Palace Capital Share Discussion Threads

[baner] 05/5/2023 10:02

Poacher - spot on. In fact, if they can buy back say 10m shares @ 240p, this will leave Eq of, say, 133-24= 109m or 320p/share - and so on……R30;…a further 10m at 260p and the NAV increase to 345p…………and so on……R30;….another 10m at 280p and NAV goes to 390p………..it is not going to happen overnight, but meanwhile there is a good and secure dividend income on the shares. Those who stay in for the last distribution/buy back may well end up north of 400p.

[nickrl] 05/5/2023 10:02

Two of the loans are fixed for term so presumably will cost to liquidate early. The other three are SONIA+margin which should be largely eliminated from the disposals and interest charges saved on these more than covers the lost rental income. So divi is still covered and with at least another 5m to come from HQ as well leaves things favourable.

If the strategy is complete rundown thats going to take a while yet as im not sure whats left would be attractive to any single buyer now unless well below NAV.

[poacher45] 05/5/2023 09:48

They have also improved there energy efficient certificate which I feel will save them a lot of cost in future years. With cost savings, Directors wages savings and further sales at Hudson Quarter the future looks a lot brighter.

[poacher45] 05/5/2023 09:40

konradpuss I think the Hudson Quarter development was right for York. A load of students would have been a bad idea. It looks smart and it has been very successful.
I would suggest that now is the time to make tender offers for shares which would be an easy way of increasing asset value quickly.

[eezymunny] 05/5/2023 08:43

Most of what's left is offices plus a bit of leisure. Goodness only knows what happens in the office market with every lazy sod "working from home", 4 day weeks etc. Discount not big enough to excite me here but can't help feeling I'll miss out on a modest gain.

[baner] 05/5/2023 08:40

Elsa

192-59 = 133

133/44 = 302p so discount rather nearer to 30%. As the company will continue to sell assets and pay proceeds out to shareholders, 220p should turn into 300p plus = 36% plus profits from buy backs and a good divi on top of that. Rather attractive.

[elsa7878] 05/5/2023 08:17

Property value £192 million (assume to include the sold properties announced today as valuation was at 31/3).
Equity £94 million
Debt £59 million.
Discount approx 20%?

[baner] 05/5/2023 07:56

Excellent news this morning. Sales price strong and gearing now very low with further reduction in the pipeline. This means the company can now accelerate its buy back program. NAV by march 2023 should be just north of 300p so buy backs at the prevailing share price is of course a no-brainer that will increase the NAV for remaining shares. The risk/reward is really sound, with a well covered dividend and then the upside in the capital value on top of that. Clearly the new BOD is delivering here.

[alders15] 24/4/2023 18:25

I do not think he is the retiring type.

[konradpuss] 24/4/2023 18:09

baner, I only wish Sinclair well for a long and happy retirement!

[alders15] 22/4/2023 07:33

I have held shares since the early days. Sinclair drew no salary at the beginning in 2010, drew a small one in 2011 and waited until they did the very profitable Quintain deal in 2013 before there was anything meaningful. At that time he put in a quarter of a million pounds of his own money and then further monies when they acquired PIH in 2014. If you look at the records he also bought further shares in the open market.

Sorry, but someone has to defend him against these inaccuracies, especially as the current Board have hardly any shares. On his leaving last June, the Investors Chronicle commented that he left the company in good shape. Why the criticism?

[nickrl] 21/4/2023 21:00

Sinclair never bought shares on the open market not that he needed to as he filled his boots every year with very generous share options but guess that was his prerogative as the founder of the company.

[konradpuss] 21/4/2023 19:17

Oh! and a very greedy one at that.

[konradpuss] 21/4/2023 19:15

poacher, I wonder what the opportunity cost has been of the 'Hudson Quarter' in respect of perhaps a smart 'industrial' trade or a 'PBSA' investment?

Plus development is extremely risky. O.K. they have passed the development risk.

Old Sinclair was and is a Dinosaur.

[alders15] 21/4/2023 14:54

How do you know he was going to buy more office buildings. My antennae at the time told me that they were building a cash pile to take advantage of distressed opportunities that were coming. Distress has arrived, so the opportunity has been missed. You refer to the strong cash flow. Who do you think created that in the first place. I have just had a look at what happened last April, when after the Trading Update was issued , the shares rose to 297p within a few days. Yes values have fallen but are you happy at the shares being at 214p? Only one member of the current Board has any shares and that it is only 15,000. Not an attractive proposition.

[baner] 21/4/2023 08:24

Sinclair was very negative for the company - wanted to use proceeds from York sales to invest in further Office buildings etc etc - all in order to allow him to continue to milk the company. Total admin costs were horrendous with a large portion ending up in Sinclairs own pocket. Rest assured the NEDs were ousted (”encouraged to leave”)as was Sinclair and Starr. With strong cash flow, lower central costs and proceeds from continued sales of properties Palace will be in an excellent position to further increase its NAV by buying back shares in the market. The new BOD clearly is looking after the best interest of all shareholders. Sacking Sinclair was the best thing that ever happened to shareholders.

[poacher45] 21/4/2023 08:23

He must have been blind when he saw Hudson Quarter then konradpuss.

[konradpuss] 20/4/2023 20:36

Alders, that was a different market.

Sinclair had no vision.

The clever money is generally made in special situations, Sinclair was a generalist.

[alders15] 20/4/2023 18:53

I do not recall any announcement that they were forced out by other parties. As for the dividend cut soon after lockdown happened, this was no doubt a Board decision, of which Sinclair was only one person. In addition the Non-Execs were in the majority so maybe it was them. Finally as for the remuneration of Starr and Sinclair, this was set by the Remuneration Committee chaired by a Non-Exec.. The company reported £5m profit on the sale of the 14 buildings and nearly £4m on the sale of the apartments at York. Sorry on this performance I have no problem with what they were earning. Pay peanuts and you get monkeys if you get my drift.

[nickrl] 20/4/2023 12:53

@ALDERS if they were that good they wouldn't have been forced out by other parties. I was in here big time when Sinclair was running the show and had several email response from him but lost the faith when i saw how much him and Starr were taking out of it and were quite happy to cull shareholders divi during covid but not their own pay.

[alders15] 20/4/2023 11:41

nickrl- What do you mean by Sinclair fantasy land? Take a step back. When he left and Richard Starr soon after him, they had sold 14 buildings at 20% above book, sold 80 apartments at York allowing them to repay the bank and so accumulating £30m in cash. Sorry but this looks pretty clever and forward looking to me. They created the circumstances that has allowed the company to weather the economic storm and to be in great shape. The current Chairman did not arrive until January 2022. Credit where it is due please.

[poacher45] 20/4/2023 09:33

Also I forgot to add it will save £11000 on dividends which is more than the 6.28% loan interest saving.

[poacher45] 20/4/2023 08:55

nickri so you would rather save 6.28% on £160000 approx than buyback assets at least on a 50% discount. Also bearing in mind the cash flow coming in from the Hudson quarter. I expect the new directors to announce that with admin savings, directors inflated wages savings and property sales the future for Palace looks good.

[baner] 19/4/2023 21:03

thanks Conrad - i am not too worried - still expecting NAV at 300+, with very comfy gearing.