Category: Uncategorized (Page 154 of 364)

• Schroder European Real Estate has reported a NAV total return of 0.4% for the year ending 30/09/2024, having paid dividends per share of 5.92 euro cents. The dividend was 103% covered by EPRA earnings, which were up 3% on the previous year thanks to rental growth outpacing interest costs.
• Dividends offset a decline in the portfolio value of 3.6%, due primarily to outward yield movement in the first half of the year. The manager notes that recent evidence suggests a stabilisation of values, and has observed an increase in investment volumes for smaller lot sizes in desirable cities.
• During the year, the company strengthened its balance sheet, completing all near-term refinancings which means the average interest cost is just 3.2%. No debt is due to expire until June 2025.
• The loan-to-value is a modest 25% net of cash, and the manager has c. €25 million of cash available for investment or other uses. Management is working on the disposal of Seville, which if successful, will reduce gearing to 22% net of cash.
• Over the period, SERE’s discount has narrowed but still stands at an attractive c. 33%. This compares to a c. 21% average for the AIC Property – Europe sector and 22% for the AIC Property – UK Commercial sector.
• The manager is focusing on capitalising on portfolio reversion to enhance earnings. There are key lease regearings pending which management believe will strengthen the income profile and drive a re-rating.
• The board notes that the French tax authorities are proceeding with a tax audit. Although they note the potential exposure is up to €12.6m (excluding penalties), they do not believe an outflow is probable, based on professional advice, so have not recognised a provision in the NAV.
• Sir Julian Berney Bt., chair, said: “Looking ahead, we expect to continue reaping benefits from a high-quality portfolio with strong occupancy rates located in key European cities. As inflation eases and interest rates fall, we expect sentiment to continue to improve and larger economies and cities are poised for enhanced growth.”

Kepler View

Schroder European Real Estate’s (SERE) main attraction is the high yield which is magnified by the current wide discount. The fully-covered dividend would equate to a c. 7.2% yield on the share price at the time of writing. This is backed by a portfolio which is 96% occupied, and after 100% of rent due was collected for the year. Management completed 16 new leases or re-gears over the 12 months under review with a weighted average life of 8 years.

The income outlook is also supported by the attractive gearing position. SERE has a modest level of gearing which locks in a low average rate of 3.2% over a weighted average life of 2.8 years. The rearranged facilities marginally increased the average cost of debt (to 3.2%) but positively extended the weighted life by 13 months. Also of note is the indexation of the portfolio income: around 80% of the company’s income is indexed to inflation, with the remainder linked to a hurdle rate, typically of 10%. A key issue for investors to watch will be what happens as the two largest tenants reach the end of their leases. The lease of KPN, which pays 18% of the portfolio income, is up in 2.3 years, and that of Hornbach, which pays 11%, is up in 1.3 years. We think any positive news on new terms could be significant when it comes to investor perception of risk and the appropriate share price discount. Additionally, we think that there is scope for the discount to narrow if there is a positive outcome from the tax audit.

A small decline in the value of the property portfolio over the period was expected and modest, but hopefully reflects the end of a tough period for real estate amid high inflation and interest rates. Almost all the write-down was taken in the first half ending in March, which therefore pre-dates the ECB’s rate cuts which began in June and have taken the key lending rate from 4.5% to 3.4%. It is encouraging to hear from the manager his observations that a pick up in activity seems underway, and further rate cuts are widely expected which should improve the backdrop even more.

There are concerns around the outlook for European economies, but SERE should benefit from a relatively defensive positioning in high quality locations and properties. Approximately 33% of the portfolio by value is offices, which are in supply-constrained locations and leased off affordable rents. The industrial exposure of 30% is a mixture of distribution warehouses and light industrial accommodation in growth cities within France and The Netherlands. The retail exposure is limited to 17% and comprises DIY and grocery investments rather than fashion and other discretionary sectors. SERE also has 9% of the portfolio allocated to the alternatives sector, comprising a mixed-use data centre and a car showroom. Substantial cash on the balance sheet provides firepower for asset management initiatives, buybacks or other measures.

11/12/24

I’ve bought for the Snowball 14910 shares in Schroders European Real Estate

SERE at a cost of 10k.

Current yield 7.5%

Discount to NAV 35%

Adjusted EPS increased to 3.0 pence following earnings enhancing acquisitions in the period

On track to deliver full-year 2025 dividend target of 6.12 pence per share

Thursday 13 March

Apax Global Alpha Ltd ex-dividend date
JPMorgan Emerging Markets Investment Trust PLC ex-dividend date
Real Estate Credit Investments Ltd ex-dividend date
Safestore Holdings PLC ex-dividend date
Schroder Real Estate Investment Trust Ltd ex-dividend date
Tritax Big Box REIT PLC ex-dividend date
Warehouse REIT PLC ex-dividend date

A reminder the Snowball owns mainly Investment Trusts where the aim is to provide a ‘secure’ dividend, although no dividend is ever completely secure.

If the Trust is trading at a discount to NAV there may be an opportunity to take some of Mr. Markets money and re-invest it in a higher yielder to grow your Snowball but this is only a secondary consideration

For any new readers, the rules for the Snowball.

There are only 3

One.

Buy Investment Trusts that pay a ‘secure’ dividend and use those dividends to buy more Trusts that pay a ‘secure’ dividend.

Two

Any Trust that drastically changes it’s dividend policy, must be sold, even at a loss.

Three

Remember the Rules.

Assura PLC on Monday said it would be ‘minded to accept’ a possible £1.61 billion cash bid from a US private equity consortium.

The Altrincham, England-based care property investor and developer said the offer from Kohlberg Kravis Roberts & Co Partners LLP and Stonepeak Partners (UK) LLP would value each share at 49.4 pence each.

In response, shares in Assura were up 14% at 46.48p each in London on Monday morning.

KKR and Stonepeak Partners are both New York-headquartered investment companies. Stonepeak specialises in infrastructure investment.

The price is a 32% premium to Assura’s undisturbed share price of 37.4p on February 13, the day prior to Assura announcing it received an unsolicited approach from KKR and USS Investment Management.

KKR noted that tilt valued Assura at £1.56 billion, or 48p per share, and also said in February that it was considering if there is any ‘merit’ in engaging with Assura’s board.

Under the latest proposal, Assura shareholders would retain the quarterly dividend of 0.84p per share due to be paid to shareholders in April and receive cash of 48.56p per share at closing.

On the latest proposal, Assura said: ‘The consortium of KKR and Stonepeak, both long-term infrastructure investors, recognises that Assura’s leading platform and portfolio are important social infrastructure assets for the UK, and has indicated its intention to deploy further capital to the portfolio to continue its growth.’

After speaking with its advisers and major shareholders, Assura said it has indicated to the consortium that it would be minded to recommend a bid should a firm offer be made.

As a result, Assura has decided to engage in discussions with the consortium and allow it to complete a limited period of confirmatory due diligence.

Assura also noted it received an all-share takeover approach from fellow London listing Primary Health Properties PLC worth 43p per share.

Assura said the private equity cash bid proposal is more attractive, and with ‘materially less risk’.

‘Therefore, the board has rejected the PHP proposal,’ it said.

PHP has until April 7 to make a firm bid for Assura.

Shares in PHP were up 1.7% at 92.05p each in London on Monday morning.

I’ve bought for the portfolio 2020 shares in SDCL Energy Efficient for 1k.

xd this week for 1.58p

---

Stick to your task ’til it sticks to you;
Beginners are many, but enders are few.
Honour, power, place and praise
Will come, in time, to the one who stays.

Stick to your task ’til it sticks to you;
Bend at it, sweat at it, smile at it, too.
For out of the bend and the sweat and the smile
Will come life’s victories, after awhile.

Author Unknown

Stick to your plan and luck will come after a while, better to be lucky than clever.

I’ve sold the portfolio shares in Assura, bought back last week for a profit of £1,176.00

Total profit for AGR £3,007.00 including earned dividend but not yet received.

Assura plc

Possible Cash Offer

The Board of Assura plc (“Assura” or the “Company”) announces that it has received an indicative, non-binding proposal from Kohlberg Kravis Roberts & Co. Partners L.L.P. (“KKR”) and Stonepeak Partners (UK) LLP (“Stonepeak”) (together, the “Consortium”) regarding a possible cash offer for the entire issued and to be issued share capital of Assura at 49.4 pence per share (the “Possible Cash Offer”).

Pursuant to the Possible Cash Offer, Assura shareholders would retain the declared quarterly dividend of 0.84 pence per share which is due to be paid to Assura shareholders on 9 April 2025 and receive cash consideration of 48.56 pence per share at closing. As such, the Possible Cash Offer represents a 2.9% increase on KKR’s previous indicative, non-binding proposal of 48 pence per share, which was also inclusive of Assura’s last quarterly dividend.

The Possible Cash Offer represents 100% of Assura’s EPRA Net Tangible Asset Value of 49.4 pence as at 30 September 2024.

The Possible Cash Offer values the fully diluted ordinary share capital of Assura at £1,607 million and represents:

·      a 31.9% premium to the closing share price of 37.4 pence on 13 February 2025 being the last business day prior to the announcement made by the Company on 14 February 2025;

·      a 33.9% premium to the volume weighted average Assura share price of 36.9 pence over the 1 month to 13 February 2025; and

·      a 30.6% premium to the volume weighted average Assura share price of 37.8 pence over the 3 months to 13 February 2025.

The Consortium of KKR and Stonepeak, both long-term infrastructure investors, recognises that Assura’s leading platform and portfolio are important social infrastructure assets for the UK, and has indicated its intention to deploy further capital to the portfolio to continue its growth.

Having carefully considered the Possible Cash Offer with its advisers and consulted with the Company’s major shareholders extensively following the announcement of a possible offer on 14 February 2025, the Board has indicated to the Consortium that, should a firm offer be made on the financial terms set out above, it would be minded to recommend such an offer to Assura shareholders, subject to the agreement of the other terms of the offer. Accordingly, the Board has decided to engage in discussions with the Consortium in relation to these terms and to allow the Consortium to complete a limited period of confirmatory due diligence.

The Board confirms that it has also received an indicative, non-binding proposal from Primary Health Properties PLC (“PHP”) regarding a possible all-share combination of Assura and PHP structured by way of an offer by PHP for Assura at an exchange ratio based on each company’s last reported NTA per share (the “PHP Proposal”). The implied value of the PHP Proposal based on PHP’s share price of 90.1 pence as at 13 February 2025 is 43 pence per Assura share. The Board has carefully considered the PHP Proposal with its advisers and concluded that the Possible Cash Offer is more attractive than the PHP Proposal as it provides shareholders with the opportunity to receive cash consideration at a significantly higher value per share than the proposal from PHP and with materially less risk. Therefore, the Board has rejected the PHP Proposal.

This announcement is made with the consent of the Consortium but without the consent of PHP. A further announcement will be made as appropriate.

Under Rule 2.6(a) of the Code, PHP must by no later than 5.00 p.m. on 7 April 2025, either announce a firm intention to make an offer for Assura in accordance with Rule 2.7 of the Code or announce that it does not intend to make an offer, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. This deadline will only be extended with the consent of the Panel in accordance with Rule 2.6(c) of the Code.

In accordance with Rule 2.5(a) of the Code, the Consortium reserves the right to make an offer for Assura at a lower value or on less favourable terms than the Possible Cash Offer: (i) with the agreement or recommendation of the Board of Assura; (ii) if a third party (excluding USS Investment Management Limited (as agent for and on behalf of Universities Superannuation Scheme Limited (acting in its capacity as sole corporate trustee of the Universities Superannuation Scheme)) (“USSIM”)) announces a firm intention to make an offer for Assura which, at that date, is of a value less than the value of the Possible Cash Offer; or (iii) following the announcement by Assura of a Rule 9 waiver transaction pursuant to Appendix 1 of the Code or a reverse takeover (as defined in the Code). If Assura declares, makes or pays any dividend or distribution or other return of value or payment to its shareholders, the Consortium reserves the right to make an equivalent reduction to the Possible Cash Offer. The Consortium also reserves the right to introduce other forms of consideration and/or to vary the form and/or mix of the consideration it would offer.