Property Recycling Share Discussion Threads

[cockneyrebel] 01/11/2005 18:58

Yes, was just going to post that affc21.

Also I notice they refer to 'see page 24'. I suspect this is going into the Growth Co Investor News Sheet that goes out periodically as they mention a page number and also the tip is rather lengthy.

I see they say of Rackman:

" He is best known as the founder of Waste Recycling, a group that floated with a £8.1 million price tag in 1994. Under his stewardship (as managing director, deputy chairman, chairman, and non-executive), and through organic and acquisitive growth, Waste Recycling became the biggest independent UK-listed waste management concern. It was eventually sold to Guy Hands' Terra Firma in 2003 with an enterprise value of £531 million."

Will be nice if he emulates that here :-)


CR

[affc21] 01/11/2005 18:41

Note that GCI have upgraded their last BUY rating (dated 14.09.2005.), to STRONG BUY for PROP,as pointed out by Tole.

[affc21] 01/11/2005 18:36

Tole,

Good find,bullish and interestig read.


link to Growth Company Investor PROP article:

[tole] 01/11/2005 15:29

Strong Buy recommendation on GCI today :)

[cockneyrebel] 01/11/2005 11:15

looks like a 50K buy moved it up earlier :-)

CR

[cockneyrebel] 01/11/2005 10:19

kryss - I would imagine that in the course of time, with so much waste business then Rackman will inevitably breach these sort of rules somewhere as it's such a hotly watched subject with big fines for even small breaches.

Definitely something going on here tho imo - up again today.

Breakout coming?

CR

[cockneyrebel] 31/10/2005 15:13

moving up today in the face of 30K sells - someone still accumulating imo

CR

[kryss] 25/10/2005 22:12

very interesting and very tempting but how is confidence in this company likely to be effected given that the MD has been found guilty of breaching waste management legislation in dumping domestic waste onto farmland?

On Oct 10th:

King's Lynn Magistrates Court, Anti-Waste and Paul Rackham Ltd were between them fined £46,000 and ordered to pay more than £78,000 in costs after admitting breaching waste management regulations and causing pollution.

I suppose the answer is it hasnt, but it would make me wonder about how clean the cleaned up land is going to be!

[cockneyrebel] 25/10/2005 21:16

One little thing - British Land trades on a PE of 26 !

PROP obviously much smaller and more volatile with big lumpy earnings but to the plus side growth could be much greater. With 8p eps in H1 you have to think that the rating is very undemanding for a property investment company.

CR

[cockneyrebel] 25/10/2005 15:31

Cheers Affc21 - I must have missed that.

Lumpy earnings but I reckon they can afford to earn nothing in H2 and still be cheap having done 8p eps in H1. Just 1p eps in H2 would make the PE 7, pretty cheap as these are not property developers as the name might suggest.

CR

[affc21] 24/10/2005 22:12

Press info (dated 14.09.2005.):

Growth Company Investor
Property Recycling
Companies: PROP
14/09/2005

Chaired by Waste Recycling founder Paul Rackham, Property Recycling acquires brownfield sites, improves the land through remediation, secures planning permission and then sells the land onto other developers at a profit. Rackham argues the use of redundant sites helps sate demand for development land in towns and cities, and is a growing market due to the public and Government aversion to the development of green-belt land.

Maiden interims to June, the first numbers following a £6.9m summer flotation on AIM at 50p, revealed pre-tax profits of £2.3m (losses of £532,000 last time) on sales of £3.89m. Profits were skewed by the sale of Property Recycling's Saddlebow site in King's Lynn for £3.5m.

Due to the nature of the business, Rackham warns future results will fluctuate depending on realisation levels. Nevertheless, Rackham says the figures demonstrate that Property Recycling can create significant shareholder value through the improvement of such brownfield sites. At the half-end, the group had net cash balances of £3.4m, excluding the cash that came in on the Saddlebow sale. More recently, the holder of an option over part of the group's Fornham Park site exercised its option over 2.71 hectares with planning permission for residential units – the £700,000 price will be 90%-funded by a Property Recycling loan secured on the property, repayable as units are sold off.

Under Rackham, Waste Recycling became the UK's biggest independent listed waste management play, growing in value from £8m to £531m in seven years, before its sale to Terra Firma in 2003. He will no doubt be hoping to work the same magic with this venture. Buy.

[cockneyrebel] 24/10/2005 16:02

Couple of 25K buys and 1 20K sell today - higher volume stuff than of late.

CR

[affc21] 21/10/2005 11:48

My first buy just gone through,may top up further at a later date.

Thanks CR,for highlighting PROP.

[cockneyrebel] 21/10/2005 10:53

I see these moved up yesterday despite a 25K sell.

CR

[cockneyrebel] 20/10/2005 22:42

yep, director buying too,

Looking at them it looks like they could make large profits in frequent large lumpy deals.

Nicely undiscovered at the moment tho as you say.

CR

[affc21] 20/10/2005 22:37

CR,

What P.E. ratio (assuming PROP carries on growing) would a company like this be on in this sector,are there any other companies out there in this bussiness and if so do you know what P.E. ratio's their on?

Sorry about the question's,but not invested in this sector before.

[affc21] 20/10/2005 22:36

Hello CR,
Nice find,

Also from the interin results:
* Cash balances of approximately #8 million which can be leveraged to
expand portfolio.

Net assets/(liabilities) £12,093,599.

On a market cap. of 22.4m (from ADVFN).


Looks interesting,but as you have said above,earnings are liable to be lumpy.

What makes it a plus factor for me is its a recent float (lack of interest through being largely unknown).

[cockneyrebel] 20/10/2005 15:06

A protected trade of 7.5K ? Stock must be hard to come buy if they need to protect tiddlers like that imo

CR

[cockneyrebel] 19/10/2005 08:04

Marked up again this morning

CR

[cockneyrebel] 18/10/2005 11:22

Thought I'd start a thread for this stock as there doesn't seem to be one.

PROP had eps of 7.99p in H1 alone which means, even with them earning nothing in H2 the PE is 7. I suspect there may be more to come in H2, in particular it seems a director might think the same too having bought 32K at 61p at the end of September.

Earnings are set to be lumpy - on their opening day RNS they say:

"Property Recycling identifies and acquires previously developed land ("PDL"), often referred to as "brownfield sites", where it can see the opportunity to improve the valuation significantly through remediation and planning gain. The Group particularly seeks complex sites which often require demolition of existing structures and treatment of contaminated land. Improvements include site remediation and optimisation of potential value through planning approval. The Group is not a property developer but will sell to, or enter into agreements with, such developers and other purchasers. It may also hold residual elements of sites where attractive income can be earned or longer term planning potential exists".

So share holders benefit from a reasonably fast turnaround on land, they are not waiting for property to be built. Seems to me with the margins and speed of turnaround here we could have a company on a lowly rating but one in the 'property sector' that is not hostage to the house market as are developers - PROP are looking to find brownfield sites, get the planning and site in a state where it can be developed then sell it on.

Looks an interesting proposition to me with 8p eps in the bag for H1 and a director recently taking a decent chunk. Lumpy earnings but if the PE is so low I think I can live with that.

They have around £7m in cash to work with so I'm expecting news of more deals in the medium term.

Worth a look perhaps.

CR

[energyi] 13/12/2004 18:55

it is possible...?

[rj allen] 30/9/2004 19:28

My best guess is Winter 2007: Maybe 35-40% off the top

[energyi] 04/7/2004 21:32

PART OF THE CYCLICAL PUZZLE
(posted on the Main Property thread):

trumpet - 29 Jun'04 - 14:04 - 28242 of 28576


Games,

Sorry for not being more specific, in a state of flux myself, following energyi's hedge thread closely though.

Here's a potentially very telling chart of London premium / UK average prices. (Posted on TMF board by Tonydero)

[energyi] 17/5/2004 12:00

From the VIEW thread

griss - 17 May'04 - 11:15 - 8041 of 8041

Persimmon said in April that demand for homes had remained strong however some believe that the company is having trouble selling property at its upmarket Charles Church operation. This follows a recent warning by Countryside Properties over demand for expensive homes.

BKL still on the slide.

[energyi] 12/5/2004 16:57

Screamer,
That's a good point about Demographics.

The Baby Boom is buying Property now, and will want to sell
within a few years. But next comes the "Baby Bust" and so demand
is likely to be much less in 5-10 years.

So you'd better make your returns from BTL SOON,
not in "the long run"
(when everything is meannt to be fine, but won't be)