Wt Wner Usd Discussion Threads

[nickcduk] 04/1/2009 14:27

WNER faces huge pressure on its LTV covenants. IPD suggests properties returned around -9% in October and November. December will probably be a further 3-4%. Valuations likely to continue to fall next year as tenant defaults start to flood in. On the revenue side they should be ok to meet income covenants but that isn't the pressing concern.

Some of their JV's are likely to be in negative equity. Those are held in JV with HBOS and BARC. You can understand why the banks may not press for foreclosure straight away but they will have to get the begging bowl out.

[kiwihope] 03/1/2009 14:15

Why must it be bust? The company has two main worries - firstly that the value of its properties will fall further and they will breach their LTV covenants. Secondly that the recession will bankrupt some of its tenants and they will lose income and then maybe breach the interest covenant. But the low shareprice doesn't mean it is bust.

From their interims, net debt is £349M and property value (including funds) is £480M. That makes LTV of 73% which is close to their average 79% limit. If property values fall by 8% then they will breach the covenant. I don't know how the 'average' of 79% works as they seem to have different limits for different loans. Presumably some are in more danger than others (I haven't looked at this closely). Either way things are looking tight especially with values predicted to fall during 2009.

One crumb of comfort seems to be their interest covenant headroom which they say has increased due to falls in LIBOR. With further cuts in interest rates expected, this may not be a major problem, provided of course that enough of their tenants stay in business!

Their main problem is the LTV covenant.

[hybrasil] 22/12/2008 10:33

a £19,000.00 investment- Come on Philip. You made the balls of it . You have a lot of money. What are you paid by the co. £19k. Doesnt impress me.

[hybrasil] 19/12/2008 14:56

it must be bust - very sore - as you can see from my recent purchases

[timanglin] 18/12/2008 15:58

thanks nickcduk - had a quick look - iret mayhave to cut dividend and re-negotiate covenants if ltv over 50%, however your right. dyor.

[nickcduk] 18/12/2008 13:54

IRET was one of the stocks. On an LTV of around 43% I think. Yielding 16% with the dividend being covered from earnings. Its banking covenants have a limit of 50% but they should be able to make a few disposals if need be to remedy that.

[timanglin] 18/12/2008 13:41

If you dont mind me asking Nickcduk - where did you go?

[nickcduk] 18/12/2008 13:04

Fwiw I sold out for a thumping loss when it spiked higher a few weeks ago. It was a relative thing really. I found much better value elsewhere on much lower gearing and asked myself why I was still holding WNER. It is effectively bust. It will break its LTV covenants and will be at the mercy of banks. A debt for equity swap could be on the cards and existing shareholders are not likely to end up with much. I think its REIT status will also disappear. No way it can pay a dividend when it is in such dire financial straits. Panther picked up stock a while back and they may end up picking up the pieces in the end game. Sorry state of affairs.

[timanglin] 18/12/2008 12:21

what would happen if wner lost its reit status?, do you think this would make it easier for the company, because at the moment that are committed to paying (90%)rent out as dividend as opposed to improving the balance sheet.dyor, imho.

[bearstalker] 17/12/2008 23:36

I checked price by phone on Monday and wanted to buy at 33p but was in meetings all day and so didn't get chance. I was lucky

I bought my first small holding yesterday at 29.9p but am aware that this is a bit like catching a falling knife, (price now 26p)but from here downwards I think there's good money to be made and I'll continue to top up if price falls. The more it falls the better - I can't see Wner going bust and even after latest revaluation has slashed asset value assets still sits at something like 350p per share! DYOR, no advice intended.

[pugugly] 17/12/2008 13:33

Bearstalker Now 26p offered.

Did you buy?

[bearstalker] 08/12/2008 23:01

A new low I see - thought I had missed the boat on these. Wait and see. Might try a few if we get to 40p

[richaims] 27/11/2008 17:07

Grim interims :

Date: Thursday 27 Nov 2008

LONDON (ShareCast):


"Property investment and management company Warner Estate Holdings saw losses widen after substantial downward valuations of its investments and properties.

Warner suffered a pre-tax loss of £124.7m in the six months to 30 September, compared with a pre-tax loss of £7.7m the year before.

Recurring profit before tax, which excludes reduced property values, was £5.7m compared to £5.1m for the equivalent period last year.

Net asset value per share slumped to 316p from 549p at the end of March 2008."

[hybrasil] 27/11/2008 08:16

oh dear philip you have made a total bollix of what was a fine company. Methinks you should go.

[hybrasil] 25/11/2008 11:28

so will the results yield a dividend. I suspect so!!!!

[nickcduk] 17/10/2008 06:49

Had a chat with the company yesterday. Don't seem to be hugely flustered about refinancing. I guess today's announcement shows that they still have support of the banks. I think interest rates falling sharply will allow banks to re-price risk again and boost their margins sharply. That should encourage them to continue lending to the sector. Company is currently in closed period so directors cannot buy shares. Results due towards the end of next month.

[hybrasil] 17/10/2008 06:40

Along comes Andrew.
Kenny. I find it hard to believe no board member buying at prices 5% of its high. Mr Perloff obviously thinks they are good value.

[kenny] 16/10/2008 07:58

With no re-financing required in the short term it is hard to see how they can be "a goner". The family have ridden out other property crashes so lets hope they can ride out this one.

[hybrasil] 16/10/2008 07:57

unfortunately

[bearstalker] 16/10/2008 07:49

Watching, waiting....a crying shame if it is a goner.

hybrasil, are you still in?

[hybrasil] 16/10/2008 07:25

The share price is now 5% of what is was at the peak. £9 to 45p.Yet the warners have made no attempt to take advantage of that fact. It is probably a goner

[nickcduk] 12/10/2008 16:51

I spoke to management a couple of months ago. I don't think they have any pressing loan facilities due for renewal until 2010. Would hope that by then rates will be a lot lower and that in itself should help stabilise valuations. WNER also have floating debt linked to LIBOR which isn't particularly useful whilst its elevated as it is. Should eventually even itself out with lower rates though. Be interested to hear about your conversation with management if you ever get to speak to them Hybrasil.