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RAVP

Gilts, bonds, and interest-bearing shares
GoSeigen
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Re: RAVP

#230399

Postby GoSeigen » June 18th, 2019, 11:26 am

Kenny wrote:What I am not in favour of is a person who does not understand a company's accounts, posting that "there might be a long term problem" when they have no clue.


Well, hey, you don't get to dictate what people post here. If you don't like it, maybe take your toys back to the other place.

GS
[EDIT: I should just add: I have also had my differences with PrefInvestor, but I absolutely defend his right to be able to post "I am a bit concerned that there might be a long term problem". Why should he not be allowed to express his fears, no matter how poor his understanding of accounts are perceived to be?]

PrefInvestor
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Re: RAVP

#230570

Postby PrefInvestor » June 18th, 2019, 7:18 pm

Kenny wrote:If any investor cannot understand a company's accounts, they should not invest in that company.


Well Kenny requiring people to be able to read and understand the accounts of any company they invest in would set a very high bar and would constrain share ownership to only an elite community. I freely concede that it would not include me.

BUT I DO read all the annual reports, half yearly reports and trading updates for all my investments. I specifically look for the following:-
a) Increasing revenue, profit, free cash flow, dividend and dividend cover, NAV - all year on year
b) Limited and ideally reducing debt or LTV
c) For REITs and property companies I also look for increasing occupancy rates and rents
d) Any significant events that might be red flags.

So hopefully I am not totally ignorant (please feel free to think differently, its already clear that you do).

Looking at the March 2019 Edison report RAV has fallen into loss in 2018 having been profitable previously and I am concerned that this might possibly continue into future years. As far as I can see revenue is down, rental income is down, occupancy rates and rents are both up, expenses are up and the company reported a loss due to the property revaluation and FX effect apparently. Assets are up but so is debt. NAV per share is down significantly.

A pretty mixed picture there in total IMHO and I could see nothing (obvious to me) to say that it won’t happen again in the future - especially if the GBP/Rouble exchange rate is poor.

So what with the current Woodford situation I took the decision some days ago to exit from this investment. I still like the company but wont be re-investing here until there is further clarity and perhaps not even then. So Kenny you will be pleased to hear that I now fully comply with your rule in respect of RAVP.

I wish all holders the very best with their investment.

Pref

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Re: RAVP

#238081

Postby Walkeia » July 20th, 2019, 5:14 pm

1 July 2019

Raven Property Group Limited ("Raven" or the "Company")

Conditional purchase of its own ordinary shares

The Board of Raven refers to its announcement of earlier today and announces that the Company has now entered into conditional agreements to purchase off-market up to 106,230,374 of its ordinary shares from two of its institutional shareholders, representing up to 17.7% of the Company's current issued share capital. Under each agreement the purchase price for the shares to be acquired by the Company is 36 pence in cash per ordinary share.

The first agreement comprises the purchase of 72,144,978 ordinary shares from Woodford Investment Management Limited ("WIM") (acting on behalf of certain underlying funds), representing 12.0% of the Company's current issued share capital.

The second agreement comprises the purchase of a minimum of 17,000,000 ordinary shares and not more than 34,085,396 ordinary shares from Invesco Asset Management Limited (acting as agent for its underlying funds) ("IAML"), representing between 2.8% and 5.7% of the Company's current issued share capital. Under the agreement, any purchase by the Company of shares from the Invesco funds is subject to the satisfaction of certain conditions. In addition any purchase pursuant to the contract in excess of 17,000,000 ordinary shares shall be at the discretion of IAML and therefore the Invesco funds will not be prohibited from selling such excess shares in the market prior to the completion of the buy back transaction.

The shares proposed to be acquired from WIM represent all of the ordinary shares in the Company held by funds managed by WIM. The proposed purchase of these shares will be a related party transaction under the FCA's Listing Rules as WIM and its underlying funds are together a substantial shareholder of the Company for the purposes of the Listing Rules.

The shares proposed to be acquired from IAML will also be a related party transaction under the FCA's Listing Rules as IAML and its underlying funds are together a substantial shareholder of the Company for the purposes of the Listing Rules.

Each transaction with WIM and IAML will each be conditional, inter alia, on ordinary shareholders, preference shareholders and convertible preference shareholders passing the resolutions necessary to authorise both transactions.

The Company intends to cancel a minimum of 89,144,978 ordinary shares acquired on completion of the transactions with the balance of any ordinary shares purchased and not cancelled to be held as treasury shares.

At 31 December 2018 the Company reported a Sterling net asset value per share of 48 pence when the Sterling/Rouble exchange rate was 88.35. Since then, the Rouble has strengthened to 80.0 (at 28 June 2019 central bank rate) and the equivalent 31 December 2018 net asset value per share is 65 pence based on current exchange rates. Following the 31 May 2019 tender offer and the cancellation of the ordinary shares proposed to be acquired from funds managed by WIM and the minimum number of ordinary shares to be acquired from IAML, on a pro forma basis using current exchange rates, the net asset value per share will increase by a further 10.8% to 72 pence per share.

As reported in our 2018 Annual Report, the Russian economy and the logistics real estate market continue to improve. The Central Bank of Russia has recently cut its headline rate by 0.25% to 7.5%, market rental levels are increasing and vacancy is decreasing.

Breelander
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Re: RAVP

#238085

Postby Breelander » July 20th, 2019, 5:42 pm

Walkeia wrote:1 July 2019

Raven Property Group Limited ("Raven" or the "Company")

Conditional purchase of its own ordinary shares....


You could have just posted the link: https://www.investegate.co.uk/raven-pro ... 42029857D/

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Re: RAVP

#238090

Postby Kenny » July 20th, 2019, 6:07 pm

This is an amazing deal for the company.

Sorry that some people sold RAVP in the low one-thirty's. They will probably wait to buy back when the price reaches 160p before realising that the yield is very secure. Still on a 7.5% yield at 160p.

Right now there seems to be a institution with a buy order in the background because all sellers are being taken out.

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Re: RAVP

#238128

Postby Walkeia » July 20th, 2019, 11:06 pm

I am still researching after coming across this in the weekend press. I am certainly surprised by the agreed sale price; especially after considering the mechanical NAV revaluation due to Sterling Ruble. My personal interest lies more in RAV as opposed to the pref share so I will fall quiet here but i’m considering building a position in coming weeks pre-August results.

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Re: RAVP

#238136

Postby Kenny » July 21st, 2019, 12:59 am

Do please let us know where in the weekend press it was mentioned?

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Re: RAVP

#238155

Postby PrefInvestor » July 21st, 2019, 9:28 am

Well the company’s purchase of the WIM & Invesco RAV holdings may well prove to be a clever move, certainly it seems to have caused a recovery in the RAVP and RAVP share prices, though on very low volume in the case of RAVP (only 17 trades all week as far as I can see ?). Though I doubt that spending £36 million on this purchase was on the BODs agenda prior to the Woodford issue and doing so might disrupt their business priorities ?.

Anyway as of 30th June according to the company’s web site, WIM still holds 8.2% (~£11M) of RAVP and a very large 44.3% (~£100M) of RAVC shares. Given that WIM still isn’t out of woods yet by a long way, WIM may yet have to use these assets to fund redemptions. So while RAVs situation has improved I personally do not see them being completely in the clear on this issue as yet. Many other Woodford holdings have been (and remain) severely blighted.

I still also remain concerned over RAVs profitability in their new largely ruble operating format and will be interested to see their results which I believe are due in August ?. If last year does prove to have been a one off then that will allay my concern in that respect.

I had enough angst with preference shares with the Aviva events in March 2018 and I don’t need anymore. I sold ~75% of my RAVP holding at 137 and the rest later at 132 to close my position, which wasn’t large. I sold at a profit and have no regrets and have deployed the money elsewhere. Personally I will not consider investing in RAVP again until I can see that the company is clearly in profit and that the WIM issue is fully resolved.

I genuinely wish all RAVP holders all the best with your investment. I hope for your sake that it pushes on towards 160 as Kenny clearly anticipates.

ATB

Pref

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Re: RAVP

#238542

Postby Walkeia » July 22nd, 2019, 10:41 pm

Hi Kenny & Pref investor,

It was investment trust insider which mentioned Raven in a Woodford related article. Thereafter I looked deeper into the company as I felt a company buying back 100% of WIM shares was a sign of strength. Having looked further into Raven I took the plunge today and bought a small holding but classify the equity I hold as high speculative. Here is my two pence from an initial look into the company so I apologies if I have missed any important aspects.

I found the Raven structure needlessly complicated for what I expected to be a Russian property company however it appears anything but. Effectively, Raven holds RUB denominated assets financed partially in USD & EUR but with listings in GBP, Rand, Russia and some European exchanges. Therefore,

1. We have the standard property risk - think BBOX of Russia and this is the risk I was principally looking for.
2. Funding risk - associated funding cost and willingness of banks to lend at re-financing. Note USD and EUR central bank rates substantially lower than Russia.
3. Exchange rate risk - both on the funding and then again into the share price listings

Points two and three are intrinsically linked in economic theory. This may be true but I've spent my career trying to fathom all the other factors which are feeding in - principally politics so while economics dictates there shouldn't be a funding arbitrage in the maths it doesn't account for many real world risks. Consequently, it feels like Raven looks more like a hedge fund choosing to buy a high yielding long term asset; fund it in the cheapest way possible globally and manage arising currency exposures to maximise returns. Fantastic if it works - personally I don't mind this strategy - owning Russian risk with Trump as the US president who admires Putin and is screaming at the Fed to lower rates but I certainly don't feel I've bought a property company.

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Re: RAVP

#238554

Postby PrefInvestor » July 23rd, 2019, 12:14 am

Hi Walkeia,

Well I hope you got the benefit of today’s rise in the RAV share price in your purchase ?.

I was very happy investing in the company when they were clearly profitable AND operated their rents primarily in USD, making them less vulnerable to US antics and Ruble related risks. Now they have gone almost fully native by the sound of it with the majority of their rents being set in Rubles and some in EUR (my understanding from reading the Edison report) and this is more of a concern.

They have just declared a loss for last year and I am concerned that operating a Russian property company operating mainly in Rubles when they are primarily listed in Guernsey and much of their outgoings (eg pref and other dividends) are going to be in GBP might pose a risk unless the exchange rates move in a positive way for them. Also presumably a property revaluation will be required every year too (pretty sure that would be mandatory for a UK property company) presenting still more currency risk, seems that it was doing a property valuation that pushed them into loss last year ?.

The Woodford situation I also still see as a concern. Yes the company have just bought all his ordinary RAV shares in what I am guessing was a negotiated quick sale given their position. BUT WIM still owns ~£100 million worth of RAVC and about £10 million worth of RAVP according to the company web site. Given that the market cap of the company is only ~£245 million that’s a big exposure to Woodford still it seems to me.

I really hope that your investment works out for you, but these are the reasons that I decided to exit. Hey maybe they are completely off beam, just have to wait and see.

ATB

Pref

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Re: RAVP

#238555

Postby Alaric » July 23rd, 2019, 12:22 am

PrefInvestor wrote:. BUT WIM still owns ~£100 million worth of RAVC and about £10 million worth of RAVP according to the company web site. Given that the market cap of the company is only ~£245 million that’s a big exposure to Woodford still it seems to me.


Whilst borrowings are not unusual for a property company, doing them as Prefs is. Was this something to do with the legal point that Prefs count as shares rather than loans or bonds and thus easier to justify to the Woodford investment mandate?

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Re: RAVP

#238558

Postby Kenny » July 23rd, 2019, 1:14 am

WIM sold all £100m of it's RAVC holding on Monday at about 97p - with some ease it appears.

PrefInvestor
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Re: RAVP

#238572

Postby PrefInvestor » July 23rd, 2019, 7:14 am

Yes I can see those RAVC trades yesterday, mostly at around 95.x when normal bid/offer pricing was 111/114. £128 millions worth were sold In 2 trades alone (£83m + £45m) just after 14:00 yesterday 22/7 looking at the trade data and there many more £1 million plus trades after that.

Will be interesting to see what if anything that does to RAVC pricing today and if there is any form of RNS.

ATB

Pref
Last edited by PrefInvestor on July 23rd, 2019, 7:17 am, edited 1 time in total.

PrefInvestor
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Re: RAVP

#238573

Postby PrefInvestor » July 23rd, 2019, 7:16 am

Post deleted, sorry finger trouble. Moderator please delete.

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Re: RAVP

#238593

Postby Kenny » July 23rd, 2019, 9:12 am

No movement in the share price today - so none of the buyers are trying to sell. They would have known before they purchased RAVC, that it seldom trades so there is little or no liquidity.
I don't expect a RNS because one is not required.

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Re: RAVP

#238682

Postby Walkeia » July 23rd, 2019, 3:46 pm

Thanks for feedback guys. I share both your concerns pref investor and Kenny’s optimism. I feel the structure potentially hugely leverages returns if the view is correct and the WIM exit adds to this. Happy I bought in the AM before the uptick yesterday. I just have a sense this company is structured to maximise Anton Bilton’s payoff if successful and that is why we have preference / convertible capital structure lines (fair enough to me). I actually like the structure / risk the more I think about it. I’m intrigued to the convertible sale and will read up tonight.

PrefInvestor
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Re: RAVP

#238836

Postby PrefInvestor » July 24th, 2019, 9:10 am

Well I did a couple of dummy buys this morning (24/7) just to check out if the WIM sale had affected prices at all. I found I could buy RAVC for 109 (Bid/Offer was 111/114 before the sale, 109/114 today ?) and RAVP for 135.2 (Bid/Offer 135/137). RAV still rising though by the look of it at ~42 according to investing.com, didnt do a dummy buy there.

ATB

Pref

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Re: RAVP

#238874

Postby hiriskpaul » July 24th, 2019, 10:43 am

Picked up a small number of RAVC this morning at 109 (8.8% YTM). IMHO a reasonable buying opportunity for the highest ranking shares thrown up by Woodford's problems. Will be looking to buy more if the price drops.

PrefInvestor
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Re: RAVP

#239052

Postby PrefInvestor » July 24th, 2019, 11:07 pm

hiriskpaul wrote:Picked up a small number of RAVC this morning at 109 (8.8% YTM).


Hi hiriskpaul, I don’t know a lot about RAVC (only ever held RAVP myself), but I’m a bit confused by your YTM (yield to maturity ?} point. I had a quick look at the prospectus this evening just for interests sake and these look to be just preference shares with the right to convert to ordinary shares in certain situations eg a takeover. I could see no maturity date, I would not say they are bonds and they look to pay a dividend of 6.5p in 4 equal quarterly instalments. So at a buying price of 109 that’s an effective yield of 6.5/1.09 = 5.96% isn’t it, don’t know where your 8.8% figure comes from ?.

Anyway I am probably missing some key facts as I have only skimmed the prospectus. Would appreciate an explanation of your comment. Thanks.

ATB

Pref

PS Sorry when I said “Prospectus” I meant the “Articles of Incorporation”.

PrefInvestor
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Re: RAVP

#239076

Postby PrefInvestor » July 25th, 2019, 7:30 am

Hi Again hiriskpaul, OK looking back to page 1 of this thread I found Wozzitworthit‘s post which explains what’s going on. Missed the reference to them being redeemed at 135 in 2026 in my skim read of the Articles. Sorry about that.

ATB

Pref


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