs but to the astute observer their comment is somewhat contradictory.

Just on off-the-cuff comment because I haven't read the text and so might have mistaken the context.

Next are a well-run company, for sure.

[zccax77] 23/6/2019 20:08

Have any of you read Next's annual report where they say they think rents will fall 5% per annum for 15 years, and they say retail parks are built on carp land. Seems crazy, surely retail parks are easy to reconfigure compared to shopping centres.

[fenners66] 23/6/2019 16:25

From Investopedia :-

The formula for FFO is:

FFO = Net Income + Depreciation + Amortization - Gains on Sales of Property.

FFO is not to be confused with a REIT's cash flow from operations,

FFO also subtracts any gains on sales of property because these types of sales are considered to be nonrecurring. REITs must pay out 90% of all taxable income in the form of dividends.


I put it to you that the first part of that formula is as susceptible to manipulation as any other accounting measure....

[zccax77] 23/6/2019 14:00

It is very difficult to manipulate cashflow unless you are B. Madoff, far easier to manipulate the accruals based income statement though.

[fenners66] 23/6/2019 13:48

I am sure there are ways of manipulating FFO especially in the nervous retail environment we are in now.

[zccax77] 23/6/2019 13:43

Look at INTU, they have suffered a write-down of £1.4bn, meaning they will have to makes profits of £1.4bn before any tax is due to HMRC. INTU and HMSO and to a lesser extent BLND and LAND will not be making any tax payments to HMRC for a while, it would make sense for them to retain cash in the business and start buybacks.

[zccax77] 23/6/2019 13:39

REIT's do not always have to distribute >90% FFO. Especially when they suffer massive devaluations and write-downs, the write-down means they will not have to pay tax until that deferred tax asset is recovered. I estimate that NRR will have write-downs at H2 due to yields moving out.