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RECI Real Estate Credit Investments Limited

115.00
-1.00 (-0.86%)
Last Updated: 15:40:04
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Real Estate Credit Investments Limited LSE:RECI London Ordinary Share GB00B0HW5366 ORD NPV
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  -1.00 -0.86% 115.00 114.50 115.00 118.00 115.00 118.00 622,138 15:40:04
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Unit Inv Tr, Closed-end Mgmt 30.67M 20.55M 0.0896 12.89 264.88M
Real Estate Credit Investments Limited is listed in the Unit Inv Tr, Closed-end Mgmt sector of the London Stock Exchange with ticker RECI. The last closing price for Real Estate Credit Inves... was 116p. Over the last year, Real Estate Credit Inves... shares have traded in a share price range of 109.50p to 137.50p.

Real Estate Credit Inves... currently has 229,332,478 shares in issue. The market capitalisation of Real Estate Credit Inves... is £264.88 million. Real Estate Credit Inves... has a price to earnings ratio (PE ratio) of 12.89.

Real Estate Credit Inves... Share Discussion Threads

Showing 1276 to 1298 of 2550 messages
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DateSubjectAuthorDiscuss
28/6/2017
06:41
Not really a suspicious small spike in price over last week or so .
holts
20/6/2017
10:49
Liberum;
Capitalising on market opportunity




Target price 168p | Published price 162p | *Corporate Client of Liberum

RECI's NAV total return for FY2017 of 7.1% was in line with the prior year. The final dividend for the year has been increased by 11% to reflect income earned in the period and the refinancing of the preference shares could potentially increase the dividend yield to c.8%. The company has deployed a significant amount of capital recently in deals offering attractive risk-adjusted returns as market dynamics have improved. The shares trade on a 1.7% discount to NAV (6.6% premium for peer group) despite an excellent long-term track record and favourable outlook. BUY

7.1% NAV return

RECI's NAV per share at 31 March 2017 was 163.2p per share (March 2016: 163.2p per share). We calculate a NAV total return of 7.1% for the year after adjusting for dividends paid of 11.6p. NAV has risen a further 1.1% in the two months to May 2017. RECI has today announced a final dividend for FY2017 of 3.0p per share (11% increase on the prior quarter).

NAV summary


31 Mar 15
31 Mar 16
31 Mar 17

£m
£m
£m
Bond portfolio
59.4
39.6
50.2
Loan portfolio
87.1
113.2
113.3
Cash
8.1
5.3
24.9
Preference share liability
-41.7
-41.8
-41.9
Other net assets
5.2
2.5
-2.2
Net Assets
118.1
118.8
144.3




Shares Outstanding (Million)
72.8
72.8
88.4




NAV per share
162.3
163.2p
163.2p




Dividends paid in the year
10.8p
10.8p
11.6p




NAV total return*
12.3%
7.2%
7.1%


Source: Company data, *Liberum estimates

Market opportunity for established lenders

The manager reports a reduction in competition in the lending market which has been amplified by the impact of Brexit. At the same time, demand from opportunistic buyers seeking an attractive entry point has increased. This has created an opportunity for established lenders to take advantage of favourable market dynamics. The segments of the market offering the best risk-adjusted return for the manager are senior loans to value-add assets and listed securities on large assets or portfolios of core/core+ income assets.

The company has deployed a significant amount of capital in these segments following the £25m capital raise in March. Recent large transactions include a £20m senior loan commitment on a prime London residential redevelopment. The LTV is 40% and the expected IRR is 8%. Other recent loans include an £8.5m whole loan secured against a 125 room hotel in York. In the CMBS market, RECI invested £9.6m purchase in a new mezzanine CMBS bond issue secured against a fully let UK student housing portfolio (7.75% cash coupon; 70% LTV). We believe it is the Brookfield student housing CMBS. The £400m Brookfield portfolio comprises 13 assets with a total of 5,684 beds.

Potential improvement from debt refinancing

The upcoming maturity of the company's 8% preference shares offers the potential for significant cost savings. The preference shares are likely to be replaced with cheaper debt and the company's total expense ratio is also expected to reduce as the management fee is calculated on Adjusted NAV (NAV plus preference shares).

Assuming the preference shares are refinanced with a 3% bank facility, we estimate the annualised increase in net income would be c.£2m (2.2p per share) including the benefit of the reduced management fee.

Valuation

We believe the current share rating represents a compelling opportunity to invest in a fund with an excellent NAV track record and at a point when the lending market is offering attractive risk-adjsuted returns. The repayment of the preference shares offers a further catalyst for an uptick in returns.

RECI’s 1.7% discount compares to a 6.6% average premium for the real estate debt fund peer group. The company’s 6.8% dividend yield (based on 11.1p dividend for FY2017) is also 0.8% higher than the peer group average. We maintain our BUY rating.

davebowler
20/6/2017
09:07
Yes, looking forward to regaining the heady heights of 180p! No obvious reason they dropped, far better than cash in the bank.
deadly
17/6/2017
13:43
I know we're all here for the yield rather than capital gain; but sure nice to see them break North out of their 9month box:


free stock charts from uk.advfn.com

skyship
16/6/2017
10:38
I suspect (hope) that the 3p/Qtr will henceforth be the norm. If so RECI is now on a 7.27% Yield @ 165p. A banker holding in uncertain times...
skyship
16/6/2017
09:01
Results out; divi increase. Hope it will continue as it should since:

"......mindful of the redemption in September 2017 of all the Preference Shares, with their 8% per annum coupon, your Board is pleased to
increase the fourth interim dividend by 11% to 3p (2.7p for the quarter ended 31 March 2016)"

deadly
06/6/2017
18:58
Skyship, you may well be right about the future price movement ; I have just sold out having had a roller coster ride since first buying shares in January 2007, although keeping my RECP for the final few months.
Been lightening up on alot of my domestic UK shares....not getting a good vibration on the election doorstep and think UK in a for a very tough couple of years.

cerrito
25/5/2017
17:30
Can anyone throw any light on the two bizarre "Holdings" RNS's on 18th& 19th May?
skyship
19/5/2017
09:42
Real Estate Credit Investments Limited (LSE: RECI, RECP) will be announcing its results for the year ended 31 March 2017 on Friday 16 June 2017
johnroger
05/5/2017
08:19
Liberum;
eal Estate Credit Investments' NAV rose 0.6p (0.4%) to 163.7p per share at 30 April 2017 (March 2017: 163.1p).

During April, £12.4m was invested in two new bond issuances and the company also committed £20m to a senior facility secured against a residential development asset in central London. The loan to gross development ratio is under 50% and the expected IRR is in line with the company's target returns. The company made another £14.9m loan commitment in May which is a secured junior loan to an established UK housebuilder.

Cash on the balance sheet at the end of April was £13m and this reduced to £8.5m following the initial drawdown of the loan to the housebuilder. A further £3m is expected to be drawn against existing loan commitments in the coming weeks.

Liberum view
RECI has been very active in the period since the capital raise in March. £36m was invested during March and April, and £35m of new commitments have also been made to two new loan investments. The company has experienced an increase in demand from potential borrowers in the aftermath of Brexit and the manager continues to report a strong deal pipeline.

We calculate a NAV return of 7% over the 12 month period to March 2017. 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. The shares currently trade on a 1.0% discount to NAV and offer a 6.7% prospective dividend yield (compared to an average 3.2% premium and a 6.1% dividend yield for the peer group).

davebowler
05/5/2017
06:33
Factsheet for April - see newslink in Header:

Manager Commentary

#April NAV up 0.6p per share to 163.7p per share
#In April RECI made a new £20 million loan commitment as part of an overall Cheyne transaction providing a senior facility secured against a high quality residential development asset in central London
#RECI also purchased a total of £12.4 million of two new bond issuances. As at 30th April RECI’s bond portfolio was valued at £62.7 million
#Following total investments in April, the cash balance at month end was £13.0 million (7% of GAV)
#Since 30th April RECI has made another new loan commitment of £14.9 million which is a secured junior loan to an established UK homebuilder. Following the initial funding of this new investment, RECI’s cash balance as of 7th May was £8.5 million of which a further £3 million is expected to be drawn against existing loan commitments in the coming weeks
#Cheyne’s deal pipeline remains strong, and RECI remains well placed now to take advantage of opportunities in both the loan and structured credit markets

skyship
28/4/2017
12:16
jimblack513:
Buying a reit you are exposed to equity risk on real estate.
buying reci you are exposed to debt secured on real estate.
In a downturn, i would expect equity to be impacted first, however pricing on debt could be more expensive and therefore the mark to market of the reci existing debt would reduce.
So i would say reci would be lower risk than REIT, up to the point where the decline in value may impact the reci debt (say property values are 50% down, both reci and reit are toasted..)

yieldsearch
28/4/2017
07:49
On the risk spectrum where does this lie? Low risk, medium risk or high risk?

Is it better buying a REIT on a 5% yield or this on a 6.5% yield. My bank has decided to reduce my interest rate from 0.85% to 0.05% and I need a home for some of my funds.

jimblack513
13/4/2017
14:28
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.

cerrito
13/4/2017
09:21
Liberum;
Significant capital deployment

Event
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.

Liberum view
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).

davebowler
08/3/2017
07:44
Manager Commentary:

= 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

skyship
01/3/2017
14:11
Bid is up a couple of pence
badtime
23/2/2017
10:09
XD 2.7p today. Payable 17th March...
skyship
10/2/2017
16:43
Not guilty , would have been useful though .
holts
10/2/2017
16:04
Did you have any connection with Holts (Car accys.) HOLTS?
asmodeus
09/2/2017
14:42
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%.

kenny
09/2/2017
14:42
Jolly good that was expensive debt at 8% equity is cheaper
my retirement fund
09/2/2017
14:36
being lazy , how many prefs in issue ?
holts
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