Tritax Eurobox Share Discussion Threads

[hpcg] 19/12/2023 08:56

Here is a different proposition to GABI. This is long term income which ultimately will increase. GABI might, but is not certain to be, a short term capital gain as the book is run down and stragglers sold, depending on what shareholders want. It seems to me there must be less demand for private lending when interest rates are higher, and that means fewer vehicles to provide it. I think shareholders are likely to vote against continuation. I probably will myself, though will wait until nearer the vote to decide.

[loglorry1] 19/12/2023 08:43

I'd say there was different value elsewhere. Not sure it is better. I have bought quite a bit of GABI and some DGI9 lately. I'm not as keen on DGI9 but I like GABI a lot now. I have a fair chunk of EBOX from lower. It's lower risk and has high quality assets but I don't see as big an upside.

[hpcg] 19/12/2023 08:39

I'm staying in for what I physically hold. Spread bets will ultimately be cashed in once a more reasonable value has been reached, circa 75-80p. I'm considering adding but at the moment I'm running leverage as hot as I care to reach.

[boystown] 19/12/2023 08:19

So are all you shrewdies staying in here - or is there better value elsewhere??

[speedsgh] 18/12/2023 15:55

1.25 euro cent Q4 div equates to 1.0753p.
5.00 euro cent full year div has amounted to 4.3164p

EXCHANGE RATE FOR DIVIDEND PAYMENT -

TOTAL FY to 30/9/2023 - 5.00c/4.3164p
Q4 (Jan 24) - 1.25c/1.0753p (of which 0.43c/0.36990p interest distribution)
Q3 (Sep 23) - 1.25c/1.0631p (of which 0.56c/0.47627p interest distribution)
Q2 (Jun 23) - 1.25c/1.0780p (of which 0.50c/0.43120p interest distribution)
Q1 (Mar 23) - 1.25c/1.1000p (of which 0.38c/0.33440p interest distribution)

[nickrl] 06/12/2023 21:15

@hcpg #1214 the waterfall chart doesn't take account of the post period disposals this is what ive guesstimated.

[alan pt] 06/12/2023 18:10

I haven't always loved the Tritax approach - thought their fees were too high and their marketing a bit too slick

But I have to admit, they have really nailed the timing with the disposals and cashflow management and the assets have proven pretty robust so far

Only REIT where I felt positive enough to hold in quantity, very glad that I did!

If DGI9 could only borrow a few of their brain cells for an afternoon...

[chucko1] 06/12/2023 15:07

Removal of fear of HIGHER interest rates is a first step to cutting the extent of the discount. We see this in the price actions of many REITs the past two or three weeks.

It is worth noting that the expected cut in rates over the coming year or two are already reflected in the swap rates, and forward contracts of the relevant currencies. Upon a reversal of this, and that is something not wildly unlikely, there could be further trouble for some REITs.

An ACTUAL cutting of rates combined with a long holding period is the base case of what I both expect and am positioning towards. There are some short term gains to be traded from the IT markets as prices swing too far one way and another. But these gains are only moderate as compared with the gains from enacting my base scenario.

And even if I am wrong, holding the stronger REITs with the strong balance sheets and management will STILL prove profitable absent of a resurgence in inflation and HIGHER rates. That is still a possibility.

[williamcooper104] 06/12/2023 13:47

Any performing reit will trade at a small premium to NAV It's remote that it's going to happen soon But not over a 5 year period Key think being asset performance, no balance sheet worries and a management that doesn't screw things up (which is beyond too many IT management teams)

[apollocreed1] 06/12/2023 13:40

@Williamcooper104 & Pyufak- The possibility that EBOX could get back to a premium currently feels remote but it does seem that we will be having significant interest rate cuts next year so there could be strong upside to the price in such an environment.

[hpcg] 06/12/2023 11:00

nickrl - there is a full waterfall chart of rental movements in the presentation, no need to estimate :) Indeed the presentation text and Q&A left me with now questions other than around the sanity of the analyst that asked about scale. Clearly someone that couldn't care less about shareholders but just trying to drum up corporate action fees.

[nickrl] 06/12/2023 09:43

My guestimate is recent sales has lost them E3.5m but they've also largely eliminated the RCF with disposal cash so limited impact on overall free cash and divi remains covered. Not sure why they shelled out on new caps for the RCF given there stated aim is dispose of more assets to get LTV down. Anyhow there refis have the potential to hit the sweet spot with ECB interest rate cutting cycle.

Biggest issue here is the palaver trading it on ii!!

[williamcooper104] 06/12/2023 07:41

PSH (which I've long held) has always traded at a mega discount and nobody can force Bill A to do much about it - and that's despite amazing performance However the higher quality, specialised REITs often traded at premiums to NAV The underlying assets of EBOX are of course not as quickly liquid as listed equity but they are none the less relatively liquid as been proved by recent sales - those sales also validating NAV and indeed in some cases reminding us why these trusts traded at premiums

[williamcooper104] 05/12/2023 20:30

The scale is answered by merging with ASLI - once ASLI cuts their divi and EBOX lowers its leverage a little more - both of which hardly insurmountable Both are managed by Abdrn (or whatever they're called now)

[pyufak] 05/12/2023 20:25

Apollocreed1 - I really think you’re comparing apples and oranges in that comparison as it is a different asset class underlying but each to their own.

Listened to the presentation today - happy this becomes a long term income hold with an excellent entry yield. First ECB rate cut priced for March and 100bp of cuts next year. If they materialise I think EBOX gets a nice chance in the next 18 months to refinance the green bond. Some price discovery with the recent sales and reiteration the covered dividend a focus.

Interesting question from Barclays regarding lack of scale. The negative I guess here is while they are now well positioned to maintain the dividend and eventually grow it one would hope. Capacity for other interesting asset management would appear constrained by the high LTV unless they realise further sales …

So maybe it all goes a bit boring here. I’d be happy with that to be honest to clip the dividend.

[hpcg] 05/12/2023 17:58

EBOX had less negativity than almost the entire other listed UK "REIT" sector. Plenty of those are still garbage. One of the reason I don't intend to trade Eurobox would perhaps be the temptation to chase high risk yield. I expect very few of us bought at 45p, I loaded up low 50s for the most part, with just 10% of my holding purchased at 45p, of which a part was serendipitous income from elsewhere. It is difficult to hold cash when there are simultaneously a lot of value opportunities. I count my best deal is buying and selling at 62p and 63p in the spring.

I recommend the presentation, including the Q&A, it covers a lot. Their perspective on the dividend come the bond refinancing is to maintain the dividend "broadly fully covered".

[apollocreed1] 05/12/2023 17:37

Looking at EBOX now, it seems to be on a 36% discount. I can sell EBOX and buy Pershing Square Holdings on a similar 34% discount, but Pershing has the advantage of liquidity of its holdings and clarity of its valuations. It's also a FTSE 100 company.
Maybe you can't compare the different asset classes that they own, but I don't see the point of taking on the risk of holding any IT that's on less than a 40% discount when PSH is available on a 34% discount.

[kenmitch] 05/12/2023 17:02

Congratulations SKYSHIP on your justified conviction about EBOX. We now know it was crazily oversold down at 45p. Unfortunately I’ve a similar rule to SKYSHIP but not just like him no more than 10% in any one share or Investment Trust but also a maximum stake on a share and Trust too, so my top up at 45p had to be modest after the main buy around 55p.

When, as has happened with bb comment here and on other REITS, comment is very negative, people sometimes forget to question whether that bad news and the negatives they cover, might already be priced in. So often with quality shares and Investment Trusts, it turns out that the best time to buy is when sentiment and comment and the share price is dire. Buying bombed out shares and Investment Trusts has been my preferred tactic for many years and it has worked far more often than not.

Where I differ from some is that once I’ve bought a high yielding share or REIT I tend not to trade it but unless news suggests it’s right to sell, I then hold and collect the dividends for multiple years. That works too. e.g AEWU bought in an even worse REIT downturn in 2020 at 63p to give 13% annual yield even without that 50% share price gain on top. I just accept that the capital gain will reduce in dips like the recent one, but so what as long as that big dividend is held.

[williamcooper104] 05/12/2023 16:43

Yep if they get the leverage down and income is all headed the right direction they will just pay some of the divi from capital Or more likely do the fashionable thing of buying an in the money swap - it's doing the same thing but looks better I added a little today - annoyed couldn't get some bonds at 7.1 as would be looking to trade those now to put more into the equity

[skyship] 05/12/2023 16:21

hpcg -

# had to reduce as if I hadn't EBOX would now account for 20% of my SIPP. I'm now back down to my usual MAX of 10%

# I suspect they will seek a few further sales as the LTV is still at 44%. With cover at 110% the divi should still be covered in 2024

[hpcg] 05/12/2023 16:06

Sky - yes fair enough, I know you trade REITs as a standard practice. On the other hand I want to lock in a chunk of long term income that now doesn't need a huge amount of time spent on monitoring outside of conventional macro surveillance. I've put in a big reminder in my calendar to sell as soon as it looks like the next rate hiking cycle will start!

I think they can maintain the dividend now, but will likely have a few years uncovered. It still depends where the 5 year is in a years time and what margin lenders want. At circa 2.7% its more than fine, at 3.2% a couple of years of 110% coverage will smooth the path. 4% would need more asset sales, but that seems so unlikely now. The revolver being out of the way makes a huge difference.

[riverman77] 05/12/2023 15:13

Yes interesting to read some of those posts from late October/early November. Glad I took the opportunity to really load up on this one!

[nimbo1] 05/12/2023 14:14

I Worte when it was 40p something was going wrong or it was an amazing opportunity. Pleased it was the latter.

Im holding a 10% position here - as the returns on income alone enough to justify it.

[skyship] 05/12/2023 14:00

hpcg - just rectifying a heavily overweight position. At one stage had a 15% allocation here - far too high; 10% my usual MAX.