Palace Capital Share Discussion Threads

[baner] 26/7/2023 08:20

Excellent Update - going from strength to strength. NAV now in excess of 300p and will increase gradually from buy backs at a discount to this. There is a really good chance we will see 350p coming out in cash to patient shareholders - maybe within 18 months. Meanwhile, there is a good dividend, albeit this may reduce as a result of asset disposals. That is however a positive as further disposals takes us closer to the final pay out. Clearly the BOD totally focus on the best interest of shareholders here.

[konradpuss] 23/7/2023 14:32

'flock together'.

[alders15] 23/7/2023 14:00

"Birds of a feather" What does that mean Konradpuss?

[nickrl] 21/7/2023 11:52

@konradpuss im no longer in here although ive noted how resilient its been over the last couple of months compared to others. Another irony the other thats held up is RLE seems having BoDs that take out a disproportionate amount compared mkt value does no harm!

[konradpuss] 21/7/2023 11:06

Nick, I am always surprised at how few folk go to AGM's.

I am not a shareholder here any more, however if I was I would be going to the AGM.

I know, I know, that the small shareholder (you might have a large holding) does not have any voting clout, however there is nothing like 'button holing' an CEO or finance director.

[konradpuss] 21/7/2023 09:44

I wonder if Mark Kleinman is related to our old 'chum' Neil Sinclair?

Birds of a feather and all that.

[alders15] 21/7/2023 09:27

I have just noticed an article by Mark Kleinman, the City Editor of Sky News in City AM last week. He refers to the fact that Steven Owen's salary doubled as NAV shrunk together with a Boardroom exodus.

He refers to alleged conflicts of interest and his financial incentives for the sale of the company's assets. He stands to earn an additional £1m, where he is already earning £221,000.

He should abandon delusions of grandeur and focus on delivering for shareholders.

When the CEO left, NAV was 390p. It is now 296p and the shares are languishing at only 233p, which is only slightly above what they were, when the shares were readmitted on October 2013.

What a disaster this has been but as Abraham Lincoln said "You can only fool some of the people some of the time"

In essence shareholders have been short changed and all the Chairman is focusing on is himself and what are these conflicts of interest?

Conduct unbecoming of a listed company.

[baner] 20/6/2023 09:01

Thanx Nick - this is probably close to the actual outcome and the divi is likely to be well covered - there should also be further potential to cut admin costs. Personally i believe there will also be some increase in the rental income from the retained properties - taking us a bit over 100%. But again, in large we are in agreement. And you are right, paying down the debt is indeed sensible and in that respect PC is in a good position - it does not take them much of further disposals to turn debt free.

[nickrl] 19/6/2023 22:26

@Baner The recent industrial sales has surrendered 2.2m + Gosport Aldi 0.3m in rent but as I say offsetting this is reduced o/h's and lower interest costs as debt paid down but that is incurring early redemption fees. My assessment remains that divi cover is c95% but im content that Hudson sales are used to balance the books as they were worth 8m at FY23.

Given the bulk of the debt is now floating paying it down in the current environment is eminently sensible.

Note given fluidity on debt levels and exact run rate on o/h's my forecast is within the margin that could swing it to be more than a 100%.

[baner] 19/6/2023 15:49

Nick

They do not need the free cash from HQ to support the divi. Check the numbers again pls.

[baner] 19/6/2023 14:54

Alders

I am now convinced Boris will return as PM!

[spectoacc] 18/6/2023 18:45

Believe +0.5% is expected now, particularly with the long gap to the next meeting. Who knows tho - there's been a couple who keep voting for Unchanged!

[nickrl] 18/6/2023 11:58

They need the free cash from Hudson Qtr sales to support the divi now post the recent industrial sales losing at least another 2m of NRI. They are doing the right thing driving down the unprotected debt though some of which will be at 7% when we get next weeks expect 0.25% rise.

[konradpuss] 17/6/2023 15:29

Alders, spot on.

Before the market reprices their remaining investments they should hold a 'liquidation sale'. People love sales.

I see Peter has not added. That is telling.

Things are going to get much worse in later 23 and 24 in my humble opinion.

[alders15] 17/6/2023 14:25

Wake up Baner. These results are awful. NTA down 25% even after the share buybacks, so it could have been even worse. They have sold the low hanging fruit too cheaply and the way they are going there is as much chance of 350p as Boris returning as PM.

Nothing other than destruction of shareholder value by a Board who are not up to the job, where two of them failed miserably at their former companies.

I like to back winners.

[makinbuks] 15/6/2023 10:46

If they intend buying back a further1m shares at £2.5m max they might have to be quick

[jbarcroftr] 15/6/2023 10:45

And while we wait we get a good dividend

[baner] 15/6/2023 10:40

NAV is already today in excess of 300p as a result of recent sales above March Valuation and then also buy back of shares at a good discount to the NAV. Rental income will increase so Admin costs not really an issue unless they sell a significant portion of the remaining portfolio - in which case buy back and distribution can be accelerated. Leisure properties value at 10%-ish yield likely to prove far too cautious. With continued disposals and buy backs following, NAV could well approach 350p again in a year or two. As this will be paid out to shareholders one way or another, the risk/reward is indeed attractive here. Well done to the new regime who really focus on delivering values to the shareholders!

[nickrl] 15/6/2023 09:54

FY23 out NAV down to 294p as expected as sales and revaluation effects kick in. Given another wedge of sales has been declared post year end presumably NAV fallen further so this one starting to look fairly valued. They will be using proceeds to bash down debt which bar a small percentage is now all floating some as high as 6.53%. At least this year we will see the impact of the reduced overheads but the more they sell down the more overheads become dominant again especially as the rump of the assets that are left will be harder to shift ie Bank House. Mind you still have c7-8m of HQ to shift which is free cash so debt will be well under control here in 12mths.

Not had time to listen in to presentation so will take a look later on.

[cwa1] 09/5/2023 17:00

Tipped by Thommo in the chronic...

Deep share price discount to NAV
The deep share price discount partly reflects the fact that Palace will have to commit significant capital expenditure to upgrade its assets to meet the Minimum Energy Efficiency Standards (MEES). That’s because 96 per cent of the portfolio has an EPC band rating A to D, but it is required to have a minimum C rating by April 2027 and B rating by April 2030.

That said, the portfolio has strong reversionary value as highlighted by 14 new lettings, 15 lease renewals and 16 rent reviews that generated £1.1mn of additional contracted rent in the 2022/23 financial year, or 11 per cent ahead of March 2022 ERV. Moreover, recent disposals have been made above carrying valuations, suggesting the ongoing asset disposal programme could surprise to the upside.

So, having last rated the shares a hold, at 205p, for their income and potential for capital upside when the market stabilises (‘Priced for a severe property downturn that’s unlikely to happen’, 24 November 2022), I now feel that the markedly improved debt position and more favourable market conditions for the asset disposal programme support a buy recommendation ahead of annual results on Thursday, 15 June 2023. Buy.

[konradpuss] 06/5/2023 12:54

I find it most amusing that if you visit the co. web site you first see a picture of a 'flash' office reception.

Then if you scroll down you are met by the following mug shots:-

CFO
Head of Asset Management
Head of Investment
Senior Asset Manager
Asset Manager
Financial Controller
FP & A Analyst
Company Secretary

This company is in work out/sell down mode.

They could work from a small sub-let office above an industrial unit in Park Royal.
It could be run with a book keeper, one surveyor, a part time finance director/company secretary and a CEO - probably a surveyor who could get his hands dirty.

[makinbuks] 06/5/2023 12:15

Totally, I am not in favour of buybacks normally but this is one instance where the case is clear. In fact once the variable rate debt is gone it makes sense to do buy backs rather than incur early repayment charges

[pdosullivan] 05/5/2023 17:35

I agree. For those of us who are more patient with our capital, a series of buybacks would be the most accretive outcome.