U And I Share Discussion Threads

[brwo349] 20/2/2018 14:28

A big worry is the outlook going forward. With Britain set to descend into a Mad Max style dystopian nightmare where will that leave UAI.

[horndean eagle] 14/2/2018 18:02

Such a love in for UAI. None of you luvvies want to comment on how terrible returns have been here for such a long time? Most of the gains are swiped by management. Run for their benefit over the years (have a look at their bonuses) rather than for shareholders.

[bogdan branislov] 14/2/2018 15:49

Interesting how the market has taken a 'we will believe it when we see it' approach to U and I's annual results. U and I have always been one of the most up front companies in terms of informing of delays or problems, this was one of primary reasons for investing in U and I. The idea that they would maintain a pretence of being able to hit full year targets, only to let us down at the last minute, which would be so out of character and while all this director and person associated buying is going on, it is not going to happen, targets will be hit. We should have an announcement confirming this in about 3 weeks. Of course when the results come out, end of April, we will be working on a new forward TBV, probably c330p+ per share - I think IC et al would maintain a buy rating up to about 30% to 50% ahead of forward TBV - a share price from about c430p upwards, but if we take the best part of a year to get there we will be closing in on another year end and another forward TBV - you can see where this is going. Bogdan

[speedsgh] 14/2/2018 12:29

Relax gents. The share price is for now firmly within the 18 month uptrend channel.

[bogdan branislov] 14/2/2018 09:13

Blue, lots of stocks I exit go up in price. The comments i made on DGOC discussed the risks that had emerged as i perceived them, but I did acknowledge i may be wrong re DGOC. But where the price goes does not determine whether I was wrong or right in my view, it is based on whether my call was correct based on evidence available at the time - my view on DGOC has not changed with the price rise, I am still cautious. The point is that as I discuss my holdings on various forums, if I exit I feel obliged to say so, but i think that my comments on DGOC were balanced given the uncertainties as I saw them. You should take a closer look at the sequence of John Rosier's articles, the comments and what was subsequently bought, you might be surprised, also the more concentrated component sub-division of his portfolio now introduced, although he has not explained which stocks are in the concentrated portfolio. Shares mag and IC have both pushed U and I to the summit of their recommendations now, I have been banging on about this to them for a year, they always had it as a buy but recent articles/portfolios have pushed it to the vanguard. You know my claimed gains of 1,000% in under 9 years are accurate as you yourself have benefited from many recommendations - Ithaca etc. It is worth bearing in mind that although my portfolio has grown at an average of over 30% per annum, it still feels like I am edlessly waiting for shares to re-rate nearly all the time, patience is always required. Whilst i post under different identities on different boards, the information and views I give regarding companies and investments is always correct to the best of my understanding at the time. The Russian/English - worked a treat on LSE during Ithaca, as Vladimir Pokrov not to mislead, I did not mislead on information, but they were a very eccentric bunch, like me perhaps, so it worked we all had a laugh and made money laughing, the Russian slant did not work here, so Bogdan improved his English, but money we are going to make!

[bluerunner] 13/2/2018 23:03

Bogdan is open and articulate?Yes, when he chooses to be.Click on his posts a few weeks ago and he was writing in pidgin English.Was that open and articulate?My holdings are based mainly on John Rosier on IC - not Bogdan Branislov /Bogdanovic who is being rather disingenuous and devious on here.On UAI I agree with your outlook.Let's just hope market corrections do not get in the way.

[mikett1] 13/2/2018 22:40

Being a bit disingenuous there bluerunner. Bogdan is open and articulate about his calls from my experience. I think that is why you seem to have very similar investments to him...

This is just a case of waiting for final results now. This company will become an absolute no brainer. Hoping they stick to their policy of paying "supplemental dividends equivalent to 40-50 per cent of free cash flow".

The change in the PE relative to the last financial year should be an absolute delight!

[bluerunner] 13/2/2018 16:22

Bogdan,Let's hope your predictions are improving.Didn't you sell DGOC at 76p a couple of weeks ago? And try to panic others into doing so on bulletin boards?It's up around 20% now at 91p.Great call!I have a larger holding in UAI so let's hope it exceeds expectations (though if you begin de-ramping on here, people should take note).We shall see soon enough.

[bogdan branislov] 13/2/2018 12:32

Another closely associated buy - I am beginning to suspect we might see an overshoot on end of year TBV here.

[speedsgh] 13/2/2018 11:53

£50k purchase yesterday by Gwendolen Knight (person closely associated with the Chairman, Peter Williams)...

Director/PDMR Shareholding -

[stupidboypike] 12/2/2018 11:15

Thanks scburbs, and your 988 post was spot on - well done.

[scburbs] 12/2/2018 09:20

I think that was £6-10m as per my post 988.

Good that they think they can hit targets without that. They must have some oven ready gains given the level of confidence with just over 2 weeks to year end.

[stupidboypike] 12/2/2018 08:27

Anyone like to comment on how big a deal the planning permission is?

[bluerunner] 09/2/2018 17:37

UAI is in Simon Thompson's Bargain Share portfolio for 2018 and is one of the few of the 10 tips NOT to have irrationally spiked in price on publication.In fact, despite being described as "an absolute bargain" at around 205p, the price has actually declined.FY results due in just over 2 months.

[spob] 05/2/2018 06:41

yes not fair to magazine subscribers to post that article

they may not have had a chance to buy yet

[bogdan branislov] 04/2/2018 13:42

IC Bargain Shares write up. Bear in mind Simon almost always talks to management before recommending - he also seems confident re the current year:
U and I Group (UAI)

Main: Share price: 206p

Bid-offer spread: 202.5 -206p

Market value: £258m

Website: uandiplc.com

If, like me, you believe that U and I Group (UAI), a specialist property developer and investor in regeneration projects, will deliver the £65m to £70m of development gains in the financial year to end-February 2018 as promised by its directors, then the shares are an absolute bargain. The company, formed by the merger of Development Securities and Cathedral Group in 2014, has a £6bn portfolio of complex, mixed-use, community-focused regeneration projects, and owns an investment portfolio worth £173m. The strategy is to unlock the value in urban sites in the London, Manchester and Dublin city regions.

For example, at the end of last year, U+I sold a site in Waltham Forest, north London, to housebuilder Telford Homes (TEF) for £34m, having purchased the site off-market in March 2016 and secured planning permission for a £130m mixed-use regeneration project. That lifted total gains booked by U+I in the current financial year to £26m. U+I also announced that it had entered into a joint venture agreement with a consortium comprising McArthurGlen, Aviva Investors and the Richardson family to deliver a new designer outlet in Cannock, near Birmingham. The £160m project will see the site developed into a 26,500 sq m designer outlet scheme. U+I has retained a 12.5 per cent interest in the joint venture and the consortium acquired the remaining stake, thus enabling U+I to recognise the profits from the scheme as outlined in guidance given at the time of the interim results last October.

Expectations of the company delivering the aforementioned £65m to £70m of gains were further enhanced after U+I announced in late December that it has let 94 per cent of office space at its development at 12 Hammersmith Grove, West London, with the remaining 6 per cent of space in solicitors’ hands. Chief executive Matthew Weiner confirmed that U+I is bang on course to book projected gains of between £9m and £11m from the project, which is being developed in partnership with institutional investor Aberdeen Standard Investments.

The point being that after accounting for all these gains, I reckon U+I’s underlying NAV per share is set to rise from 278p in February 2017 to in excess of 300p by the end of this month, as analysts predict, suggesting a closing book value of £380m. This implies the share price is trading on a 33 per cent discount to spot NAV, a hefty discount considering the company’s investment portfolio of 17 properties had a carrying value of £173m alone at the last balance sheet date, and boasts a contract rent roll of £12.6m. Moreover, there is likely valuation upside as the company disposed of £22.5m of non-core assets in the investment portfolio in the first half to end-August 2017, all above book value, and is planning a further £27.5m of sales too.

As is the nature of a property company, U+I has borrowings, but is certainly not overleveraged. At the end of August 2017, the company’s net debt of £159m represented a comfortable 47 per cent of its net assets of £337m with the aforementioned £12.6m annual rent roll covering the 4.4 per cent average interest charge payable on its debt facilities. Since then the company has agreed terms to restructure its long-term debt facility with Aviva, which will shave annual debt servicing costs by 0.75 per cent.

Importantly, the quality of the tenants is high and voids are low, with governments and listed companies accounting for two-thirds of the mix, including household names such as Waitrose and Sainsbury. This mitigates the risk of tenant default. Indeed, over 99 per cent of rent is collected within 30 days.

The development pipeline is impressive too. It includes the £150m Preston Barracks project in Brighton, the largest regeneration project to have been consented in the City. Also, following a review of the delivery of the company’s wind farm projects, and after taking into account strengthening investor demand for alternative assets with long-term income streams, U+I is now delivering projects on a forward sale and build-out model rather than individual site sales. This funding structure is in line with its business model for regeneration projects. It’s sensible to do so as it delivers a higher level of profitability per project, with the first wind farm due to realise between £6m and £8m of profit in the second half of the financial year to end February 2018.

So, with the company set to report a sharp hike in NAV per share, and rewarding shareholders with an annual dividend of 5.9p a share, implying a dividend yield of close to 3 per cent, and special payouts on top, I feel investors are missing a trick here. Indeed, the board reiterated guidance at the interim results that the business is on track to deliver £155m of development gains in the next three years to generate a 12 per cent annual post-tax total return. The implication being that the shares are rated on a massive 40 per cent discount to likely NAV at the end of February 2019.

If, as I suspect, the company’s management delivers on the £65m to £70m first year target of development gains when it issues its full-year results at the end of April this year, then the huge share price discount to NAV is set to narrow markedly. Buy.

[scburbs] 02/2/2018 11:35

Good to see UAI in IC Bargain Shares. Thanks for sharing speedsgh.

The Thatcham sale (which won't generate a material gain as it was valued at £15+m) is an investment asset so isn't relevant to the trading and development gains target.

I think the three main projects to sort this month are.

Funding strategy for Preston Barracks (£8-10m profit)

hxxp://www.constructionenquirer.com/2017/09/29/300m-brighton-preston-barracks-regen-approved/

Sale of Wind Farm project (was due to complete in December) (£6-8m profit). I haven't seen anything saying they have sold this, but might have missed it.

A residential scheme which went for planning on 23rd November.

I would have thought the last one (£6-10m forecast) would be the greatest risk as haven't seen any positive news on planning. However, they may have other gains which could cover a miss on that one.

[bogdan branislov] 02/2/2018 10:12

A couple of thoughts re this years target: 1. The scheduled gains for the next 3 years equate to about 70% of the current market cap - UAI is extremely cheap relative to forward earnings. Even the already realised gains for this year would likely give UAI a single figure PE ratio, if some earnings slipped into early next FY, it would not be a big issue for the business. 3. The bigger concern if there was any slippage this year would be the fact that management have so adamantly stuck to the forecasts. My point here is that UAI management have earned a well deserved reputation for being up front and realistic. When last year slowed a little post the Brexit vote, they quickly informed us. If at the half year point, this years target looked too challenging, the time to tell us would have been then, little harm would have been done. The fact that they have not toned down their full year optimism at all, when it would so clearly have been in their interest to do so if the targets were not achievable, suggests to me that they have built in a margin of safety here and the targets will be reached. If you look at the half year results presentation on the web site, under 'view all' in 'investors' there are incremental gains grouped together and yesterday's announced sale ahead of book value, should also book some profit is not mentioned in the schedule, also some of the major realisations already booked, have come in ahead of forecast in terms of sale price or occupancy rate etc. All is well here. Bogdan

[bluerunner] 01/2/2018 22:22

Speedsgh - you are correct.Well-spotted. UAI is indeed on the IC Bargain Shares portfolio.

[bluerunner] 01/2/2018 21:43

Interesting. How do you know that? I've just checked on line and can't see anything. The magazine is out tomorrow.

[speedsgh] 01/2/2018 21:35

UAI included in Simon Thompson's Bargain Shares 2018. Expects them to meet trading/development gains target for current FY & yr end NAV to exceed 300p which he reckons will lead to significant narrowing of current discount. AIHHO

[rathkum] 01/2/2018 18:54

Exactly. Looking at the share price reaction it seems unlikely to achieving that figure of £20.

[bluerunner] 01/2/2018 11:31

By my calculations, a further circa £20m in gains needs to be realised this month to attain targets.