Rugby Est It Share Discussion Threads

[qwazi] 28/8/2009 15:11

FFAX now bid

[qwazi] 28/8/2009 14:57

Only two MMs in this stock, FFAX on the offer at the moment, been a few buys on PLUS at 34.9 today so hopefully FFAX will move up soon.

[qwazi] 28/8/2009 08:51

Nice little bump up yesterday, but that only takes the stock back to where it was in May, whilst the rest of the sector has roared ahead. There are numerous catalysts for a rerating, all of which are pretty likely imo:

* Cancellation of share premium account and resumption of dividend
* Laxey (17% shareholder) turning activist to make something happen
* Takeover offer from another REIT or property company
* ...or quite simply a realisation that this is one of the few low leverage property companies that isn't trading at or above NAV. Even after yesterday's rise it is still on a 44% discount to NAV.

Rugby Estates also manages O Twelve Estates, which has gone on a big run recently.

[affc21] 27/8/2009 17:18

Rugby Estates Investment Trust's portfolio outperforms IPD
09:55 | 27.08.09

By David Doyle

Rugby Estates Investment Trust outperformed the IPD All Property Monthly Index in the first half of the year with a portfolio valuation decline of just 5.3%.

The IPD Index has fallen by 13.2% over the same period.

The REIT's portfolio fell by £3.2m compared with a decline of £7.3m for the same period in 2008.

Philip Kendall, chairman, said: 'The group is generating a positive revenue profit and cash flow from its property rental business. The group's financing is sound and gearing is low.'

Rugby's valuation declined contributed to a pre-tax loss £2.2m compared with £6m for the same period in 2008.

The business has a conservative gearing level of 56%.

Rugby's £57.1m portfolio comprises 34 properties with an average lot size of £1.7m and rental income of £4.5m.

Rugby's share price rose by 3.5p in trading this morning to 34p.

[qwazi] 27/8/2009 09:02

Cerrito - I don't see RUGB having an independent future for exactly the reasons you pointed out, too small, and admin expenses too high. If it was rolled into a larger portfolio, it would provide a much healthier cashflow. I think CIC or MAX should have a look at it.

[cerrito] 27/8/2009 08:53

Pretty good interims
Not sure if I will add but as ydderF says those who are looking for a conservatively financed entry trading at 50% NAV and with bank negotiations completed into the property market worth looking at
Not sure if they will ever trade at a premium to NAV; main problem is that they are not quite big enough so that their admin costs as a percentage of fixed assets are 2.5%pa which I imagine is bigger than other companies. In the days when many people were sitting on a healthy capital gain their business model made sense; as they point out in their statement this is does not fit today's environment.
As they explain cannot pay dividends because of a deficit in distributable reserves; if they could how much would they pay?
Back of envelope...profit adjusted for profit on interest rate hedging and property loss was £692k in half year say £1.4k full year 90% of which is £1.24m and with 58m shares outstanding is just over 2p pa so one will never hold this for the yield.
all in all as far as I am concerned you are not going to lose money on this may make more elsewhere a hold and it can go back to sleep for a few months more.
PS Interested to see who Edward Stanford was as they represent 15% of rent roll...a well established map and travel book company hopefully if people do not have money to travel there will be enough armchair travellers.

[qwazi] 27/8/2009 08:23

Well, looks like I was far too bearish on property values. I thought the NAV would fall to 44p, it has actually only fallen to 60p. The debt facilities have been renegotiated, without too much pain at LIBOR + 175bps, and comfortable on covenants. No divi, but the implication from the statement is that they will cancel the share premium account to create distributable reserves and hence divis in the not too distant.

At a 50% discount to NAV, this looks completely mispriced compared to the rest of the sector.

[ydderf] 26/8/2009 10:34

This is very cheap for a conservatively financed and transparent REIT. If Land Securities is priced at NAV plus, then so should this be.....Eventually they will all rise, as the perception that the commercial property investment market is not onle stabilising, but rising.......In a few months when all are selling at NAV and looking for growth it will be time to sell, but for now, a once in a lifetime opportunity to make serious dough......

[cerrito] 08/7/2008 22:09

Resigned to this being a long held holding but not worried by it; the recent collapse in prices has exposed a slight flaw in the business model as if there are fewer capital gains there is less propensity for sellers to do a deal with RUGB.
The present size of the company just but only just meets the minimum level for running such a vehicle.

[makingheaps] 01/7/2008 18:40

I am really glad I resisted the temptation to buy this earlier this year. The timing of the launch of the REIT concept could not have been worse. I have always believed that decisions should never be made for tax reasons alone. That seems to be the story of the REIT so far. With the real recession to come there is every chance these will fall further.

[makingheaps] 10/4/2008 12:20

No I'm not in OTE either but also like their model. I judged it was better to hold RES to benefit from all these smart ideas

[topvest] 02/4/2008 22:17

I've bought some recently. Strong management team. It is interesting that Panther Securities/Perloff have added a 9% stake in recent months. They are very astute and must see significant value here. I agree that patience is required, but this will come good.

[cerrito] 02/4/2008 22:03

MakingHeaps
I think you are right; I bought in early Feb at about the current price and after reading the prelims I asked myself why I had bought it...especially given the warnings on the dividend..given the relatively wide spread not a share to buy or sell without thought...very comfortable that I will not loose money but patience will be needed.
Incidentally you say you like Rugby are you in OTE?? I am not but have a watching brief

[makingheaps] 02/4/2008 17:42

I like this business model and they seem to have delivered their plan quickly and effectively. i am already a fan of Rugby and hold their shares. At the moment i don't want to commit to these as I have enough exposure to the sector through RES, PHP, WICH, BXTN and LAS. In the short term there seems little prospect of newsflow and there is likely to be another reduction in the NAV so there may not be much headway made. In the medium term (one year - two years) i think they will return to the issue price and there will be more transactions once it is apparent the market has bottomed.

[cerrito] 26/3/2008 11:18

Good to see 6.1.08 NAV of 98p and thus a healthy premium over current share price plus the fact that they haver £3.5m of free cash; steady as she goes report; extremely comfortable with what I have even if immediate dividend prospects are poor but not minded to buy more.

[cerrito] 23/2/2008 16:01

Have just seen this and thanks for setting up this thread.
I bought some a few weeks back at just under the current price.
Something I got comfortable with and I anticipate it as a buy and hold and clip the dividends.
As you note a good deal of the cash is deposited with RBS which will restrict their ability to make new purchases and perhaps explains why there have been none for 2/3 months.

[makingheaps] 01/2/2008 19:20

After three acquisitions last year I believe that if you assume the properties have fallen in value by 1/3rd from their stated values then you get a NAV today of 59.2p. So the current share price already assumes a pretty big slide in property prices. The cost of conversion will be about £1.6m or approx 2p per share. They should be profitable and cash positive based on rental income of about £4.5m. I don't think there's any more free cash allowing for the deposits to support the loan notes so future acquisitions are going to be for shares or backed by another placing. Institutions hold about 52.5% and the directors have been buying at 63p and 65p. I'm just watching for the time being but would appreciate other views.

[makingheaps] 01/2/2008 18:58

This investment trust was launched last year by Rugby Estates to buy up privately held property companies and take advantage of REIT status. Initial Share placing was £50m at £1 a share! Are they good value today?

[hectorp] 20/10/2007 23:45

Oh dear! at least is was close.

[hectorp] 25/2/2006 19:11

18-12 OVERTURE SCOTLAND 18 ENGLAND 12!

[dil] 14/6/2004 19:46

50-44 , Henson kicked three penalties from the touchline .... unlike some who can't score from 12 yards out in front of the posts.

Scrum sorted , lineout sorted ... 5 tries scored but missed Thomas at full back.

[stable] 13/6/2004 15:21

Not wishing to intrude on private grief, I have been waiting for Dil to advise us what the score was yesterday in the Wales v Argentina rugby match. I am sure he will as soon as he wakes up.

[dil] 12/6/2004 13:15

Well said that man , hope they play better than England did and make a game of it.

:-)