U And I Share Discussion Threads

[this_is_me] 08/9/2021 07:38

Good news this morning. Confirmed planning permission is always a relief and reduces risks considerably.

[checkers2] 08/7/2021 12:46

UAI featured in the Ennismore July NL - U & I Group – UK Property Developer (1.8% NAV) U & I Group (U&I) is a GBP 117m market capitalised, property investor and regeneration specialist that we’ve been invested in for over five years. We are more confident than ever that the market is currently heavily undervaluing the company. Since we last wrote back in April 2016 the most significant change which gives us increased conviction is the previous Chief Executive Officer and Chief Financial Officer having been replaced. This we believe will be helpful in the execution of the strategy to simplify the business model and will also allow the company to be run on a much leaner cost base, both ultimately helping to achieve stronger equity returns. Richard Upton, the previous Deputy Chief Executive Officer, has now taken over the reins and we have full confidence in him not repeating the past mistakes of the business but rather having a laser focus on increasing returns on capital by disposing of non-core projects, leaving a much smaller, simpler portfolio with the best risk versus return characteristics suited to the company. Since we last wrote the investment has been an extremely disappointing one with the share price falling by around 30%, adjusted for dividends, not helped by the book value also falling by 25%, on the same basis, to GBP 203m. The fall in net asset value has primarily been due to write downs in their property portfolio of GBP 55m, especially in the retail area, not helped by the recent Covid-19 situation, alongside some other poor legacy investment decisions. Clearly, we should not have invested in U & I at that time with too many uncertainties over that executive’s previous track record and decision making. Last year was a particularly poor year for U&I with GBP 45m of impairments taken on properties and development projects, however we do feel the property portfolio and work in progress on projects has now been freshly looked over and discounted more aggressively by the new management team and gives us a lot more confidence that the balance sheet is now conservatively valued overall. Currently the company has an investment portfolio of GBP 95m, a non-core development and trading assets portfolio of GBP 126m and core regeneration assets of GBP 58m. Going forward the new strategy is to dispose of the 35 non-core assets which we believe will generate a small book gain from the circa GBP 110m of cash in, net of debt attached, over the next two years with bigger gains further out. It will obviously help to reduce the leverage further from the GBP 72m at the year end and release capital to be reinvested towards the regeneration part of the business, which have the highest targeted returns. The investment portfolio is held to help give an ongoing revenue stream and consists of 15 assets now which will be optimised going forward on a total return basis, as it stands around half the portfolio is in retail & shopping centres with commercial, leisure and some land making up the rest. The equivalent rental yield overall sits around 8.5% which given the overall mix seems prudent to us. The investment portfolio has an expensive fixed long-term debt facility which we give a negative value at GBP 5m above the value of the debt on the balance sheet. The regeneration portfolio currently consists of five schemes, of which we expect four are more likely to proceed - these are based in Manchester, Cambridge and two in London. The company believes these four schemes have a total development value of over GBP 5 billion and profits of over GBP 1 billion, over the next decade. Clearly U & I don’t have the finances to develop out schemes of this size but instead would partner up with suitable partners and would take a small proportion of the schemes’ value as they develop. We and the company were very disappointed by a recent decision by the Secretary of State for Housing reversing a previous planning permission from Lambeth council to help to regenerate the old London Fire Brigade Headquarters, but it does show the uncontrollable political risks in certain regeneration projects. We believe this decision will knock off around GBP 11m off the book value of U & I as work they’ve capitalised on this scheme over the last number of years will most likely now need to be written off. Notwithstanding this we have more confidence than ever in the execution of the management plans going forward. The streamlining of the company’s cost base is a key part of the strategy in increase equity returns in the business and is assisted by the reduction in the number of the assets U & I are involved with. Overall, the plan is to reduce overhead by more than 40% from GBP 21m one year ago to GBP 12m by March 2023, this is mainly being achieved by reducing, now, unneeded staff resource due to a smaller number of projects over the medium term. This implies, ceteris paribus, circa 300 basis points increase in the structural return on equity of the business. It’s good to see our continued belief in the undervaluation of the share seems to be in agreement with management as they’ve recently spent around GBP 250k buying shares around current levels. We value the business prudently on a sum of the parts basis, putting the investment portfolio at a 10% discount to book value, the non-core assets at book value and the regeneration assets, expected to proceed, at a premium of 50% to book value given the huge potential upside from these schemes. Netting off debt and other deductions mentioned leaves a fair value of GBP 200m, allowing then a discount on this of 15% gives upside to the current share price of over 45% over the next 12 months. Can see here: hxxp://www.ennismorefunds.com/documents/OEIC/OEIC%20-%20Most%20Recent%20NL.pdf

[spectoacc] 02/6/2021 07:20

Upton still putting his money where his mouth is, in fairness: Price(s) Volume(s) £0.949 7,500 £0.956 94,639

[this_is_me] 27/5/2021 13:33

Initial over reaction to the results now reversing. Seriously undervalued.

[spectoacc] 27/5/2021 11:58

Thanks @value hound. Much as I like UAI (also in from much lower), I make a rule of selling in to Ramper Tommo tips. Got all sells away over 93p.

[value hound] 26/5/2021 21:26

Tipped by Simon Thompson in the IC tonight FWIW; "...analysts expect net asset value (NAV) per share to bottom out at 150p in March 2022, from 163p in March 2021, implying the shares are trading on a 40 per cent discount to forward book value. Positive planning news on 8 Albert Embankment and Morden Wharf mixed-use schemes in the next three months should narrow that valuation gap. Recovery buy." I hold from 65p last September

[epistrophy] 09/4/2021 12:47

Good spot. Looks like they are serious about deleveraging the balance sheet. "U+I’s national portfolio contains around 15-20 similar assets that the company is looking to divest over the next 12 months."

[scburbs] 09/4/2021 10:45

Non-core sale. Should have an update soon. Not expecting much progress to 31 March, but should hopefully start to accelerate now as the major PPP projects get going along with further non-core disposals. "Snow Centres has bought the 167,000 sq ft indoor ski slope, part of the wider Beyond scheme next to the Trafford Centre, for an undisclosed sum as U+I looks to offload non-core assets." [...]

[this_is_me] 15/3/2021 13:31

It looks like we have another step up happening.

[epistrophy] 15/2/2021 13:56

Another 250k printed at 84.5p. Edit: and another 145k ...

[epistrophy] 13/2/2021 10:08

Oh, and I found this interesting (from the post-results Q&A...) ------------------------------------------------------------------------------- Richard Upton, U and I Group PLC - CEO & Director [3] -------------------------------------------------------------------------------- Thank you, Marcus. The -- another question, the highest return investment you can make at this point is to buy your own shares. Is there any scope for this? Again, another question -- another good question. I -- that's always an option open to us. We would like to suggest that we are significantly undervalued, as I said in the presentation. And of course, that opens up that option, and that's always for consideration by the Board, and we'll reflect on that over the coming weeks and months. Now I think that really sweeps up the core questions that we're being asked. And if I may, if there are no more questions, it just remains for me to thank you for joining our half year results call this morning, and have a great day. ------------------------------------------------------------------------------- Running costs, despite the mitigations, still look pretty substantial compared to the market cap down here... a sale would certainly be one way to address this!

[epistrophy] 13/2/2021 09:31

Followed Upton with a top-up on Friday. I think there is a reasonable chance he will look to sell up when things normalise, like he did with Cathedral Group in his former role.

[apollocreed1] 31/1/2021 23:58

@spob -I agree. I very nervously bought a little more 3 weeks ago at 60p because when I'm down 70% from my initial entry price I assume there must be something seriously wrong that I'm missing.

[spob] 31/1/2021 09:05

yeah i wonder if there is a bid on the way how this got so ridiculously cheap is beyond me but hey, it allowed me to buy more at silly prices and i've got all the time in the world so i really don't give a damn either way

[w1lbur01] 29/1/2021 16:40

Nice closing price

[sphere25] 27/1/2021 11:41

I think that's Breakout City folks with the price currently up 5.4% at 82p. It farts about alot this but it looks a good bull trend of a chart now. Well done if you bought in the early 60's. You've done miles better than I have. More options to take profits for all! The market that keeps on giving. That's a wrap here. All imo DYOR

[w1lbur01] 27/1/2021 08:29

Decided to follow Upton today

[spectoacc] 27/1/2021 07:32

Upton still buying, happy to stay long.

[spectoacc] 25/1/2021 15:36

Has taken him over 3%, and he ought to know. But suspect he's nearly the sole reason the share price has bounced!

[this_is_me] 25/1/2021 15:25

Yes, that is a serious amount of buying. I'm tempted to add some more.

[spectoacc] 25/1/2021 14:44

Upton been piling in it seems.

[sphere25] 25/1/2021 09:06

Just highlight this horrible share, which I find impossibly impossible to buy (because it nearly always gives the run around), but looks set to test a key breakout. The last move from early 60's to early 74p now has been good for those who managed to push the buy button. It MIGHT make another leg up - 75p looks a key mark on the chart. The offer looks thin at the moment but hard to tell with this one if there are sleepy sellers to come in and fill the offer or apply the order when a particular price point is hit. Tend to see both in markets. Tempted to have a go as a short term play only but if I buy, it 100% ABSOLUTELY DEFINITELY NO SIREEE won't breakout! :-) All imo DYOR

[elsa7878] 19/1/2021 11:49

Snouts in the trough for too long when things were going well and now clear that their interests were not always aligned with their shareholders. Finally some sense and a realisation that costs need to come down significantly. Can't act like you're a FTSE 250 company and spend money accordingly. Is there enough in the portfolio to make it an interesting investment...? No idea!

[asalvador] 19/1/2021 08:49

hxxps://www.thebusinessdesk.com/northwest/news/2072610-mayfield-manchester-developer-launches-major-restructure-after-sinking-to-50m-loss 'Mayfield Manchester developer U+I has embarked on a major restructure with its chief executive and chief financial officer departing after it recorded a £50m half-year loss. It has begun a 100-day review of the business that will look to slash costs and refocus entirely on regeneration projects. The review will be led by Richard Upton, its chief development officer who has been made chief executive with immediate effect.'