Rdi Reit P.l.c Share Discussion Threads

[wunderbar] 15/5/2020 15:04

When I last posted on this bb back-end August last year I said 100p was ludicrously cheap and RDI remained my number one stock pick. A nice rise to 120-130p ensued and the company's outlook was steadily improving thanks to a more diversified portfolio focused on retail (actively reducing), hotels, serviced offices and industrial/distribution ....and then Covid-19 struck in March sending the stock into freefall.

REITS in particular have had the proverbial kicked out of them in past couple months. Whilst I've been buying into quite a few of these in recent days/weeks by far my biggest investment in this sector is RDI. During this period I've made a cluster of buys ranging from 45-65p hoping these will pay off handsomely in 3-5 years time on the basis the world has got back to normal - and if it is anyone buying this stock now could be looking at a future dividend yield of 10-15%. As for my average price this is now 110p so still a long way to go before I break even.

Those of you who keep close eye on this stock might have noticed share price hit 41.5p yesterday (a new all time low, valuing the company at just £156m) before recovering by end of play. Thankfully, as I write RDI is up 15%, 7p @ 53p - quite frankly the stock was due a big bounce after falling 30% in past month. However given recent volatility I wouldn't rule out further erratic movements in the short term.

Now for some very quick number crunching. Half year accounts (end Feb 2020) show portfolio valuation of £1.3bn, less £623m debt, plus £85m cash balance = £762m assets. Right now RDI is valued at £205m. In essence the market thinks RDI's assets are worth £557m less than figures quoted! Why? I guess key thing here is the portfolio was valued prior to Covid-19, in the ensuing economic chaos/lockdown all commercial valuations/rents have taken a big hit (justified or not remains to be seen). Whilst acknowledging likely reductions I think the market has been far too savage with RDI (for some reason more so than other less diversified REIT's). On the assumption lockdown is lifted within 6 months and factoring in significant fall in rental income this year, and not forgetting expected sale of retail assets in Germany I think there's a distinct possibility we could see share price bounce back to 80p-110p by end of year.

I'll discuss the suspended dividend at a later date when I have more time noting this post is already too long! Let's hope some sanity returns soon.

[theprovosts] 14/5/2020 16:33

Good volume today. Mr 4k amateur seller seems to be lifting.

[poacher45] 12/5/2020 09:14

I agree with your thoughts theprovosts. However life is never that simple. They have sold all the foreign assets helped by the exchange rate because they could get there money back. When it comes to retail the aviva portfolio could not be sold on a 20% discount even before the corona virus. As the director said yesterday to break even on the hotels a 50% occupation rate is needed. How long is that going to take? They have had to drop the rates on managed offices and the occupation has gone down. U and I have cut costs last year and have already cut directors and top management salaries since the corona virus started. RDI are thinking about it. There management is poor they have furloughed 93 staff which I would take to be on the Hotel side. Why do they need over 100 staff still working which I can only assume is on the property side. This company needs new management to shake it up and face the challenges of the 21st century.

[theprovosts] 11/5/2020 19:10

Even a 30% decline in the value of all there assets would still leave a NAV around 80p per share. Considering the most recent disposals were around 8% discount, I'd say these are cheap. Expecting news about the recent German disposals soon:"In September 2019, the Group exchanged on the disposal of the Altona Shopping Centre, Hamburg for total consideration of €91.0 million... Although the contract remains legally binding, control is not deemed to have transferred from the Group at the reporting date"Plenty forced sellers around, great time to be buying assets for the long term investor.

[hugepants] 11/5/2020 13:19

They are maybe in better shape than expected?

"...The pro-forma LTV for the Group, including disposals exchanged by or completed after period end, is 41.8 per cent against a weighted average LTV covenant across the Group's facilities of 66.7 per cent.

We have ongoing and close engagement with all of the Group's lenders and have received supportive responses in dealing with the impact of cashflow disruptions on facility agreements. Of those facilities subject to financial covenants, formal covenant waivers have been signed or are being negotiated on 96 per cent of the Group's facilities by value. In many instances, financial covenant waivers have not been required but have been requested and agreed in any event.

Pro-active refinancing activity over the last two years has resulted in limited near term debt maturities. As at 29 February 2020, two facilities totalling GBP16.1 million (Group share: GBP12.8 million) were due for maturity in the second half of the financial year. GBP3.0 million has subsequently been repaid and terms to extend the remaining GBP13.1 million (Group share: GBP9.8 million) facility have been agreed with the existing lender, though remain subject to credit approval.

All of the Group's financing facilities are secured against portfolios or individual assets with no recourse to the wider Group."

[nickrl] 11/5/2020 11:08

grolifam RNS explains REIT requirements

"The Board is mindful of the Company's REIT obligation in respect of distributing its UK property rental profits. Such profits represent approximately 85 per cent of this period's underlying earnings, however the Board has until 31 August 2021 to meet its distribution requirements for the current financial year. The Board will re-evaluate the Company's cash and liquidity position with respect to its dividend policy alongside its full year results due in late October 2020"

[poacher45] 11/5/2020 10:37

This last five years has seen a downward spiral of returns it is not the result of the corona virus. They have lost approx £50 million by handing back retail parks to Aviva. They have 25% at least in hotels. The directors wages have increased dramatically while returns have stayed the same or gone down. In my opinion they are massively overstaffed and need a new management team like the Hansteen team.

[steve3sandal] 11/5/2020 09:53

I suspect the market doesn’t believe the NAV when this blows over. Disclosure... no longer holding at the moment

[theprovosts] 11/5/2020 09:00

Would someone care to explain to vast differences between NAV and the current shareprice? The market seems to think this is never going to blow over.

[grollfam] 11/5/2020 07:22

Only deferred , have to pay out 90% by year end to retain UK REIT STATUS

[eithin] 11/5/2020 07:17

Another dividend bites the dust !!

[nickrl] 23/4/2020 10:12

SIR have reported today there overtures to Travelodge haven't elicited a favourable outcome in the discussions devoting half of a trading update to it.



RDI just need to sit back and that let them take the battle to Goldman Sachs and reap the benefits.

[nickrl] 20/4/2020 09:44

Seeing as SIR have initiated proceeding against travelodge for non payment of rent im sure RDI will be watching with interest!!

[nickrl] 19/4/2020 21:22

Cerrito, RDI RNS of 6/4 confirmed travelodge haven't paid. The RNS also says RBH Managed Hotels, which is related to the RDI group, wont be paying rent for the qtr ending 31/5/20. So I would suggest RDI are on sticky ground if they want to twist the knife on Travelodge.

[cerrito] 19/4/2020 20:22

FT has a story which I understand has been in the Sunday Times that Travelodge has appointed Deloittes and a bank called Moelis to negotiate with their landlord a rent deferral / holiday. As either known or assumed they did not pay the March rent.
This story is no great surprise and has no doubt been cooked into the RDI share price which no doubt will drift lower.

[nickrl] 16/3/2020 14:12

Another leg down and with it RDI drops nigh on 30%. Its hotel business is clearly in very severe short term difficulties but even if it was trashed it leaves an office business but its difficult to see a bottom here and to know how much is forced selling and how much is shorters bashing everything.

[hugepants] 12/3/2020 10:17

quarter of the portfolio is hotels which, given covid, will be be hurting sentiment here

[rooky4] 02/3/2020 16:58

Fidelity International buying in, got to be good news

[makinbuks] 13/1/2020 10:51

Nice update today, hopefully this year we will see a gradual narrowing of the discount to NAV driven by the lower LTV and retail percentage

[nickrl] 01/11/2019 22:53

Doesn't bode well for any all retail REITs that IC decide to comment on! Actually RDI have dropped retail from 45% to 31% over last year albeit most of that is as a result of having to jettison the Avivia funded shopping centre portfolio. Also given they are planning to get out of European assets, of which much is retail, they will be down to c22% should they get the sale away. Actually this REIT is turning into a nice mash up of assets from Offices, Wharehouses, Retail & Hotels.

[hugepants] 01/11/2019 21:44

IC have this as a sell. Apparently because 31% of portfolio is retail assets. Seems a tad harsh!

[makinbuks] 30/10/2019 16:18

On what basis?

[hugepants] 29/10/2019 14:43

Broker Forecast - Goldman Sachs issues a broker note on RDI REIT PLC
28 October 2019, 12:20

Goldman Sachs today reaffirms its buy investment rating on RDI REIT PLC (LON:RDI) and raised its price target to 150p (from 140p).

[davvero] 28/10/2019 12:44

@eithin & ramellous.... thanks, very helpful... good luck