Wichford Share Discussion Threads

[harmonics] 07/10/2009 05:53

How long will it take to clear the rump do you think?

[patviera] 06/10/2009 22:32

harmonics...i dont see these at 20p as the level of debt is too high but once the overhang from the rump is cleared I can see these at 15 or 16p...would help to see some nice rises in CLI (CLS HOLDINGS AS WE DID TODAY)

[patviera] 04/10/2009 16:31

high leverage may be fine if commercial props starts rebounding?!!i like these here at 10.5p..i see 40 pct upside to 15p x

[quazie12] 03/10/2009 15:05

patviera

£52m just in from a lot of disgruntled shareholders.

Prior to that falling valuations combined with very high leverage =

[patviera] 02/10/2009 21:23

IS THE MKT CAP 110M WITH CASH OF 70 MILL? WHY ARE THESE SO LOW?

[lord gnome] 01/10/2009 08:22

I'd say Tempus was spot-on with that assessment. 2010 will be the year for commercial property in my view, and I still reckon WICH will at least double on a 12 month view.

[ukinvestor220] 01/10/2009 08:15

Times Tempus today - Wichford

Wichford was supposed to sit at the low-risk end of the commercial property sector. This small-cap investment company buys only buildings let to central government under long-term leases, such as Jobcentres, courts and the Passport Office, which means that its rental income is highly predictable and the risk of void properties is low.

But whereas that much has held true, government-occupied offices have been no less immune to falling property values than private-sector ones. Worse, Wichford carried on buying properties when it should have been selling, such that at the start of the year it was carrying £530 million of net debt. By this summer its shares had fallen 92 per cent from their 2007 peak.

But last month's £52 million rights issue has begun to pull the company up again. That fundraising enabled Wichford to extend the maturity of its two biggest debt facilities to late 2012 and gives it scope to buy new long-lease properties at low valuations, so extending the average unexpired lease term of its portfolio. Further, yesterday's trading update shows that its rental income remains robust: 99 per cent of its properties are occupied, and six rent reviews have been pushed through at an average increase of 8.4 per cent.

The longer-term hope is that rising property prices and easing credit markets make further rights issues unnecessary. At 11p, where it yields 5.5 per cent, this is a high-risk "buy".

[utsushi] 30/9/2009 14:24

Q, yes, agree, looks promising on the dividend front-now, we need to just give it time.

[ted1806] 30/9/2009 09:21

All sounds very neat and tidy to me.

[quazie12] 30/9/2009 08:57

Santori

Here is the answer to the dividend question from this morning's announcement

Rent Reviews & Occupancy


Six indexed-linked rent reviews have been initiated and agreed since the last
IMS generating average uplifts of 8.4% and resulting in increased rental income from these properties of approximately GBP130,000 per annum. Occupancy remains stable at over 99%. The Groups secure rent roll, with indexation on over 60% of these rents, continues to support stable income returns and the Companys commitment to future dividend payments from Trading Operations earnings.

[quazie12] 29/9/2009 19:12

yes fingers crossed. I took up full rights and am pleased at the share price reaction so far. In addition we shouldnt have any tenant worries.

I dont know much about this BoD but I sincerely hope they have been looking hard at all overheads etc especially property management contracts to ensure they will come out of this as well as others in the sector who have used the downturn to their advantage.

q

[utsushi] 29/9/2009 16:12

Hi Quazie, yes your concerns over WAULT are valid, but when did one ever buy a share without concerns?

I think if the post right's enviroment had worsened I would worry about refinancing wiggle room, but as things stand at present I am more relaxed, and see a higher probability, that's all, of positive surprises, but maybe not 20p!

Prelim's in December I think.

[quazie12] 29/9/2009 15:19

Santori

The difficulty for Wichford going forward I think is not so much for valuations but to get the key ratio, WAULT (weighted average unexpired lease term) on track to enable them to get their refinancing at the right terms. That is why they needed the rights issue to give them some room to strengthen the balance sheet and buy at depressed prices. The government's property people have come out recently and said that they were not prepared to enter into any lease extensions or renegotiations in the near future on leases unless they were within 24 months of ending. That gives Wichford less wiggle room here unless they buy property on very long leases.

I do agree that the NAV for shareholders will rise steeply as things improve due to the high leverage of this particular company and perhaps lenders will be more relaxed as the LTV's start to fall to acceptable levels. That said it will not help with the refinancing issue.

The key things in Wichford's favour which attracted me at the outset were the sector(govt buildings) hence the quality of tenant, and the recent European diversification plus the loans were non recourse ie ring fenced. That said,the flip side being the lower yield on these properties means that the board must ensure they get their refinancing spot on.

Wichford is not a straighforward play and I do not agree with our friend that it will go to 20p on sentiment just because the herd pile in. I would be delighted if it did however and for one would not be complaining. I leave that to when I am slagged for merely expressing a view from a newbie !

q

[utsushi] 29/9/2009 14:51

quazie12, I would rather keep things on the topic of WICH, but take your point-thanks for the info on the dividend.

With gross asset values now stabilizing across the sector, I think a further RI is very unlikely-will wait for the next set of results and review.

[quazie12] 29/9/2009 11:58

Santori

Why are you supporting idiot harmonics ? DOes my definition of mug punter offend you or do you enjoy pointing out that you are the smart one for getting in at 8/9p ?

Actually as a holder rather than a shorter, I got in at 7p as well.

A mug punter is someone who goes around buying into shares without doing research then slags off posters who have views contrary to their own ill informed view (ie your buddy).

I suppose you at least disagree with him that I am not a shorter.

All I said was I dont think the company raised enough cash this time round(they got what they could at the time) and that there may be another RI down the line.

That view got me a slagging from an idiot who you decide to back up.

In answer to your question re dividend, I think the board would like to resume business as usual on that front as they have some divi thirsty big holders and were always a strong divi payer in the past. They did say that the possibility of resumption of divis would be addressed once the RI was completed so we may see an announcement soon. However there is the pressure on ensuring that they increase the WAULT to obtain better refinancing terms and it is a question as to whether they have sufficient cash to do so.

The interims did say back in June the following on the topic:

"The Board confirms that it currently intends to declare an interim dividend but will not decide the level of such dividend until the outcome of the current equity issue deliberations are known"

q

[utsushi] 29/9/2009 10:10

I am happy to hold-does anyone have a view on a potential dividend for this one?

TIA

[harmonics] 29/9/2009 06:02

The potential is here as it is with all property based stocks.
At 11~12p this stock could form a good investment.
With a property NAV upgrade and a bull run this could easily make 20p this year.
All imo.
I sold at 13p and am now looking for a good buying in point.
Missed IERE yesterday, could have bought for 26.25 but my damn day job got in the way!

[masurenguy] 25/9/2009 13:54

Hardly - there was a one off transaction for 59.47m shares just above the offer at 12p. I would imagine that it was connected with the final part of the new share subscription including the placing of the residual shares not taken up in the RI.

There have been circa 5.4m shares traded on a normal basis so far today.

[hybrasil] 25/9/2009 12:49

64m shares traded today -whats up

[nickcduk] 24/9/2009 14:12

Taken my shillings off the table now. Still don't think it is attractive versus others in sector but you takes your choice.

[harmonics] 24/9/2009 12:46

Quazie12 = shorter

[panamabob3] 24/9/2009 12:35

4300000 trade just reported @10p.Thats the rump gone i suppose.Can we now have a proper market for WICH.WE hope all is now a level playingfield.