St.modwen Properties Share Discussion Threads

[redartbmud] 03/2/2016 19:01

jef

Agreed. Time to move on. We all come from different angles, with different goals. holding Smp shares is by personal choice.

[jeffian] 03/2/2016 18:56

This is all getting a bit surreal. You and others asked why the dividend was not bigger and I made a suggestion. If you don't like it or agree, fine, but you'll be left wondering why unless you can think of a better answer!

[eggbaconandbubble] 03/2/2016 13:25

Yes! Provided you have a tenant.
OK. Forget the gold analogy.
Get a tenant in paying rent and then mortgage the house. Build another house with the loan; put a tenant in and so on. Each time borrowing the same percentage of property value which means a greater loan each time as the value of property rises.(i.e revaluation)
Help yourself to a regular 'divi' along the way.
Sell all when the Chancellor starts to make life difficult.

[jeffian] 03/2/2016 09:29

This is a property company. It has annual revaluations. That may go up, or it may go down. The resultant impact on P&L account, in either direction, has to be judged accordingly. Safer to look at underlying (sustainable) earnings or realised gains (though the latter,by their nature, will be one-offs).

Never mind gold, think of your house (property, geddit?). It goes up by £50,000 so you think you'll treat yourself to a £25k 'dividend'. Only you haven't got the cash (because you haven't sold the house and realised the gain), so you borrow it on an increased mortgage. Then the value goes down again. Was that a sustainable dividend?

[solomon] 03/2/2016 09:19

I think you make a good point egg. However, gold has no income value, whereas the 'cellar full of gold' that SMP has does produce an income. It is worth keeping even if its value has increased.

[eggbaconandbubble] 03/2/2016 08:18

I've got a cellar full of gold. It's doubled in value, but I'm not going to sell any of it because my accountant says it's only a paper profit!!!

[jeffian] 02/2/2016 23:19

See #512. Dividends are paid in cash; 'revaluation' profits are paper profits.

[aaainvestment] 02/2/2016 10:35

Peaeff - I agree it's a balance and not all about dividends, I was simply pointing out where I thought the weakness may lie especially as the market is so weak at the moment that many great companies are paying a great dividend.

That said, I still invested and see no reason why the share price should not be nearer £5 than £4, the Covent Garden project is tremendous. SMP looks like a solid and reliably investment, very important to some, including me.

The fact sheet on the company's website gives a flavour of the Covent Garden potential. The share in the development could show huge paper profits before it is ever completed and the scale of it struck me as a possible reason for a cautious dividend policy - as it expands I suppose it will soak up lots of working capital. I don't know what the accommodation prices are in that part of the city but some could be multi-million pound units with the development itself driving local prices up.

[semper vigilans] 02/2/2016 10:06

Whilst SMP have done well at what they do for years, long term, larger developments mean that with property near to the top of its cycle, the future may not prove to be as lucrative.

[jeffian] 02/2/2016 10:01

I think the answer to the dividend question posed by many here is that a substantial portion of SMP's profits are valuation gains (paper profits) or one-off gains on the disposal of properties. Look at the cashflow statement (cash negative with these stripped out).

[peaeff] 02/2/2016 09:54

AAA

In all honesty I am not so much a dividend person. I would rather take what I consider to be a nice earner at any given time. SMP has been very good at supplying me with such profits over the past 3 years and I believe they will again.

I take on board the comments you make and agree that the dividend is a poor reflection on the success of the company, especially taking into account the status of the contracts it manages to negotiate.

One never knows, until we are told, what the next few major undertakings may be but I am confident that when they are announced they will make a significant difference to the share price

The fact remains that the results are outstanding and at some stage will have to be acknowledged by the markets. I have a target price of 455p for myself and that figure could be reached very quickly with the right momentum.

regards

[creative_accountant] 02/2/2016 09:44

Maybe the new CEO will look at the dividend policy, which should help the poor share price performance.

[aaainvestment] 02/2/2016 09:09

Peaeff - it's dividend mate, it's a massive disincentive to investors because there appears no reason why they are not paying a higher one.

There are loads of secure companies that don't pay dividends or small ones because they are growing or having problems, but that doesn't fit for SMP they are not under pressure or in need of building financial strength, they appear to have a policy of not distributing the gains to shareholders, I suppose it's OK for some but to most shareholders it's intolerable because there is never a real pay-day.

When does a shareholder receive a decent dividend? 2020? 2030? it needs aligning with profits, most investors will choose the likes of Vodafone or some other FTSE company that pay a %5+ dividend and have share price growth. I'm back to what I said in a previous post, who are the management running this for?

As I said, I have just bought in and can see this going higher in the coming days/weeks/months, but until they sort that issue out they will retain a silly PE ratio.

[jaws6] 02/2/2016 09:09

seen 460 hold note today

[redartbmud] 02/2/2016 08:57

AAA

I agree with you. I was merely pointing out how they think and operate. They have not changed the mindset as the company has grown. I would have preferred a steady increase in dividend yield.
The New Covent Garden project has been explained as transformational for the business. Are you prepared to hang around to see the outcome?

Clarke and Leavesley families have been slowly selling down their holdings. The elders are now falling off their perches, one by one. Perhaps, in time, there will be some pressure from new shareholders.

red

[bluerunner] 02/2/2016 08:55

Eggs - 'value / growth' would have been more accurate I admit. But certainly not income.Admittedly the value is pretty well hidden at the moment. But I'm confident of a positive re-rating.Got to go.Good luck to holders.

[peaeff] 02/2/2016 08:50

It's very hard to understand the current market reaction to these figures but the day is young and things may improve later after the presentations have finalised and everything has been analysed to the umpth degree.

The possible reason for this immediate reaction to my mind could well be that until the full fundamentals have been analysed these figures represent a fantastic year of trading which SMP may well have problems repeating. However one does not get that impression reading management presentations.

This share topped out at around 490p last year. Issued statements from management have been excellent and the actual figures have born out what they have forecast so why the disparity? and the poor immediate reaction.

Perhaps they have dropped the price to accommodate a couple of institutions who weren't prepared to 'take a chance' beforehand.

Just thinking out loud really all will be revealed in coming days.

regards

[eggbaconandbubble] 02/2/2016 08:50

'growth business' On a PE of 4! You havin' a larf?

[aaainvestment] 02/2/2016 08:43

redartbmud - but its a mature business not a growth company and even level headed long term investors that will accept lower levels of income want 2 - 2.5%, the share price growth tells everyone it's not a growth company.

If it was a true growth company the share price would have soared this morning, I'm amazed the share price has fallen today. Bought a few, but the dividend my main concern as a newby - that should tell you something about where the problem lies.

The management need challenging on who they are running the company for IMO, smack of cosy little niche for them.

[bluerunner] 02/2/2016 08:42

I think most people are here for the growth, to be fair. I barely consider the dividend.This lag is similar to that experienced by house-builders a year or so ago before they re-rated daily sharply.When that will happen is anybody's guess though general market sentiment is not helping.However, I'm holding this for the long term as I am confident value will out.

[redartbmud] 02/2/2016 08:33

blue

The poor dividend yield is the Achilles heel.
Since the days of Stan Clarke, they have run it as a growth business. Income is a minor consideration. It helps in hard times, because it isn't a drag on cash but at the same time puts off a certain class of investor.

red

[aaainvestment] 02/2/2016 08:31

I was just about to ask the same question - why the stingy dividend policy?

With sparkling results and profits like they are producing the share price should be way higher, but the dividend for a mature company appears ridiculous.

BP. have just retained theirs in the face of a very poor performance!

[bluerunner] 02/2/2016 08:27

Broker upgrades and press coverage may spark a re-rating. The share price is certainly at bargain levels IMHO.

[redartbmud] 02/2/2016 08:25

egg

Well done. Didn't know that Smp was part of the Monopoly game. It doesn't appear on my board.
When do you get out of short trousers?

red