Newriver Reit Share Discussion Threads

[candid investor] 26/9/2020 20:36

Should..my point was a general one rather than a direct path ..however, it's not entirely inconceivable in today's situation ...£100 million sales reduces debt to £463 million approx...reducing NAV to £1100 million = 42%. Even assuming a further asset devaluation then new asset value is £825 million increasing LTV to 50%. Then deciding to buy back up to 20% of share capital at say 60p per share cost and extra £36 million increasing LTV 60% is still compliant...for safety

[essentialinvestor] 26/9/2020 15:57

Might be worth noting NAV discounts across the sector are blowing out.


You can now buy diversified REITS on LTV's under 30%, still paying dividends

at 40% plus discounts.

[dhoult12] 26/9/2020 13:09

Candid you seem to ignore the LTV. Or to be exact you state.

-banks should allow banking covenants to be broken for a year...

And

-they can or should use cash for share but backs no less.

If you are a bank, your client sells assets your loans are secured against and then uses the cash for share buy backs and then breaks your banking covenants.. How forgiving will you be???!

Cash from asset sales will reduce LTV. Has to. Other option is a raise at this level ala Hmso which would be devastating for shareholders

[chucko1] 26/9/2020 12:58

They were right to be as prudent as they have indicated. Mark Davies (boss of Hawthorne) was being interviewed on Sky yesterday, and he was spitting blood about the idiocy of the 10.00pm curfew. Well, he would do that, of course, but said that the 20% of non-viable pubs would grow to 40% or even more as a result of this action. Never to return as businesses. Sounds dark, but far away from terminal and the imposition to us shareholders is mainly one of having a long, long slog to the other side. But the excellence of the management and current strong capital position (which they seek to strengthen further via disposals) will likely be the determining factor.

Tuck them away. I have added slightly on this renewed weakness.

[candid investor] 26/9/2020 12:21

Ok lots of misconceptions going on here so let me correct them...first and most importantly, lots of cash and loan facilities so let me explain why ..NRR has an incredibly high margin so even in worst case scenario and net income of £90 million was reduced by 50% due to the pandemic there is no requirement for cash, since interest and admin only require £45 million (even ignoring furlough scheme benefits for admin costs)....secondly NRR selling £100 million of assets so they should end the year with more not less cash. Asset revaluations don't need any extra cash BUT any further Negative revaluations (i.e. devaluations) will have an adverse impact on NRR ..if these contravene covenants then I think that the lenders will temporarily waive them..next benefit is that all or any profits are TAX FREE. plus we have to get at least 90% of those benefits as dividends which remains a huge benefit to us as shareholders...if there are no profits on a UFFO basis then we don't get dividends BUT likewise NRR don't part with cash..very important this next point.if NRR make and cash profits we get them not NRR, likewise if they don't make any cash profits then they don't need to pay out any cash to us so in either scenario NRR are not better off not worse off...think about that . With asset sales they will end up with more cash, likewise with asset purchases they would end up with less cash...speaking personally and with the share price so low they should BUY back shares with sales proceeds, absolutely no need, (or would it make any sense to issue more shares at these prices..might of course issue more at a later date at a higher price once this pandemic is over and resume their asset growth programme. Too much to take in, I realise. I will explain the share buy back strategy another time..other options availabl with new asset purchases is via JV sharing capital costs which they are already on to..finally it is time to repurpose assets although not right now.

[gbjbaanb] 26/9/2020 03:11

Go back through the contents here, there was talk of how much cash they have to hand. IIRC they had enough to keep going into 2021, and of they're hoarding dividends then that may last longer.

[trikytree] 25/9/2020 16:15

Thanks LG. I don’t currently hold any REITs but they’re all looking very cheap atm. For good reasons though I guess. Are NRR likely to be needing to raise cash to get through this? A rights issue at these prices wouldn’t be pretty.

[lord gnome] 25/9/2020 16:10

The last two quarterly dividend payments have been missed. No dividend until further notice.

[trikytree] 25/9/2020 15:57

Is NRR paying any dividend at all at moment? Ex div in 20 days apparently? I’m assuming dividends suspended? Thinking of buying in here. Seems cheap.

[dhoult12] 25/9/2020 07:28

It's increased from 3 to 4%.

However that's transact which is a platform. So made up of who knows how many individuals etc. Like having HL file a TR1. They appear on the register so need to file one when the % shifts but are certainly not the underlying holder who would be a lot of individuals

[diggybee] 25/9/2020 06:11

Increased to 4% from 3% I read?

[candid investor] 25/9/2020 00:17

Don't understand what you mean...I read it that they had significantly reduced their holding ?

[tole] 24/9/2020 09:08

Shorts closed and now IntegraFin Holdings increasing their holding this should be a good sign.

[candid investor] 22/9/2020 21:18

Yes they did close out their short...it was a short term stealth move in and out..I was relieved to see their short position closed because that implies that no longer sufficient profit to be made from their perception of the additional risk..

[tole] 22/9/2020 19:02

Millennium closed out their short the other day.

[dhoult12] 21/9/2020 22:34

Maybe already priced (yes apologies famous last words) in given pub co collapse today, even weathersooon was down 10% but 10pm shut for pubs.

[waterfall city] 21/9/2020 22:07

Yes what price today for a shop, they definately exited at the right time.

[chucko1] 21/9/2020 20:01

Perhaps, but with the hindsight of knowing there was going to be a pandemic?!?

[waterfall city] 21/9/2020 19:28

Perhaps local shopping REIT had the right idea,sell off the property repay debt and return what's left to shareholders.

[chucko1] 21/9/2020 14:53

PLUS do now report in a more detailed way, but I would not read a cause and effect into that given everything that has gone on. In fact, the poor reporting and misunderstanding of what it meant was a reason to buy what had become a vastly undervalued stock.

Intentional and material omissions is another matter altogether, and there has been some anger about this on ADVFN re. REITs. Misplaced anger, IMO.

[fenners66] 21/9/2020 13:19

I did have a big go at Plus , it fell lots more after that (about 40% if I recall) and since has rebounded gloriously.

I have not read their recent reports - have they fixed the reporting issues?

"or even mere satisfactoriness) of a business. " - LOL

Of course not - you do not point out the flaws to a prospective buyer.
How many businesses have been sold at the top ?

[chucko1] 21/9/2020 13:05

Fair enough, but you also had a big go at PLUS!

Everyone accentuates the positive, and investors generally discount accordingly. On average, people discount too much in both equities and credit. Over history, credit spreads have paid three times the actual losses suffered. Equities have performed better than this, and I have yet to see a prospectus indicating the uselessness (or even mere satisfactoriness) of a business.

[fenners66] 21/9/2020 12:38

chucko1 - I had a moan about the spin in DX Groups results on Thursday morning, so its not just having a go at NRR.

Their share price was up at the time.... its declined about 20% since then.