Sdic Power Discussion Threads

[lagosboy] 27/3/2010 11:20

kibes

I agree with your view on the banks and SPV, I think Barclays may run into some major problems further down the line. The Spainish, Portuguese banks also have huge bad loan exposure to real estate, not yet written down so that will have a very negative impact on the banking sector and sentiment within the property sector. Not sure though that SDIC is first in the firing line.

Kibes

I think you have reached potentially a correct decision but for the wrong reasons on the banks.

The banks maybe tempted to recover loans made to the likes of SDIC, given the opportunity presented by the covenant breach, as that will enable them to re lend those same funds to meet Govt Targets. Net/net o/s loans remains relatively constant and low, but new loans rise to meet targets.


All things said I still like SDIc at these levels, I bought again at 15 and 16.5. If nothing else a take out would demand a premium above this level.

[scburbs] 27/3/2010 09:56

Kibes,

No comparison between JRVS and SDIC so it would be foolish to lose money here just because you have lost money in JRVS. If you are keen to avoid any risk at all then clearly it makes sense to avoid SDIC, but the potential upside here is massive.

If you can find me one property company where the bank have pulled the plug on an 80% LTV then we will all have to reconsider. Also remember that they are only close to breach on 1 facility so it would only be these properties (at the moment).

In order to provide you with some evidence of banks being supportive even on very high LTV's there is a convenient example from yesterday, WNER. Latest share price is around 40p (yes a massive premium to NAV)

This is from the last results in September 2009 (UK market is up since this date).

"Net asset value per share negative 43p [yep that's negative 43p] (March 2009: 8p)"



This is from yesterday.

"Successful Completion of Debt Refinancing"

"One facility has no loan to value ('LTV') covenant. Another facility has no LTV covenant for 12 months following which it will have an LTV covenant of 117.5%. The third facility has an initial LTV covenant of 113%."



Now I wouldn't compare WNER to SDIC, but it is illustrative of the approach that banks are taking towards property companies. Whilst there has been some foreclosure action by banks I don't think this has generally been seen where the LTV is as low as 80% and the banks have plenty of 100+% loans to deal with before they have time to worry too much about the ones at 80%.

[paulypilot] 27/3/2010 05:22

kibes - sounds a bit hysterical, but you're entitled to your view.

Mellon's reputation is on the line here. He has to sort it out.

Banks are supporting property cos with trustworthy mgt, that's what it boils down to. Let's see what happens here. I'm not inclined to trust this lot at the moment, based on their lamentable track record, inappropriate egos, & excessive fees.

I think they've given the impression that everything is fine, when there was an underlying problem with the banks, as revealed recently.

We need to see things sorted out here to shareholders satisfaction. Pronto.

Regards, Paul.

[kibes] 27/3/2010 04:25

Having just watched Jarvis go bust because their banks would not support them I am wondering what else in my portfolio is going to go under. There is a big red warning sign hanging over SDIC in my opinion. The problem is that banks at the moment are allocating any spare cash to their staff bonuses as first priority. Anybody with a real business needing help is right at the end of the queue. If the plug is pulled on SDIC and the properties all have to be sold at highly distressed prices will there be anything left for shareholders? Probably not in my opinion. I think I shall sell on Monday.

(The accounts of the major banks are all fairy tales in my opinion. Anything thast looks like a loss is syphoned off into a 'special purpose entity' off the balance sheet where it can be hidden from view. So all that is shown is those bits that are making a profit and surprise surprise this forms the basis for the bonus pool. Invented by Enron, this style of accounting is now the model for all crooked banks)

[lagosboy] 25/3/2010 14:49

PP

Surely it would be more sensible for a Master of the Universe and a man of your calibre and wealth to invest directly into the German property market and keep the control of your own financial destiny firmly within your own hands. Why expose yourself to the rape and pillaging of a vehicle like SYG.

As for SYG's fees, they will only increase over time, conditional upon SDIC proving to be a successs.

Drop us a line in 10 years, that will not be a day too soon. hic hic

[paulypilot] 25/3/2010 13:22

Hi,

Good to see some life in this old dog after all!
Goodness knows why one or two posters here are so touchy about opinions which differ from and/or challenge your own - surely that's the whole point of Bulletin Boards? (to have a robust debate).

For me, the key thing is obviously the situation with the Banks. Once we have some news on how that is being resolved, then hopefully we can move forwards & get the structure here sorted out (which JM has already indicated is work-in-progress).

If people want to buy SYG shares, that's entirely up to them. But I am also perfectly entitled to point out the flakiness of its profits & likelihood that it will see mgt charges to SDIC reduced. SDIC is the better option IMO, as a (very) long term investment (I'm in this as an alternative to direct purchase of German property, hence am taking a 10 yr+ investing view with SDIC shares).

Regards, Paul.

[scburbs] 25/3/2010 12:20

Well that's more like it. Plenty of time to load up at 15p and now starting an uptrend (hopefully). The results including some positive news would make me more confident though!

[w1ndjammer] 24/3/2010 18:53

davidosh

its in MCAU accounts published today it clearly states

SPG is the manager of MCAU
the investment adviser is SPG far east a wholly owned subsidary of SPG

SPG as you should know, is a wholly owned subsidary of SYG

it was the board of MCAU that was replaced, NOT the management company

Paulipilot has tried to undermine SYG and also in a way SDIC
i don`t know what his agenda was, but they are onto him.

WJ.

[lagosboy] 24/3/2010 16:22

Speymill still had the contract as at Sept 30th. I presume still in place as not heard anything to contrary. Perhaps someone knows the contract term.

The fees are much less than for SDIC ( US $ 1.8m ) although would still hurt badly if they lost the contract.

[davidosh] 24/3/2010 15:43

What is the situation at MCAU ? Are you sure that SYG has retained the contract as I suspect the new directors will have reviewed everything.

[lagosboy] 24/3/2010 14:01

schrubs

That is a pretty accurate summary, the pro's are SDIC share price has fallen 50% over last 3 months & now trading at 80% discount to NAV and likewise Macau trading at 50%+ discount to NAV.

[scburbs] 24/3/2010 10:12

Take care when valuing small asset managers on a multiple of potential earnings. What you need to consider is:

1. How long are their contracts.
2. Are they likely to be renewed.
3. Is the manager likely to be able to raise new funds to manage

All of these 3 questions mean that the valuation of SYG is to a large extent dependant on the performance of SDIC (as well as MCAU). If SDIC doesn't perform well then SYG should not be valued very highly on a P/E basis as it will struggle to raise new funds to manage and will be at risk of contract termination. However, if SDIC and MCAU do perform well then SYG may prove to be very cheap (despite the horrible balance sheet).

[lagosboy] 24/3/2010 09:13

Paulipilot is way off the mark, classic know the facts before the events and then complain about them when things don't go as you had hoped.

Also seems to think SYG shareholders, of which I am one, can be treated as non events.

Whilst recent share price action has been very frustrating, SYG looks quite cheap to me.

I have also started to buy a few (very few) shares in SDIC again.

[w1ndjammer] 24/3/2010 08:41

supprised nobody has commented on speymill MCAU results,
looks like SYG have done them proud, profit 15.3 mill
with 2.6 mill being paid to the manager SYG
and good continuing relationship, so paulipilot you got it wrong again
i will repeat again imho SYG is the way to play this group of companys.

WJ.

[scburbs] 22/3/2010 13:24

"crisis-proof". Now there is a real challenge for SDIC (and SYG), can they create a crisis out of a "crisis-proof" market?

[scburbs] 22/3/2010 13:22

"The quarterly evaluations of the data for the years 2003 to 2009 reveal a slight upward trend for prices of owner-occupied housing in Germany. According to the findings made by vdpResearch, prices in this market segment rose by a total of 6.6 percent between 2003 and 2009. Last year, there was a sideways movement which, vdpResearch believes, will continue in 2010.

"This finding is further confirmation that the German real estate market is highly stable and crisis-proof. The Pfandbrief Banks play an important part in this through their long-term property loans, the long-term refinancing of which is guaranteed to a major extent by Pfandbriefe," said Tolckmitt in conclusion.

The new price index for owner-occupied housing will be published on a quarterly basis, six weeks after the end of each quarter."

[lagosboy] 17/3/2010 19:05

bisiboy

Happy to leave it to you, grab JM by the shoulders and shake him hard, but remember do not attempt to out run him as he is a marathon runner of the real kind.

Best of luck.

I don't hold SYG any longer but if you could tip me the wink in advance 'she who must be obeyed, would be delirously happy and forever in my debt.

I think SYG peaked around 80p back in May 2006. That would do nicely.

[bisiboy] 17/3/2010 17:53

reality is both sdic and syg are undervalued.
i think i must speak with jm as i believe a solution can be found
where everyone benefits.

[crawford] 17/3/2010 17:25

lagosboy,
lol, I like your sense of humour, I can relate to the two kids and a wife.

[lagosboy] 17/3/2010 15:26

crawford

None taken, I know I can be a bit repetitive, 2 kids and a wife see to that, but I have no agenda,just maybe dementia........indeed despite my concerns I even managed to push the buy button, albeit I must admit just for 5000 yesterday.

Thanks

fft

What a lovely way to spend a freezing cold morning in Frankfurt,.... as they say ...... ' me and the committee have duly nominated you'.

I kinda know what the properties will be like from the accounts, I suspect that I will not be reminded of Mayfair of the leafy suburbs of Hampstead.

[crawford] 17/3/2010 13:39

lagosboy,
fair enough, no offense intended.

[fft] 17/3/2010 13:08

lagosboy,

the accounts and website provide summaries for frankfurt (423 properties) but there is no further breakdown that i could see as to location or type. The property company site before my previous post actually gave the streets where the properties were. If SDIC did that, it would be an easy job for someone to cycle round and have a look !

[lagosboy] 17/3/2010 12:49

point taken crawford, but nobody is forcing you to read them. If they are too painfull for you just don't bother reading them, they all begin with the name lagosboy so that should fairly staright forward.

[rightnice] 17/3/2010 12:23

Lots more posts here than on Interactive Investor even if it is all about Jim Mellon and whether or not SYG is a better buy than SDIC.

Anyway, getting to the point, there seems to be real support at this share price so unless there is any bad news between now and the results this is most likely to be the bottom and a good entry point.

For me its buy now with a stop loss set next week just incase those much awaited results are terrible and the price drops further.

With vacancy reported as stable at the last trading update and residential property values stable if not slightly up since June 09, despite the 9 million Euros mark down on swaps NAV should be broadly the same as before if not a little higher. Therefore any good news on the covenant issue should see the share price back to 30 cents where it was before the trading update. That's a possible 100% upside.

Risk it for a biscuit!!!