Queen's Walk Investment Share Discussion Threads

[jon389] 23/12/2008 09:45

Whats there debt?

[qwazi] 23/12/2008 09:39

Healthy volume and a nice rise today. I guess the company is buying back some more shares and hopefully the overhang has been cleared now.

[qwazi] 22/12/2008 21:06

I think it is very good to see the company buying back shares.

Firstly, assuming one can believe the NAV, it is hugely accretive. They spent EUR 19,000 buying back assets worth nearly EUR 250,000.

Secondly, I think the market has been assuming that QWIL is going bust. A buyback of shares demonstrates that it is not - i.e. it is not breaching bank covenants and it is able to use its surplus cash for purposes other than paying down debt. There is no way that the board would sanction a buyback if they thought that there was any chance of the company going bust as I expect that would be construed as negligent.

Thirdly, they can quickly clear up the overhang (my guess is that it is nearly gone anyway) and the market can start to focus on the positive aspects here. I hope and expect to see the buyback continue in the near term.

Re the UK assets, they have already written these down to EUR 15.9m (as at 30 Sep 08) so they only make up around 10% of the NAV. They're not expecting much cashflow from them over the next year.

I again recommend having a read of the latest presentation which gives a detailed review of the portfolio


I think slide 16 and slide 17 are interesting. Basically it says that the company benefits from lower EURIBOR rates as the bulk of its Portuguese mortgage portfolio is floating rate (priced off EURIBOR as I understand it - not base rate). EURIBOR peaked at 5.39% on 8 October 2008 and has since fallen to just over 3%. They had seen a rise in default rates when EURIBOR was at elevated rates, and so adjusted their cashflow forecasts accordingly BUT they have not yet adjusted their valuations for the subsequent collapse in EURIBOR. Therefore, it's quite possible that the value of the European mortgage tranches could be written UP at the next results

[cerrito] 22/12/2008 20:32

Topped up today let's hope that having bought at E2.9 on the basis that it was a bargain that I am better this time
Good to see some buy backs..I was considering giving them a call to see what they were doing but was put off because they will not give you a straight answer..the fact that their purchase of 50k did nothing for the share price shows that perhaps there is more selling...
I have been reading the EET tale of misery..one thing is that they have a UK Vehicle called Ludgate which is probably not dissimilar to QWIL's Newgate and EET commented that the widening spread between base rates and Libor had damged their profitability..to the extent that their assets are priced of base and liabilities off Libor that makes sense and I need to contact QWIL to see if their Newgate is impacted in the same way.

[qwazi] 22/12/2008 16:15

...which was very shortlived!

[qwazi] 22/12/2008 16:03

...and there's the pop.

[qwazi] 22/12/2008 15:30

Looks like most of the sell-side volume has disappeared from the order book now.

[qwazi] 22/12/2008 14:21

yes, pity that half of it was with Lehman, but the other half is Credit Suisse and should generate a nice return.

[qwazi] 21/12/2008 22:22

At this level, I now think this looks very interesting.

They've written down the value of their assets pretty aggressively (i.e. the value of their UK mortgage exposure was written down to 16m at Sep from 56m in June). So I think the NAV of EUR 4.95 is pretty credible. Plus they have some interesting assets in the portfolio that are DEFINITELY valuable (how about an in the money EUR14 million put on the Halifax House Price Index expiring in Nov 09?)

They also just agreed amendments to their debt facilities, which gives them two years to pay back the debt and the removal of material change covenants. The banks must have been pretty comfortable with the value of the assets to have allowed that.

Have a look at their presentation from the latest results, it is very informative:


The selling on friday would appear to have been down to tracker funds selling out as they needed to exit before this dropped out of the FTSE Small Cap index. (Note the big trade that went through at market close, and also that volume has been higher in the past few days than it had been for weeks).

They have about EUR 150m of investments and 18m of cash, and about 40m of debt. They are expecting to pay the debt down to 30m by the end of March.

The cashflow that their portfolio generates is huge, and they appear to be committed to carry on paying at least some of that out by way of dividend (it has just recently gone ex 8c of quarterly dividend).

With the price at this level, it wouldn't be too surprising to see Cheyne take out the balance that they don't already own (they have about 60%). It would cost them next to nothing and would be a big NAV boost to the fund that holds it.

[cerrito] 20/12/2008 22:39

QWIL's share price of E0.38c compared to 30908 NAV of E4.98 looks very exaggerated discount as of course it is but modest compared to IERE whose share price of 7p compares to 30908 NAV of 195p and in line with MERE where the respective figures are 547p and 49p

Something funny was going on friday afternoon-apart from QWIL, CWR and IERE had rapid falls in the last hour.

[timanglin] 15/12/2008 15:23

Thanks, I will have a look, maybe this is a good time to get back into oilies. anyway will do some watching.

[timanglin] 15/12/2008 11:31

sure, have a look at GVC - today it became a better buy. GVC has the potential to grow, although i admit that growth hasn't been as much as i expected in the last 2 years - however the ceo(relatively new) does have a track record of growth. You owe me a share please? always interested in what fellow investors are watching or investing in?

One of the benefits of QWIL is that they are european and not just UK. I genuinely have sympathy for the management at QWIL, and do plan to buy in when the time seems right. dyor imho

[timanglin] 13/12/2008 15:26

thanks for the reply, i always enjoy dialogue on bbs. It seems to me that there are 2 issues: mortgage write offs/non payers and repayers - which to date to be fair in europe dont seem to have been too big an issue, howeever the key words being to date - i am not sure i, or anyone, can estimate the number of walk outs that are`going to happen, the second issue is lack of growth, which to me is a bigger issue because we all like a little bit of growth in our shares(in general), the banks wanting their money back pronto, seems to me to have reduced the possibility of growth, in that the management have less money to invest in the dislocations. I guess there is also the issue of management, in the sense that they cant exactly have enjoyed the last year, however i guess they are still being paid, ?motivation. This leaves this as a straight income play with an 'oversold' growth possibility, which the 25,000 friday buyer must like, however there are other shares producing 30% plus predicted dividends, in euros, with possibility of growth. I am not a holder, have been watching for ages, and these statements must only be considered as ramblings. dyor, imho.

[timanglin] 11/12/2008 19:05

i have been watching with interest. it seems that Mronionbahji has a valid point, which maybe why the banks have grabbed the management by the proverbials and are essentially expediting their loan repayments. I guess if the banks are that worried, the market may be - please correct me if i am wrong. dyor, imho.

[zastas] 11/12/2008 17:57

Down and down it keeps going, on relatively little reported volume. Now , even after the dividend halving, it is on a 40% yield, and about 15% of reported NAV. Will we soon see 100% yield? The way it's going, I wouldn't bet against it.

Is the price realistic or madly cheap? Who knows, but I remember the splits incomes on 30-40% yield in March 2003, such as BSOI, and recovering almost completely.

Either:
1 This is going bust.
2 Small sellers exceed buyers and the two MMs want to race to the bottom as soon as possible, with only small trading sizes allowed, to minimise their exposure, just if scenario 1 occurs.
3 There is consistently one or more large ,forced or not, seller offloading all they can, stepwise all the way down.

Certainly Lehman Europe's holding has almost halved in comparison with a few months ago. The bad ,or good, news is that they still have more than 800.000 to go.

I've bought 2000 more, although again it doesn't get reported. No clue where they are but QWIL is not on PLUS and SWX seems unlikely. I'll try to keep enough money to pay for my coffin for when QWIL receives its own.

[cerrito] 04/12/2008 20:58

Glad I did not get round to topping up following todays 21% fall in euros which is I suppose what happens when there is little volume.
You would have thought it woth their while to do some buy backs at this price, especially as about 7% is about to be returned in a cash dividend.

[cerrito] 30/11/2008 17:26

Had a good look at the last quarter's results.
In some ways they are a no brainer ie with sept 08 NAV at E4.98 per share compared to current share price of 1.56E ; future loss adjusted cash flows of E238m compared to marcap of E45m; manageable debt levels and an agreed and seemingly workable plan to pay off debt by 10/11; and an ability to buy AAA assets at 13% with plenty of distressed sellers still around and a 19% yield after dividend reduction amply covered by cash flow.
Furthermore I do not suppose we will see any more share buybacks which while a very good idea at the time have proved with the wisdom of history not to have been a good idea.
But then of course you can say the same about many other situations which is why I am still thinking about buying more, not to mention the fact that I bought some in early October and have suffered a 33% loss.

Virtually all of the decline in the quarter to 9.08 of the NAV from E 6.32 to E4.98 has been the reduction in value of the UK mortgage portfolio, about E.12c of which would be the loss of value of the Lehman part of the hedge. Indeed if they had used broker marks for valuing their UK mortgage portfolio rather than their more conservative assumptions the NAV would have been E5.54; en passant FWIW loss rates on 3 of their 7 UK mortgage pools actually improved in the quarter.

Re reading my notes of the Sept 23 conference call gave no suggestion that they were thinking of changing their Deutsche Bank facility and I suppose it is a testimony to the change of temperature over the last couple of months that they have done what they have done...I assume that to the extent that the markets stabilize they can negotiate again with DB and get a relaxing of the facility but then of course they will not be able to do the purchases that they presently can.
I note their comment that prepayments have been running at the amount projected.
I am comfortable with the dividend reduction.

[timanglin] 28/11/2008 09:46

if they are predicting circa >20% pa returns on their new purchases, it seems a bit strange to pay off debt(??interest - commercially sensitive?), the bankers must have them by the proverbials.Shame about the divi. dyor, imho.