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Real Est.Cred Share Discussion Threads
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|I take my hat off to management for increasing the NAV per share so much in a month of share issuance and heir speed in deploying the proceeds.
Too bad I have not read this well and my holding is very much reduced.|
Significant capital deployment
Real Estate Credit Investments' NAV at 31 March 2017 was 163.1p which represents a return of 1.3% in the month.
March's performance benefited from unrealised valuation gains totaling £1.5m (1.7p per share). This included a gain of £0.9m on a portfolio commercial loans in the Netherlands and a £0.6m uplift on an equity position which is held alongside the shareholder loan secured against a portfolio of UK logistics properties.
The £25m initial placing closed at the end of March and RECI deployed £24m of capital during the month. The largest investments include an £8.5m whole loan secured against a 125 room hotel in York and a £9.6m purchase of a new CMBS bond issue secured against a fully let UK student housing portfolio (7.75% cash coupon). £4.2m was invested in other bonds and £1.7m was funded to existing loan commitments.
Cash on the balance sheet at the end of March was £24.4m (17% of NAV) of which £1.5n has been invested in April with a further £17.3m committed to new investments.
RECI has invested the proceeds from the recent capital relatvely quickly in deals that had been identified in the company's pipeline. The loan secured on the hotel in York was is a senior loan with a yield of 12% and a LTV ratio of 68%. The LTV on the mezzanine student housing CMBS investment is 70% and we believe it is the recent Brookfield student housing CMBS which priced last week. The £400m Brookfield portfolio comprises 13 assets with a total of 5,684 beds.
We calculate a NAV return of 7% over 12 months to March 2017. This has been achieved despite cash drag during the year from a number of large loan repayments. Returns should improve over the next year as most of the capital has been deployed and the upcoming repayment of the 8% preference shares should enable significant cost saving. Assuming the preference shares are refinanced with a 4% bank facility, we estimate the annualised increase in net income will be c.£1.8m (2p per share) including the benefit of the reduced management fee. The shares currently trade on a 0.7% discount to NAV and offer a 6.7% prospective dividend yield (compared to an average 5.2% premium and a 6.0% dividend yield for the peer group).|
= Ex div NAV up 1.0p per share to 161.0p per share, following the 2.7p per share ordinary dividend
NAV increase driven by both the loan portfolio, which continues to generate strong interest income returns, as well as positive returns on the bond portfolio
= On 23 February 2017, RECI announced a successful Initial Placing under its new Placing Programme of £25.3 million with a placing of 15.5 million new Ordinary Shares, subject to shareholders’ approval at the EGM on 22 March 2017
= Cash at 28 February was £26.5m. Since 28 February, RECI has made further investments, following which it will have a cash balance of approximately £7m (of which £2.7m will be paid out in dividends to Ordinary and Preference shareholders in March)
= RECI committed a total of £8.5m to a new whole loan secured against a 125 room hotel in York
= RECI purchased £9.6m of a new CMBS bond issuance with a strong cash pay coupon of 7.75% secured against a fully let UK student housing portfolio
= RECI has also funded a further £1.3m to existing loan commitments
= Cheyne’s pipeline remains strong, and RECI remains well placed to take advantage of opportunities in both the loan and structured credit markets|
|Bid is up a couple of pence|
|XD 2.7p today. Payable 17th March...|
|Not guilty , would have been useful though .|
|Did you have any connection with Holts (Car accys.) HOLTS?|
|It does appear there is no intention of replacing the £41.9m of pref's - which actually means the management fee will be reduced.
I cannot see where there is dilution because most of the funds will likely be used in a combination of repaying pref's, therefore a 9.25% yield when including the 1.25% management fee on the pref's, or invested in the market at yields currently between 8.25% and 9.25%.|
|Jolly good that was expensive debt at 8% equity is cheaper|
my retirement fund
|being lazy , how many prefs in issue ?|
|reading the blurb it would seem there is no intention to replace the prefs when they expire.|
|Dilution is a bit worrying though.It will be a while before the proceeds are utilised ,I bet.|
|badtime - the shares are better value to buy on the market at 164p (or the current price of just over 163p) because the placing shares do not qualify for the dividend that goes ex-div on 23 February.|
|Placing at 162.5?Am I reading it right that we all might get a chance to participate on the funding up to 60/65 Million ..the first 20 million already taken up?|
• The NAV per share declined by 1.1p per share (or 0.7% of NAV) to 162.7p per share in the month of January
• The main investment portfolio contributors to the monthly NAV movements are as follows:
o Fair value revaluation on the loan portfolio: -2.09p per share
o Revaluation of the bond portfolio: -0.23p per share
o Income from the investment portfolio: 1.65p per share
o Exit fee from a realised loan in the month: 0.15p per share
Etcetcetc……see link below:
Real Estate Credit Investments (BUY, Mkt Cap £115m)
7.5% NAV return in 2016
RECI generated a NAV return of 1.1% in December 2016 bringing the NAV total return for 2016 to 7.5%. NAV performance in the month was driven by the loan portfolio and the third consecutive month of positive returns from the bond portfolio.
December was an active month for portfolio activity with the company acquiring £15.4m of a bond secured against a prominent office building in the City of London (8.3% expected yield). £2.0m of bonds were sold above the prior month-end carrying values.
In the loan portfolio, a new loan commitment was signed for a senior loan to fund the development of a site in Woolwich, London into 152 mid-market residential units. A €7.6m repayment on a loan secured on a Berlin shopping centre was received in the month.
2016 has been another positive period for RECI and the 7.5% NAV return has been achieved despite volatility in the underlying real estate market during the year and cash drag in H2 2016 following a large loan repayment in August. Cash as a percentage of NAV at the end of December was 15% and outstanding loan commitments account for the majority of this.
RECI's share price discount to NAV has widened to 3.2% which compares to an average 4.2% premium for peers. This is despite RECI's superior NAV total return track record and sector-leading dividend yield of 6.8% (6.0% for peer group).|
|Very good performance, so rather surprised it is trading well below NAV.|
|Fact sheet shows good performance in December:
# Ex div NAV up 1.7p per share to 163.8p per share, following the 2.7p per share ordinary dividend
# NAV increase driven by both the loan portfolio, which continues to generate strong interest income returns, as well as a third successive month of positive returns on the bond portfolio
# RECI purchased £15.4m of a new bond issuance with a strong cash pay coupon secured against a prominent office building located in the City of London
# RECI sold 2 bonds in December realising an amount of £2.0m, at prices above their values at the previous month end
# As at December month end, RECI’s bond portfolio is £47.3m (28.8% of GAV)
# RECI signed a new loan commitment of £7.3m to provide a senior loan to finance the development of a site in Woolwich, London into 152 mid-market residential units, 120 of which are to be private, with the remainder to be affordable units
# RECI received a substantial repayment of €7.6m on its senior loan secured by a dominant shopping centre in a residential suburb of Berlin, following the successful refinancing of a large part of the debt
# RECI’s total loan commitments are £111.7m (68.1% of GAV)
# As at December month end, RECI has a cash balance of £18m. Cheyne’s pipeline remains strong, and RECI remains well placed to take advantage of opportunities in both the loan and structured credit markets|
|Sudden turnaround in RECI. Up 4p to 160p Bid today. Has there been a New Year tip somewhere perhaps...
Well-timed top-up MRF.|
|Dropped from 165p to 156p in 2 weeks. That's 5.5%. 2.7p of that is the dividend. Any underlying reason or is this just another buying op before xmas?|
|Seems to have been a seller for the last few days , irritatingly paid 1.61 something , what the xd implications are ....
looks like just using pre divi to sell a few .|
|Dropped more today pre-XD tomorrow bizarrely. So bought more at 160.5p. Would be rude not to.|