ZPG Share Discussion Threads

[tiltonboy] 21/2/2005 09:06

david,

Correct. I actually started a response to 41 last night, but after looking at the graph didn't actually know what it was showing, so I didn't press "submit".

I've added a few more Units this morning.

tiltonboy

[david77] 21/2/2005 08:39

ZPGU should be 75p ahead of ZPG in 3 1/2 yrs time.

[tiraider] 20/2/2005 19:09

ZPG has some catching up to do. That gap is too divergent.

[tiraider] 20/2/2005 19:01

t/boy,
Not holding any other Zs, I bought and sold JDT at 16 and 18 I think, plus a few decent sized divis in that time though. So I still lurk once in a while on the thread (for interest value only now though!)

soysoy; that's a informative read, (a bit of a bonus winning those awards!)thanks for that.

rgds
tr

[tiltonboy] 20/2/2005 18:12

tiraider,

I hold JDT by default, through my holding in ELIZ. That's been a wonderful investment for me, and more than makes up for my decision to sell ZPG too early.

Do you prowl on the JDT board or have any interest in other splits?

tiltonboy

[soysoy] 20/2/2005 17:32

this link to zpg assets

[tiraider] 20/2/2005 17:08

t/boy

agreed re ta on stocks that are not traded so often - it's not nearly so good, still it gives some indication as to future direction.

Smart buy of ZPGU at 17p - lovely looking chart


look forward to your projection

rgds
tr
ps I hope you're still holding JDT - it's rise hasn't escaped my attn!

[tiltonboy] 20/2/2005 16:36

tiraider,

The bottom of the zero's market was a lot further back than you think, and by the time I started buying in October 2002, the market had already turned. I initially bought zpgu at around 17p has a geared, hedged play.

I think it is difficult to use charts sensibly on a stock such as ZPG because of their peculiarities, but I agree that there is upside momentum, with some interesting buyers.

You are right with the "springboard effect" thus far, but if you look at the GRY's going forward, and especially the GRY's available on longer dated issues which they will need to roll into, the picture becomes less clear.

I also hold ZDR and it is possible to work out the terminal NAV taking current cover and GRY's into account. If I get chance tomorrow I will run off the current portfolio, and fast forward it a couple of years and see where we will be then. The great unknown of course is what they re-invest into when the shorter dated issues wind-up.

tiltonboy

[soysoy] 20/2/2005 15:32

useful linkinks

[tiraider] 20/2/2005 13:02

soysoy
thx for the extra header charts.
rgds
tr

[pomp circumstance] 20/2/2005 11:33

Is a leveraged play on funds that invest in the stock market then?

i like to buy on breakout charts, but like to at least understand something about the business!!

[tiraider] 20/2/2005 10:44

tiltonboy;

Thanks for your reply. You have valid concerns (not dissimilar to my own I might add).

Last year (I think most people will agree) saw the bottom of the zeros market. ZPG was reconstructed at just the right time and took advantage of the irrational low valuations. This has given it a springboard effect - hopefully powerful enough to overcome the hurdles ahead (that you have rightly pointed out).

Ref your purchase of the Units, it's quite odd, because I nearly suggested in my previous post that less risk averse investors should consider the units or even the ZDPs for a better balance. There's no doubt that the ZPGs are high risk.

As NAVs rise and the picture becomes clearer, the risk level will decrease and so the ZPG price will rise to reflect the decreased risk. There's 3.5 years to go yet so time is on its side.

My own investment stategy is to buy / sell based on charts. ZPG is currently in this strong upward price channel. It has broken through 3.5 resistance during the week (that level now becomes support). There's further resistance at 4.5 and 5.0. After that we have to look further ahead to the 10 - 11p range. Currently it doesn't look like any resistance level will stop it, (but things can quickly change as we all know).
The chart is taking on the form of a rounded bottom - a particularly bullish pattern.

[soysoy] 20/2/2005 10:19

tiltonboy +tiraider,
thanks for clearing a few things up
there is more buys then sell for long time now
so the market will decied which why this will go

[tiltonboy] 20/2/2005 09:42

tiraider,

An excellent post, but when you look at the underlying holdings you will see that it will be difficult, not impossible, to achieve real value for the Growth shares.

As you will appreciate, there is a limit to which their underlying holdings can reach in price. In addition with the majority of their holdings winding-up in the next two years they will have to re-invest the money at an attractive rate, to keep the growth going. A number of it's holdings also trade at above NAV, which will slow the performance going forward.

When the trust was "rolled over" last year, the ZDP shares had a hurdle rate of 12.5% to be able to repay them in 2008; that was a big ask, but aided by buoyant markets, and the gearing both of it's own debt, but also that inherent in the structure of it's shareholdings, the performance has been superb.


So, the big questions going forward are 1) can markets continue their good run, 2) Can re-investments be made at sufficiently attractive returns when wind-ups occur.

I did indeed suggest that the growth shares were too high at around 1.5p, and sold my own, as I wasn't bullish on the markets, so hands up I got it wrong.

I have recently bought the Units(1 Zero + 1 Growth Share) in zpg, as I believe the Zero's now offer outstanding value, and should the performance indeed be good, I will have paid the equivalent of 3p for the Growth Share.

I am not trying to put people off this stock, but having seen soysoy and opthalmist around on a number of boards over the years, thought it only fair that they understand what they were buying.

tiltonboy

[soysoy] 20/2/2005 07:30

nat asset value has gone up 800% since august so we are well on are way.
we all aware of the risk and that is allready reflecfted in the price

[opthalmist] 19/2/2005 23:23

Nice post tiraider.

[tiraider] 19/2/2005 22:16

tiltonboy,

I vaguely remember you saying that these should be avoided when they were 1.5p.

The NAV of the growth shares is showing as over 7p, but in reality it is NIL.

I take issue with that statement as a number of issues have been omitted;

- ZPG Trust is targetting 75p in August 2008.

- It's starting NAV (per ZDP) was 46.98p, and the aim is to achieve 28p of growth in 4 years. So that's 7p per year. (Clearly though an above average performance in the early years gives a far better chance of an overall outperformance)

- the Growth shares started in Aug 2004 as having no value. After only 6 months on 16/2, their value was already 7.22p

- so the first years growth has already been achieved in half the time

- PLUS on 16/2, the NAV per Zero Dividend Preference share was 49.70p - so 2.72p has already been added to the NAV of the ZDPs (thus subtracted from ZPG shares)

- PLUS £1.3m of the original loan (£6.0m) has been repaid

- PLUS due to the restructing the number of ZPGs was reduced by 36% (from 47m to 30m) - therefore each one benefits by approx 50% more by an increase in the NAV

So right up to to closing date in 2008, in theory, ZPG shares are worth nothing. In the meantime investors will take a view, and estimate by the main indicators, (the NAV, the ZDP value and outstanding bank loan) the sort of excess (return) they will receive.

This is a risky investment, everyone knows that, that what the FSA was investigating for years, the split caps.

On the other hand, starting from the restructing in Aug 2004, these Growth shares stand a much higher chance of producing a considerably hgher reward than the original ones when first launched.

For the current offer price of 4.25p, the indications are that it's a risk well worth taking.

[tiltonboy] 19/2/2005 21:06

For starters you can read the JDT thread which will illuminate you in the world of split capital investment trusts, and then you can have a look through the factsheets on splitsonline.co.uk to have a look at what this company is made up of.

In a nutshell, they invest in zero dividend preference shares of other split capital investment trusts. Unless the assets of the company, after repaying debt, rise sufficiently to repay the Zero's of ZPG, then the growth shares will receive nothing.

The NAV of the growth shares is showing as over 7p, but in reality it is NIL. If the assets of the company grow at 5% per annum until the wind up in 3.5 years time, the NAV of the growth shares will still be NIL.

I'm not saying that they will not get there, but it will be hard work.

tiltonboy

[soysoy] 19/2/2005 16:47

tiltonboy are you going to tell us then?

[tiltonboy] 19/2/2005 16:23

Do you guys fully understand how these work? Do you understand the effects of prior charges?

[opthalmist] 19/2/2005 12:23

May pick up some more next week soysoy, maybe taking my holding to 0.08%?

[soysoy] 19/2/2005 12:05

The Zero Preference Growth Trust PLC
The Company has today been notified that following a purchase of 500,000 Growth
shares on 11 February 2005, John David White and Jennifer Ann White now hold a
total of 1,685,000 Growth shares of the Company, representing 5.61% of the
issued class of capital.
The breakdown of the total holding is as follows:
BDS Nominees Limited a/c GPEP 1,045,000 3.48%

Executors of Mrs H R White Deceased 100,000 0.33%

Mr John David White & Mrs Jennifer Ann 40,000 0.13%
White

Sutterton Label Printers 500,000 1.67%
18 February 2005
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Also SoySoy holds 49,800 shares 0.15%??.....LOL



Opthalmist - 16,000 shares 0.04%

[opthalmist] 17/2/2005 23:37

No wonder it moves so fast - only 1.2M market cap.

[tiraider] 17/2/2005 20:22

This is the result of the restructuring in August 2004.

The total number of ZPG shares is 30m, thus mkt cap is now c £1.2m. ADVFN has not updated its figures and gives 47m shares and mkt cap as £1.77m