Real Estate Credit Inves... Share Discussion Threads

[my retirement fund] 23/6/2016 09:20

Ahh did you buy before the divi then. Hahaha, hehehe, ROFPMS ??????

[badtime] 23/6/2016 09:17

Well I don't know why I bought before the div :)

[mozy123] 23/6/2016 09:14

Thats more like it!

[holts] 23/6/2016 09:01

Someone must be confident

[badtime] 22/6/2016 16:06

Not sure I make out your div argument ..I'm going on the basis that it's a good price to buy ..yes there is the BREXIT issue but that's a different argument..then to say your downside risk is covered after the vote is debatable ..there's always risk no matter what..each to there own ..and I've chosen mine

[grahamburn] 22/6/2016 14:12

Why buy this close to the ex-dividend date?

Unless the share price rises by more than the two dividend amounts, all that you will achieve is getting some of your own money back, whilst losing some "capital" value. Add to that the uncertainty surrounding the next few days and you might get a double whammy.

Personally, I'm sitting on my hands until after the ex-dividend date when I might get a much better price to add to my holdings. I might not, of course, but at least any downside risk is covered!

[badtime] 22/6/2016 12:51

Sorry that shud have read I shud hav bought more

[badtime] 22/6/2016 12:51

Took a nibble yesterday at 155p ..maybe u shud have bought more

[deadly] 22/6/2016 12:28

The recent sell-off makes no sense to me after those results and the increased divi next week, and is a great chance to buy more which I've done.
Recovering today so seems someone is seeing the light.

[davebowler] 22/6/2016 09:03

Liberum fuller version-
RECI generated a NAV total return of 7.2% in FY2016. The company’s first special dividend resulted in a 7% dividend uplift for the year. The loan portfolio was the main driver of performance in the year and the rising loan allocation should ensure stable NAV growth going forward. We forecast 8% average NAV total return over the next two years. Our unchanged 168p TP implies 17% shareholder total return over 12 months. BUY

7.2% NAV TR

RECI delivered a NAV total return of 7.2% in FY2016 as the loan portfolio drove returns. We calculate a 15% NAV CAGR since the September 2010 restructure.

Cost reduction

The 8% preference shares mature in in September 2017 which should enable a significant interest cost reduction given the decline in interest rates since they were first issued.

Low volatility

Monthly NAV performance has been consistently positive in recent years (only 3 negative months since 2011) and the increased loan allocation should protect against volatility.

7.0% dividend yield

RECI’s 7% discount to NAV represents a 10% discount to the peer group and the company pays a sector-leading 7.0% dividend yield (7.5% including special dividend).

[davebowler] 22/6/2016 08:57

Liberum;
RECI generated a NAV total return of 7.2% in FY2016. The company’s first special dividend resulted in a 7% dividend uplift for the year. The loan portfolio was the main driver of performance in the year and the rising loan allocation should ensure stable NAV growth going forward. We forecast 8% average NAV total return over the next two years. Our unchanged 168p TP implies 17% shareholder total return over 12 months. BUY

[orinocor] 20/6/2016 17:34

quick 10% profit here when REMAIN wins.

[colonel a] 20/6/2016 16:51

Maybe not, but sales of brown corduroy trousers are buoyant.

[orinocor] 20/6/2016 16:44

If REMAIN wins this should make up the recent losses so I bought at 154.5p.
Goes ex 3.5p dividend in just over a week. BREXIT is not happening.

[cerrito] 17/6/2016 13:58

Given the very good monthly info, we get the annual report has less significance but still interesting to compare the portfolio as at March 16 with a year earlier.
As regards the bond portfolio the only change in terms of the bond ratings of more than 2% in the year was the decline in C rated from 7.4% to 3.4%...ie big picture no real change.
The weighted average LTV of the loan portfolio was at March 16 at 71.5% up from the 67.3% as at March 15 but down from the 73% at September 15. I would hope it stays in the 71% area and not go higher. It is of course somewhat misleading to talk about average LTV’s and this is seen by the fact that their third largest loan exposure-the £10.5m mezz/inv loan to UK retail- had a LTV of 102%. I hope they keep us informed of how this loan develops.
What does certainly concern me a bit is the decrease in the weighted average life of the loan from 2.8years to 1.8; from a credit perspective good to have short term loans I grant you but does not give much certainty of income.
I went to the annual report to remind myself of the way they deal with currency exposure given their EURO CMBS and German Loans and see that they hedge it.
I note in the year to March 15 the performance fee payable was £1.4m and this last year was down to £0.2m.

[davebowler] 17/6/2016 10:08

Liberum;
NAV performance was driven by the company’s loan portfolio which now accounted for 71% of gross assets at the year-end. The bond portfolio delivered a gross return of 4.4% in the year (vs. 16% in FY2015) against a backdrop of credit market volatility and this is the key reason for the lower NAV return in FY2016 versus the prior year.

The allocation to loans has continued to grow which has provided additional NAV stability given the volatility in bond markets around the turn of the year. Investment in loans increased by 30% over the year and they represented 71% of gross assets at 31 March 2016. The manager expects loan repayments in the coming months with potential inflows of £20m and there are several new loans in documentation which are expected to close in the near-term.

RECI has also declared a special dividend dividend of 0.8p for the year ended 31 March 2016 in addition to the normally quarterly dividend of 2.7p. Total dividends declared for FY2016 are 11.6p (7.4% uplift over FY2015).

Liberum view
We regard the payment of RECI's first special dividend as a positive development for the company. Total declared dividends for the year are 11.6p (7.1% of NAV at the start of the financial year) compared to a NAV total return of 11.7p (7.2%). RECI had already been the highest yielding stock among the real estate debt funds prior to this additional payout.

The rising loan allocation should minimise any volatility and continue to provide stable, high risk-adjusted returns going forward. Since the end of 2011, there has been only three months with a negative NAV total return.

RECI trades on a 7.1% discount to the last reported NAV compared to an average premium of 2.3% for peers. RECI's dividend yield of 7.1% (excluding special dividends) also compares favorably to the peer group average of 6.2%. We believe RECI offers the best value in the sector given its superior NAV total return track record, NAV growth prospects and proven ability to source attractive loan deals.

[mozy123] 17/6/2016 08:37

A nice special divi!

[deadly] 15/6/2016 21:25

Results this Friday. Will they give a boost to the depressed share price? Hope so.

[skyship] 15/6/2016 16:24

Cerrito read everything rather well back on 4th March - P. No.1144:

"I have lightened up a bit as I have been reducing property related exposure in the run up to the referendum..partially due to concern about the effect that a BREXIT will have on property , partially because I am not buying into the conventional wisdom that Brexit will lose and partially on the certainty that come May/June the markets will get very nervous."

I've bought back in for a few today. The 152p/155p range will hopefully support again, as per Feb/Mar'16.

[skyship] 09/6/2016 07:17

Dividend Announcement

Preference Dividend

Real Estate Credit Investments PCC Limited announces today that it was resolved to pay a preference dividend of GBP 2 pence per preference share (a total amount of GBP 838,608) for the period 01 April 2016 to 30 June 2016. The dividend is to be paid on 8 July 2016 to preference shareholders on the register at the close of business on 17 June 2016. The ex dividend date is 16 June 2016.

[skyship] 08/6/2016 09:30

165p NAV & Cash @ £13.3m v. Port. Valn @ £165.3m

[holts] 07/6/2016 20:53

Wouldn't disagree , can see many reasons to come out and good ones to stay in , on balance just inclined towards in , would EU see it as a significant shot across the bows if it was a stay in vote with a tiny majority ?Somehow I doubt it , then when I start to think about what they may try and force through after an in vote ......

[cerrito] 07/6/2016 15:17

Congrats to them as according to my records-and please correct me-they had their highest month end NAV for many a year and a higher than normal amount of cash.
I guess referendum accounts for this being greeted by a falling share price with adequate trading volume.
Perhaps this will be clearer on the 17th..too bad that there is no conference call as we need it now.
I need to say I am in a bit of a funk not only with the actual vote but also a v messy political situation in the event of a narrow remain win so am not taking advantage of buying these at a bigger discount than we have seen in recent years.