ZPG Share Discussion Threads

[tiltonboy] 27/10/2006 20:57

poacher,

Information to hand, so here goes:

Life of ZPG - 19.4 months
Current net assets - £10.9m
Cost of Zero's redemption - £10.66m

To achieve a 7p payout for the Growth shares, net assets would have to rise to £13.06m by wind-up.

Adding on £100K for the expected uplift in EXSZ, I am starting with a net asset position of £11m. In order to reach £13.06m, assets will have to grow by a compound rate of 10.5% for the rest of the fund's life.

After EXSZ, the next 9 holdings by size, account for 50% of the current portfolio. The average GRY on these holdings is in the order of 7%. The only stock in the top 25 holdings capable of any meaningful capital growth is REOA, which accounts for only 2.1% of the portfolio.

Excluding EXSZ, a further 28.5% of the portfolio reaches it's wind-up within the next 14 months.

Given that there has been little movement in the portfolio over a period of time, I think it can be safely assumed that this is likely to continue, other than for natural redemptions.

With available yields generally in the 6-7.5% range, reinvestments are not going to achieve the necessary returns to warrant a 7p Growth share price.

So, the big question is, how can the managers possibly achieve a return of 10.5%, when yields of only 7.5% are available.

I appreciate that the use of gearing can add some value, but do not expect this to contribute more than 0.5% to the overall asset value.

As I mentioned previously, I have a decent sized holding in the Units, and would love to be proven wrong, but just can't see how the Growth shares can reach more than 5p.

Perhaps you would give me your thoughts on how you think the managers can perform that well.

tiltonboy

[tiltonboy] 26/10/2006 16:38

poacher,

Posting from an internet cafe on my hols at the moment, but will come back to you on monday when i have got all the information in front of me, to reason why i think 5 and a bit will be as far as it goes.

tiltonboy

[poacher45] 26/10/2006 16:31

Well in my Isa and Peps I have just the ZPG's. I paid on average 3.238p so we will see what happens. I accept what you say about Exeter being the last big uplift. I just wish they had bought Danae and alot more Premier Dual. I do think that the 12% will act as a big incentive to get the pot bigger and I am still confident of 7p.

[tiltonboy] 26/10/2006 16:09

poacher,

The managers have consistently added value, as can be seen by the rise in the NAV of the Growth shares, overcoming a huge hurdle rate. However, with the exception of Exeter Growth, there is little upside in the current portfolio, over and above the natural accrual rate of their holdings.

If you take into account the terminal management fee, whereby the managers take 12% of the whole pot available to Growth holders, and you will see that they are going to have to do a monumental job, to get anywhere near your hopes.

I hope they can do it, as like Glynne, I have a significant holding in the Units.

tiltonboy

[glynnef] 25/10/2006 12:52

poacher,

Tilton and I had this conversation last month - posts 349 - 352. Management fees and interest are significant costs, but I hope your optimism is rewarded. I bought units because often the price of units lags behind the underlying shares - the ZPG in some of my units only cost me 2p. Hopefully they will be the icing on the cake on what is essentially a safe holding in my ISA for a modest return. As you say, all will become more certain in the next few months.

regards,
GF.

[poacher45] 25/10/2006 11:46

I will give you another way of looking at it. There are 14209498 zeros in issue. The full payment is 75p or £10657123 we have achieved that position a couple of months ago. If you add on to that 15% for the last two years of its life that is £1598568.4. That equates to 5.328p per a share and that is the minimum. I am not asking for that much more.

[poacher45] 25/10/2006 11:09

At the moment the asset value covers a payment of 7p. What you are saying is that in the remaining 22 months the growth in the portfolio of Zeros will not cover the interst payments on the ZPGZ shares. If Exeter pay out 160p that will be another £114,000 in the pot. I expect it to be more than that. We then have between 25% and 30% of the portfolio reaching maturity by the end of april 2007 this will increase the pot slightly. When you bear in mind that the management will get their bonus based on the final pot for the ZPG shares.I expect them to find some way of improving this value perhaps by buybacks of the units or other methods.

[tiltonboy] 25/10/2006 10:13

poacher,

No chance, with the current portfolio.

tiltonboy

[glynnef] 25/10/2006 10:07

poacher,

how is your 7p calculated ?

GF.

[poacher45] 25/10/2006 08:33

We do have brave investers on this site. One only holds shares in the form of units and the other has sold out cheaply.We only have one slight concern which is Exeter which will mature at the end of November and is currently looking better every day. After that over 90% of the zeros that we are invested in are very safe and I would predict at least a 7p pay out in 2008 even allowing for management fees.

[soysoy] 24/10/2006 21:48

ok but i sold out in May
I think the market it`s bit toppy
VERY LITTTLE IN SHARES NOW

[glynnef] 23/10/2006 17:00

soysoy,

the links in the header do not work any more. Need to point to premierfunds.co.uk

ZPG NAV is being supported partly by the rise in EXSZ. 4% in the last month, and it is at least 10% of the portfolio. If ESSZ holds its NAV between now and the end of November, there should be another boost to ZPG NAV as the EXSZ discount to its NAV, about 5%, narrows and is eliminated on its repayment. Only about 0.25p per ZPG share I calculate, but it all helps. Predicting terminal NAV of ZPG, and hence ZPGU, will be easier after November.

I hold ZPGZ and ZPGU.

regards,
GF.

[soysoy] 22/10/2006 18:45

THE ZERO PREFERENCE GROWTH TRUST PLC

The Company announces that the bid price Net Asset Values, including current
period revenue, at 17 October 2006 were:

per Ordinary unit 68.22p

per Growth share 7.69p

per Zero Dividend Preference share 60.53p

Gross assets less current liabilities £16.17m

[tiltonboy] 02/10/2006 22:13

haveagoodday,

Even a rising market will not have too much of an effect on zpg, as most of it's holdings are well covered zero's.

I maintain my 5p terminal NAV forecast.

tiltonboy

[haveagoodday] 02/10/2006 21:18

I only have a few left. I can see a sideways market eating away the value. ZPG needs a rising market to prosper.

[haveagoodday] 02/10/2006 21:16

Net Asset Value(s)

THE ZERO PREFERENCE GROWTH TRUST PLC

The Company announces that the bid price Net Asset Values, including current
period revenue, at 30 September 2006 were:

per Ordinary unit 67.69p

per Growth share 7.49p

per Zero Dividend Preference share 60.20p

Gross assets less current liabilities £16.06m
Fair value of the debt is not materially different from the par value.

[tiltonboy] 21/9/2006 11:44

Glynne,

Ignoring costs is a dangerous game, and well over 7 may actually net down to 6, when you take into account liquidation costs(unless they get another roll-over).

I only hold Units, so I can put them in PEP's and ISA's, and I expect to get a better return than cash.

tiltonboy

[glynnef] 21/9/2006 11:38

Tilton,
Agreed, and I am ignoring fees. But the latest factsheet talks of yields well over 7%, so if that is applied to £10.75m only it looks OK. I guess they are a bit vulnerable to interest rate rises though.
Price of ZPG just ticked up today! I only hold ZPGZ and ZPGU.

GF.

[tiltonboy] 21/9/2006 11:12

Glynne,

Don't forget the £5.27m of debt. This means that they will need to add £1.2m to a £10.75m portfolio, ignoring the return they make between cost of debt and it's investment.

Should still be achievable, but not as clear cut as you think.

tiltonboy

[glynnef] 21/9/2006 11:06

THE ZERO PREFERENCE GROWTH TRUST PLC

The Company announces that the bid price Net Asset Values, including current
period revenue, at 19 September 2006 were:

per Ordinary unit 67.45p

per Growth share 7.46p

per Zero Dividend Preference share 59.99p

Gross assets less current liabilities £16.02m

As I see it, the company now has sufficient assets to repay the ZDP holders in full, with about £100K to spare. They need to add about £1.2M to the £16M portfolio over the next 22 months to cover the current share price of ZPG. Should be easily achieved. Will be clearer after repayment of the Exeter Securities zero (30Nov06) and Investors Capital zero (28Feb07) are repaid, as they are about 19% of the portfolio.

regards,
GF.

[soysoy] 25/7/2006 22:06

THE ZERO PREFERENCE GROWTH TRUST PLC

The Company announces that the bid price Net Asset Values at 11 July 2006 were:

per Ordinary unit 66.38p

per Growth share 7.74p

per Zero Dividend Preference share 58.64p

Gross assets less current liabilities £15.96m

[soysoy] 16/6/2006 19:17

PREFERENCE GROWTH TRUST PLC

The Company announces that the bid price Net Asset Values at 13 June 2006 were:

per Ordinary unit 65.90p

per Growth share 7.79p

per Zero Dividend Preference share 58.11p

Gross assets less current liabilities £15.40m


Fair value of the debt is not materially different from the par value.



END

[tiraider] 03/6/2006 11:14

THE ZERO PREFERENCE GROWTH TRUST PLC

The Company announces that the bid price Net Asset Values at 31 May 2006 were:

per Ordinary unit 65.94p

per Growth share 8.07p

per Zero Dividend Preference share 57.87p

Gross assets less current liabilities £15.45m

Fair value of the debt is not materially different from the par value.

On 30 May 2006, the Company decreased the total amount drawn down under the
Bank of Scotland facility by £400,000 to £4,820,000. The Company is currently
eligible to draw down a maximum of £6,000,000 under the loan facility.

[tiraider] 01/6/2006 11:10

THE ZERO PREFERENCE GROWTH TRUST PLC

The Company announces that the bid price Net Asset Values at 23 May 2006 were:
per Ordinary unit 66.00p

per Growth share 8.28p

per Zero Dividend Preference share 57.72p

Gross assets less current liabilities £15.89m
Fair value of the debt is not materially different from the par value.

On 22 May 2006, the Company decreased the total amount drawn down under the
Bank of Scotland facility by £700,000 to £5,220,000. The Company is currently
eligible to draw down a maximum of £6,000,000 under the loan facility.