If you had bought around the covid low, you could have taken out your stake and re-invested in another high yielder. Where safety first was the best policy.
Since the NAV peak a constant decline, although they paid out a special dividend of 5.1% of NAV.
The company is winding down so as they sell assets the dividend will fall, current dividend 15% of the reduced share price.
Depending on how long and for how much the assets are sold for the Snowball will print a loss.
BB comment
chucko1
By the paltry volume having gone through so far (most being mine), it seems that no one gives a damn anymore.
They ought to – those repayments are equal to about 1/3 of the shrivelled market cap. When you get that amount back at flat to NAV and the SP is at a 50% discount, there would have been quite a few buyers had it not been for the revulsion many must feel about this sorry episode.
But we are only a part of the way through. It’s like a movie where most of the murders occur in the opening scenes, while the consequences of these murders are explored as the main focal point thereafter.
Still a risky proposition given the concentrated nature of the portfolio, with DEINDE being roughly 80% of the value of the market cap.
As said, at this level, 1p dividends (if adequately earned from income – they just about are) equates to 15% yield. That’s not irrelevant although hardly lavish compensation for the trials one has to bear in owning/[analysing ? – ha ha this thing.
Recent investor discussions regarding Assura Plc (AGR) reflect a cautious sentiment amid concerns about takeover interest and market fundamentals. Key commentators express skepticism about the potential bid from KKR, noting their shift of focus away from the UK healthcare sector. George Stobart articulates this anxiety, stating, “KKR’s withdrawal will lead to a straight line down to 33p.” Conversely, some investors, like bmcollins and husbod, see the potential for upside at lower price points, indicating their willingness to buy if the stock dips below 40p. Comments such as “33p would be perfect for a top-up” highlight a bullish perspective among certain segments of investors who believe in Assura’s long-term value.
Financial highlights discussed include the implications of asset sales and dividends, with references to improving yields and capital growth prospects. Notably, views from Green Street indicate some shareholder support for the board’s rejection of KKR’s offer, which they argue would not adequately reflect Assura’s intrinsic value. Investors seem to be weighing the risks of further asset impairments against the potential for future growth, suggesting a nuanced and divided outlook on the stock’s trajectory: “his anaemic growth of 3% implies a return of c10-12%,” reflects a belief in slow but steady growth. Overall, investor sentiment appears to be a mix of caution regarding market conditions and optimism about the potential for capital appreciation at favourable entry points.
Disclaimer Disclosure – Non-Independent Marketing Communication
This is a non-independent marketing communication commissioned by Sequoia Economic Infrastructure Income. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research. Kepler.
SEQI offers a yield of almost 9% without the use of gearing…
Overview Sequoia Economic Infrastructure Income (SEQI) offers exposure to infrastructure assets. The trust invests in debt, meaning that its investments are higher up the capital structure than equity and therefore more secure in the case of financial difficulty. These are private, off-market deals, which helps the specialist team managing the portfolio to generate a very high yield for investors, without the use of gearing. SEQI’s historic yield is 8.9% at the time of writing
SEQI is managed by a team of private infrastructure debt specialists, who have brought the asset class out of the banks and into the mainstream via the investment trust structure. Lending to infrastructure gives exposure to economically dynamic and vital trends such as digitalisation—via data centres, broadband networks, and telecom towers—and the greening of the grid—via renewable energy and investments in the network itself. SEQI’s portfolio is highly diversified across industries, with a focus on defensive sectors, as we discuss Portfolio.
In recent months, investment activity has included investments in digitalisation and the broadband network, and the managers report they are continuing to look for ways to invest in ESG-friendly sectors such as renewables. Activity has included a loan to finance the construction of a power plant located next to a Microsoft data centre in Ireland.
NAV performance has been stable, and dividends achieved high, with very few non-performing loans. Good progress has been made recently, and the exposure to NPLs is just 3.7%. Nonetheless, in keeping with the broader investment trust sector, the Discount has remained wide and sits at 19% at the time of writing. The board has embarked on one of the most extensive buyback programmes in the sector to boost shareholder value.
Analyst’s View It is easy to get lost in the details of a private debt portfolio, but at its core, it is a relatively simple model. Companies that can’t or don’t want to access the public debt markets borrow money from specialist teams of lenders who have the knowledge and resources to do all the underwriting work and the research necessary to satisfy themselves about the creditworthiness of the borrower. The lenders earn a higher yield for doing that work (and saving borrowers the costs of raising public debt) and for the illiquidity of the private debt.
This illiquidity means that trading is not a major part of the model like a traditional bond fund. The management team, led by Steve Cook, make loans for three to five years with the aim of holding to maturity. Companies will prefer to raise money this way if they are raising small amounts of debt or if they operate in specialist areas or want bespoke conditions in the deals – Steve and his team, with many years of experience originating this debt in investment banks, are able to assess the risks and do the analysis required to make these deals work .
We think the main benefit from an investor’s point of view, is the high yield, which can be achieved without the use of Gearing and without the volatility in the value of the investments. Most of the trusts which offer yields that compare to SEQI’s, do so by gearing up extensively, bringing costs and volatility. Similarly, short-dated loans, roughly 40-50% floating rate at any one time, are less volatile with regard to valuation than publicly traded debt, which will typically have a higher duration. SEQI pays to have its portfolio revalued each month by an external party, PWC, which should reduce any concerns the value is stale.
As an investment trust, there is, however, potential volatility in the shares, and a wide Discount has opened up. The board is committed to returning substantial amounts of capital via buybacks, which should provide some comfort, but in our view interest rate cuts are likely to be the cause of a sustained shift in the rating.
Bull A high dividend yield from a portfolio with relatively low credit risk Highly diversified exposure to a specialist asset class via an experienced team Significant buyback programme offers additional source of NAV return and demonstrates conviction in portfolio
Bear Unfamiliar asset class for many investors Yield on floating rate portion of portfolio may fall with interest rates As a credit fund, only modest NAV upside expected
Not a share where dividends are re-invested back into the share but the high dividend is used to buy other Trusts while the dividend yields are above 7%.
The Snowball’s comparison share, remember when the price is above the cloud the sun is shining on your position but below the cloud it might be raining on your parade. Now back to it’s November price area. The Snowball has in that period earned £27 pounds a day including weekends and bank holidays. GRS
Also an ETF normally trades around it’s NAV so no discount to NAV for a Brucie bonus if you are lucky
To date this year the Snowball has two takeover approaches, sadly they were both rejected but a profit of £3,182 has been re-invested in the portfolio so an extra £222 p.a. hopefully for ever, well your ever. Stick to your plan until it sticks to you.
Using good ole hindsight but that is the only thing you can base your decision on, for better or worse, not a share to re-invest your dividends in.
Not a share you might have bought for your Snowball as until recently as the share price has fallen the dividend increased enough to take the risk.
Current yield 8%
Assura plc, the UK’s leading diversified healthcare REIT, is pleased to announce it has exchanged on the disposal of seven assets for a gross consideration of £64 million.
The latest disposals mean that since the start of the financial year, the Company has sold 30 assets for gross proceeds of £200 million at a weighted average net initial yield of 4.8%.
The net proceeds have been deployed in reducing the acquisition debt used to finance the £500 million private hospital portfolio acquired in August 2024 at 5.9% yield on cost.
The disposal announced today marks further progress in Assura’s overall debt reduction plans and the Company’s proforma net LTV will reduce to 47%.
The sale also reinforces that the quality of the Company’s portfolio and the resilience of its underlying cash flows remain highly attractive to the investment market.
The disposal is immediately earnings enhancing as the cash receipts will be used to repay the revolving credit facility.
The seven assets disposed of today have been sold into Assura’s £250 million joint venture. Assura retains a 20% equity interest in the joint venture resulting in net proceeds of £51 million. Following this transaction, the joint venture has gross assets of £172 million. Assura continues to act as property and asset manager to the joint venture, receiving management fees linked to the valuation of the portfolio.
Jonathan Murphy, CEO, said:
“Reaching this £200 million milestone in our disposal programme means we are on track to achieve our target of net debt to EBITDA below 9 times and LTV below 45% well ahead of the previously outlined timetable. This accelerated delivery and our ability to achieve sales is testament to our operational excellence and the quality and attractiveness of our property portfolio.
“The disposal programme was announced at the time of our transformational acquisition of high-quality private hospital assets in August 2024. The acquisition has positioned Assura as a leader in a structurally supported market, and has cemented our position as the UK’s leading diversified healthcare REIT offering an attractive investment opportunity into favourable long-term trends.”
Notice of Dividend
Assura plc (“Assura” or “the Company”), UK’s leading diversified healthcare REIT, today announces that the next quarterly interim dividend of 0.84 pence per share will be paid on 9 April 2025 to shareholders on the register on 7 March 2025 (the “Record Date”). The Ex-dividend Date will be 6 March 2025.
18 February 2025
Statement re Possible Offer from Kohlberg Kravis Roberts & Co. Partners L.L.P. (“KKR”)
The Board of Assura plc (“Assura” or the “Company”) notes the announcement from KKR yesterday relating to the indicative, non-binding proposal that it submitted to the Assura Board on 13 February 2025 regarding a possible cash offer for the entire issued share capital of the Company at 48 pence per share (the “Proposal”).
The Board confirms that it considered the Proposal carefully with its advisers and concluded that it materially undervalued the Company and its prospects and therefore rejected it unanimously. No further proposal from KKR has been received.
The Board of Assura also notes the announcement yesterday from 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”) of its intention not to make an offer for Assura, as part of a consortium with KKR or otherwise, other than in the circumstances set out in USSIM’s announcement.
The Board remains confident in the long-term prospects of the Company and believes that Assura is strongly positioned to create value for shareholders.
Shareholders are advised to take no action.
A further announcement will be made as appropriate.
Under Rule 2.6(a) of the Code, KKR must by no later than 5.00 p.m. on 14 March 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.
This announcement has been made without the consent of KKR.
I’ve bought back the AGR shares recently sold 24,159 for 10k.
It’s most probable the Snowball could have made a bigger profit with WHR as it’s now in ‘play’. But whilst making a profit is a positive, as you increase the size of your Snowball, the only consideration is the dividend to buy more shares that pay a dividend. The dividend with AGR is fairly secure and there is still the outside chance they will agree a deal with the bidder at a higher price.
That completes the buying for the Snowball, so most probably any dividends earned this year will be added to the highest yielding shares in the portfolio rather than opening a new position.
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