Value And Indexed Proper... Share Discussion Threads

[spectoacc] 06/11/2020 12:06

Not sure how they're managing those rent collection stats, but fair play to them if true.

Divi perhaps not getting cut then, but certainly not going anywhere for a long time.

[topvest] 06/11/2020 10:41

The fact sheet was correct then, other than taking a hit on 7% of their rental income in q2.

Milton Keynes - Former Adelie Foods Industrial Unit

Adelie Foods went into administration in May 2020. The lease has now been assigned to Winterbotham Darby Ltd at the same rent with the unexpired lease term increased from 7.6 years to 14.9 years, with a tenant's option to break in 2030. No rent was received for Q2, but it has been fully paid for Q3 and Q4. Since 1962, Winterbotham Darby has been supplying high-quality continental food, such as olives, antipasti, continental meats and pasta to the major UK supermarkets and food suppliers.

[topvest] 06/11/2020 10:40

This is excellent:

For the six months to 30 September, 96% of the contracted rent roll on VIT's properties has been collected. In the second quarter, 93% was collected for April - June with only the rent for Adelie Foods in administration at the Milton Keynes industrial property written off. 100% of the contracted rent roll for July - September, the third quarter, has been collected.

[topvest] 06/11/2020 10:37

I didn't read it that way. Read it with this:

The conclusion of the review of our investment policy is that we will make modest use of the power to distribute from capital reserves in the short term, but thereafter we will aim to rebuild the cover for the dividend. This will be assisted by the refinancing of the 11% Debenture Stock at a net interest rate of 3.17%, as detailed in the 2020 Annual Report, but will mainly be achieved by an increase in the property portfolio which is producing a high and reliable yield as reflected in the property report in the Interim Report, with 96% of rents collected over the past six months, 100% over the past quarter, and a robust capital performance.

[spectoacc] 06/11/2020 07:43

"The conclusion of the review of our investment policy is that we will make modest use of the power to distribute from capital reserves in the short term, but thereafter we will aim to rebuild the cover for the dividend."

That's saying they're going to cut the divi, unless I'm misreading it?

[topvest] 04/11/2020 12:38

On the thumbs down I have a Woodford lover that has been trolling my posts for months. Anything I post gets a thumbs down - apologies. I was correct on Woodford by the way and well ahead of the curve!

[topvest] 04/11/2020 12:37

Yes, looks to me like Oakshott wants to turn this into a property vehicle. I would support that as they have a better record on that side. It would be nice for the Board to actually make a clear announcement of what is going on. Transparency is appalling and well below par. Even the Sep property valuation was mis-communicated. When are the interims?

[charlesdb] 04/11/2020 09:45

Incredible. Definitely a problem, with the property portfolio and a battle at Board level.

[spectoacc] 04/11/2020 09:19

Don't think I've seen a manager sack itself before.

Has been something going on since Oakshott got the push, and the votes at the last AGM. But whatever it is, they've not really been telling us.

Also says nothing about OLIM Property?



Edit - our down-ticking troll @Johnwig is quick off the mark this morning.

[topvest] 04/11/2020 09:16

All rather bizarre. One gets the feeling that there is some form of battle between the Board and OLIM. The Board normally fires the investment manager, but it seems that OLIM have decided to jump before they are pushed! Probably good news though as their equity performance has been poor for some time. Converting the trust to a REIT might be on the cards?

[spectoacc] 04/11/2020 07:15

Curious:

"The Board of Value and Income Trust PLC (the Company) announces that it has received notice from OLIM Limited, the investment manager responsible for the management of the Company's equity portfolio, of its intention to terminate the Investment Management Agreement entered into between Value and Income Services Limited, the Company's Alternative Investment Fund Manager, the Company and OLIM Limited (the Agreement). The Agreement will terminate on 31 January 2021. "

[topvest] 25/10/2020 14:50

Yes, so would I, but they either copied over the wrong commentary, added too much detail as it will be in the interims or the 100% was not technically correct given some lease restructurings in the period. Time will tell, but I think its probably more positive than negative.

To be fair, the pubs, bingo hall and bowling alley are not technologically obsolescent unlike grubby high street shops. Just having a challenging time until COVID-19 subsides! Bowling alleys have been doing well since reopening.

[spectoacc] 24/10/2020 17:06

If they're on 100% rent collection I'd be flabbergasted.

Edit - wondered if it was the difference btwn billed rent & total rent, but clearly says "contracted". Easy enough to only bill the ones who've said they'll pay, then claim 100% success.

Not forgetting that for all their bluster about no retail/retail warehouse, they've got many pubs, a bingo hall, and a bowling alley.

[topvest] 24/10/2020 16:35

My general feeling though is that OLIM are much better at real estate investment than they are at equity investment. They have a poor record on equities over the last few years, with a tendency to pick value traps!
The strategy review is overdue.

[topvest] 24/10/2020 16:30

Doesn't seem very consistent with this:

"Rental Payments

We have been working closely with our tenants during this unprecedented period, engaging and agreeing phased payment plans for temporary rental concessions, changing quarterly payments to monthly or rent deferments. As at early June, 64% of the March quarter's rent had been paid with 36% on Agreed Payment Plans, including 8% from Adelie Foods, the tenant at Milton Keynes which went into administration on 28 May 2020."

So, what is the correct position?

On a positive note from the erroneous detail since withdrawn and the below
hxxps://www.foodmanufacture.co.uk/Article/2020/08/10/Adelie-Foods-assets-and-Urban-Eat-bought-by-Samworth-Brothers

It looks like Winterbotham Darby may have taken on the Adelie Foods lease.

Obviously a positive development.

[topvest] 24/10/2020 16:09

Transparency is not the name of the game here...Original said this:

"VIT Property Portfolio: Specialises in commercial properties with long, index- related income streams to deliver strong, long-term real returns.
VIT Property Portfolio Total Returns: Between 8% and 12% a year over the past 3, 5, 10, 20 and 33 years and are above the MSCI averages over all these periods.
VIT Property Portfolio Value: £75,700,000 (£70,200,000 as at 31 March 2020 plus 3 new purchases). The independent revaluation as at 30 September 2020 and the six months total return will be reported in the interim report to be released soon (the revaluation is incorporated into the September end NAV). Purchases: 3 freehold supermarkets completed in August for £5,500,000 excluding costs @ net initial purchase yield 6.1% let to the Co-op, WAULT* 13 years, all with index-related rent reviews.
All 29 Properties (31 tenancies): Let on full repairing and insuring leases (tenants are responsible for repair, maintenance and outgoings), with upwards only rent reviews and a weighted average unexpired lease term* of 15 years if the tenants’ break options are exercised.
Rent Reviews: 5 rent reviews completed since March 2020 (4 Index-related and 1 with a fixed increase).
Assignment: Completed at Milton Keynes to Winterbotham Darby with a reversionary lease to 2035 and a tenant’s option to break 2030.
Contracted Index-related income: 87%
Sub Sectors: Due to a strategic sales programme over the last 10 years the Property Fund is now no longer invested in high street shops or retail warehouses.
COVID-19: Despite the impact of the pandemic we continue to be in close contact with our tenants as they deal with the crisis. For the June quarter to 29th September 2020 – 100% of the contracted rent has now been received. Q4 rent collection has started well."

Revised version said this:

"VIT Property Portfolio: Specialises in commercial properties with long, index related income streams to deliver strong, long-term real returns.
VIT Property Portfolio Total Returns: Between 8% and 12% a year over the
past 3, 5, 10, 20 and 33 years and are above the MSCI averages over all these
periods.
VIT Property Portfolio Value: £75,700,000 as at 30 September 2020
(£70,200,000 as at 31 March 2020). Details of the independent revaluation
as at 30 September 2020 and the six months total return will be reported in
the interim report to be released in early November (the revaluation is
incorporated into the September end NAV).
All Properties: Let on full repairing and insuring leases
(tenants are responsible for repair, maintenance and outgoings), with upwards
only rent reviews and a weighted average unexpired lease term* of 15 years if
the tenants’ break options are exercised.
Contracted Index-related income: 87%
Sub Sectors: Due to a strategic sales programme over the last 10 years
VIT is now no longer invested in high street shops or retail
warehouses."

So they have deleted the Covid-19 section which was either too much detail or plain wrong.

They really cannot expect the discount to close with this sort of incompetence!

[topvest] 24/10/2020 14:10

Factsheet for September:

VIT Property Portfolio Value: £75,700,000 (£70,200,000 as at 31 March 2020 plus 3 new purchases). The independent revaluation as at 30 September 2020 and the six months total return will be reported in the interim report to be released soon (the revaluation is incorporated into the September end NAV). Purchases: 3 freehold supermarkets completed in August for £5,500,000 excluding costs @ net initial purchase yield 6.1% let to the Co-op, WAULT* 13 years, all with index-related rent reviews.

COVID-19: Despite the impact of the pandemic we continue to be in close contact with our tenants as they deal with the crisis. For the June quarter to 29th September 2020 – 100% of the contracted rent has now been received. Q4 rent collection has started well.

....This is very impressive indeed on the rent collection front. Far better than most! It also implies the 30 September 2020 valuation is included in the NAV reported.

EDIT...see below the COVID-19 has been deleted in the updated version. Valuation unchanged according to the above given there is a £5.5m acquisition. By reading both factsheets the position appears better than expected. If they can be believed. Surely an explanatory RNS is required on putting out contradictory information?

[shalder] 16/10/2020 16:58

That's exactly my problem with this. Imo there is a little bit of playing with language here as there is no way that a valuation of property AS AT 30 September would be available to the company ON 30 Sep unless the whole process is so superficial as to be completed within one working day. Hence I think there is info on the property valuation we don't have yet, and it is unlikely to be good.

[charlesdb] 16/10/2020 15:15

Nett asset values at Sept 30th on the London Stock Exchange website. As you say, the NAV statement is misleading. it's not clear whether a property revaluation is included. I suspect not. The whole situation lacks clarity and to me that is a warning signal. I reckon the property valuation would need a significant write down, which would show up in the NAV.

[topvest] 15/10/2020 20:42

It's unclear whether the September property valuation is factored into the NAV at the moment. I suspect not. Anyone actually know as the NAV announcements are rather misleading.

[charlesdb] 15/10/2020 16:25

Too many pubs. Absolutely. Imagine you were CEO of a pub chain, suffering under the cosh of Covid. Would you agree to inflation linked rent reviews? Not a chance in my opinion. Same applies to leisure. The property market will have to undergo changes but The Board of VIN either don't seem to understand, or are not being honest with shareholders. I believe the latter. Solid covenants don't mean that the tenants are naive. VIN are highly geared which is great if you can more than cover the borrowings with rent receipts and have money over to pay shareholders dividends. i think VIN may be in trouble on their property portfolio, but let's see. It's an interesting case study.

[spectoacc] 14/10/2020 08:53

Back to retest support for the 4th time.

Have a tiny residual holding in VIN, & keep eye on it to one day buy again in size, but agree with your points @topvest. However, far from convinced their property is going to be as good going forward.

Scanning back through the 2020 Report - page 22 here:
they have 11 pubs & 4 leisure, out of 26 assets.

In value terms, pubs roughly equals industrials, with Leisure another 50% of that. All the covenants are good, the tenants solid (eg Greene King, MAB, Shepherd Neame) but - just no.

The "Leisure" could more accurately be described as "Bowling" [Edit - see below] (but at least isn't cinemas), & the closest they get to retail is a bunch of Co-ops. But that's too many pubs in this market IMO.

[Edit - half the Leisure is actually bingo, other half is bowling.
And can argue a fair bit in price already on this discount.
But there'll surely be some hefty NAV downgrades to come on the property side, more so if there's some pub CVA's.].

[topvest] 16/9/2020 21:36

To be fair to OLIM their property record has been better than their equity record, carefully selecting index linked leases on a reasonably strong covenant. Let's see what happens, but yes all a bit bizarre. That's the main criticism I have with the current board. They have not been transparent at all as to why the 2 founders resigned. They don't seem to want to keep shareholders properly informed.

[spectoacc] 16/9/2020 21:16

Want to buy more property, hmm. Perhaps invest in some of the huge-discount REITs instead?

[chuckol] 12/9/2020 10:39

topvest/spectoacc, two prolific, pompous old farts who know nothing but are always making troll-predictions that don't come true since at least 2016. Thick-skinned though....


31,000 posts between them, can you believe it?