A trust delivering secure income by investing in shared ownership and rental portfolios. This trust may use gearing.
A article by oakbloke on RESI
Note up 5% today could be related.
Dividend 1.03p per quarter. Therefore 8% dividend.
43% discount (based on yesterday share price).
The article is about the hidden value. Note some of the assets are going through sales.
"The key differentiators of ReSIās investment approach are:
Secure rents underpinned by pensions, housing welfare or shared owner stakes
Incredibly diversified income stream from thousands of homes and residents
Over Ā£30k of government subsidy received for each new shared ownership home we deliver via ReSI Housing Limited, our wholly-owned for-profit Registered provider of social housing, allowing us to provide below-market rents to residents compared to private rented housing*
Unique proprietary shared ownership Customer and Environmental Charters maximises social impact"
Another look at RESI
"It is also the case that thereās a Ā£20m sale of assets ongoing as part of an exit from Local Authority business (housing homeless folk). There are two remaining assets in legals which āshouldā complete in H2. The variable debt relating to this and is due end of 2024 therefore there is a qualified point of āgoing concernā as a result. RESI say they fully expect the sale to conclude and the debt to be repaid, and that alternative funding options exist if not. You could argue this to be an Achilles heel so itās something to be comfortable with - or not.
Otherwise, debt is on 20 year average terms with extremely favourable and low rates of 3.5% fixed until 2043, and RPI + 0.5% (up to a capped 5.5%) over 40 years."
This sort of debt is a rarity. Inflation results in higher rent with no increases in interest rates till 2043.
The problem appears to be some high interest rate RCF related to local authority housing for the homeless. This is in the process of being sold and the debt will be paid off.
Dividends have been reduced so they are now covered 1.17x
Information taken from Oak Bloke
Up 12% start of day.
Going into wind down.
Doubled up a couple of days ago. They were in the process of selling of some local authority (homeless housing) and paying of the RCF.
The remaining properties are covered by a 3.5% long term mortgage.
Reason given for wind down to small at Ā£100 million. Plus very large discount.
I would vote against it but freetrade only allow voting on US companies.
Ridiculous attitude.
Quoteddata believe the assets may fetch close to NAV.
I believe the shared ownership housing (a third of the portfolio) will or may even have to go as job lot. Institutional purchase. Quite popular with institutions.
The retirement living maybe sold individually so long sale process. Sold some recently above NAV. The right offer and they could be sold as a job lot or broken down into smaller lots.
In the meantime the dividend should still be being paid although less as the capital is returned.
Presently on 30% discount. IF IF they sell at NAV then the upside is 42%.
Dividend is presently 7% covered 1.2 times.
EX dividend today. Share price up slightly. Also dividend payment date tomorrow BUT for the previous dividend.
Odd small movement upwards today (considering the rest of the market) BUT the share price is very volatile every day.
Edit:
Just gone 1.5% gain to 4.7% gain.
Worth a limit order??
38% discount on a company in wind down. Present price similar to day before announcement of wind down. If sold at NAV 52% gain.
Iāve been in for a few months, picked up some more recently. Think 65p is easily achievable, if not 70p.
NAV is 87p. An offer for the lot would probably be ignored at 80p or less.
Dividend is near enough 8% at present share price and covered 1.2 times.
8% is a reasonable payment to wait and see.
IFRS NAV is 76p, or 70p taking into account the indexed debt. If lenders enforce change of control on the debt (which they likely will), bidders will only buy at a discount to take account of increased financing cost. Though this is offset somewhat by revaluation surplus. So I donāt anticipate an offer over 75p-ish.
1 Like
If they redid the vote I would vote against a wind down. I wasnāt offering the option of voting previously.
Far far to many wind downs. Owning shares requires a certain amount of patience which appears to be off the table nowadays.