Donate to Remove ads

Got a credit card? use our Credit Card & Finance Calculators

Thanks to ExFM,ErroneousBee,GSVsowhat,Shelford,Hypster, for Donating to support the site

REA Holding Prefs

Gilts, bonds, and interest-bearing shares
roland500
Posts: 11
Joined: October 13th, 2018, 3:55 pm
Has thanked: 1 time
Been thanked: 1 time

Re: REA Holding Prefs

#253278

Postby roland500 » September 23rd, 2019, 12:55 pm

Sold out of these this morning. Noticed that the half-yearly report was published last week A grim read. It informs that the December divi will be deferred too. There are too many references to funding requirements including the need to raise £31.9m to refinance notes falling due next August. It goes on to inform that it is intended to submit "proposals to deal with the arrears of pref shares divi and to resume payments in cash dividends" provided CPO prices continue to recover whilst recognising the need for additional equity. My read is that it is proposed to address the divi arrears by offering more of the same. Too much uncertainty for me with almost total dependence on the CPO price increasing much faster that it is.

Wizard
Lemon Half
Posts: 5048
Joined: November 7th, 2016, 8:22 am
Has thanked: 23 times
Been thanked: 901 times

Re: REA Holding Prefs

#267990

Postby Wizard » November 28th, 2019, 5:01 pm

Holders may be interested in this...

https://www.rea.co.uk/websites/reaholdi ... ID=1863221

The group is currently reviewing the budgets for the group for 2020 and their implications for the resumption of preference dividend payments in light of the recent rise in CPO prices.

Sounds moderately positive to me.

Wizard
Lemon Half
Posts: 5048
Joined: November 7th, 2016, 8:22 am
Has thanked: 23 times
Been thanked: 901 times

Re: REA Holding Prefs

#275421

Postby Wizard » January 6th, 2020, 12:59 am

Wizard wrote:Holders may be interested in this...

https://www.rea.co.uk/websites/reaholdi ... ID=1863221

The group is currently reviewing the budgets for the group for 2020 and their implications for the resumption of preference dividend payments in light of the recent rise in CPO prices.

Sounds moderately positive to me.

The price of CPO is now knocking $800, up from below $500 last summer when the first pref divi was deferred. The price of RE.B is now above 90p. Are we close to a point where the deferred divis are paid?

moorfield
Lemon Quarter
Posts: 2081
Joined: November 7th, 2016, 1:56 pm
Has thanked: 640 times
Been thanked: 627 times

Re: REA Holding Prefs

#275630

Postby moorfield » January 6th, 2020, 11:45 pm

Wish I'd had the cojones to buy these at <60p. But I already had too much in my portfolio.

moorfield
Lemon Quarter
Posts: 2081
Joined: November 7th, 2016, 1:56 pm
Has thanked: 640 times
Been thanked: 627 times

Re: REA Holding Prefs

#283026

Postby moorfield » February 7th, 2020, 4:38 pm

Trading Update:

https://www.rea.co.uk/websites/reaholdi ... ID=1901419

The group is now working on arrangements regarding refinancing of the £30.9 million nominal of 8.75 per cent sterling notes 2020 that fall due for repayment in August 2020.

Provided that substantially all the sterling notes are successfully refinanced, crops continue to achieve budgeted levels and the CPO price is at least maintained around current levels, the directors intend to resume payment of cash dividends on the group's preference shares in 2020. The directors also plan progressively to catch up the arrears of dividend on the preference shares, commencing in 2020 with a payment of 1 per cent per share at the end of March 2020.



Really
wish I'd had the cojones to buy these at <60p.

Arborbridge
Lemon Half
Posts: 6209
Joined: November 4th, 2016, 9:33 am
Has thanked: 1436 times
Been thanked: 2273 times

Re: REA Holding Prefs

#283028

Postby Arborbridge » February 7th, 2020, 4:45 pm

This bunch are in part responsible for the destruction of orangutan habitat. I wouldn't get involved - I did once accidentally, but then sold out when I realised what they are up to: destruction of forest.

Arb.

Wizard
Lemon Half
Posts: 5048
Joined: November 7th, 2016, 8:22 am
Has thanked: 23 times
Been thanked: 901 times

Re: REA Holding Prefs

#283200

Postby Wizard » February 8th, 2020, 11:59 pm

moorfield wrote:Trading Update:

https://www.rea.co.uk/websites/reaholdi ... ID=1901419

The group is now working on arrangements regarding refinancing of the £30.9 million nominal of 8.75 per cent sterling notes 2020 that fall due for repayment in August 2020.

Provided that substantially all the sterling notes are successfully refinanced, crops continue to achieve budgeted levels and the CPO price is at least maintained around current levels, the directors intend to resume payment of cash dividends on the group's preference shares in 2020. The directors also plan progressively to catch up the arrears of dividend on the preference shares, commencing in 2020 with a payment of 1 per cent per share at the end of March 2020.



Really
wish I'd had the cojones to buy these at <60p.

I would have been unlikely to buy more, I already had enough for such a tiny outfir, I'm just glad I didn't dump them.

How do you read this 1%. They have missed two dividends, so owe us 9p per share, are they saying they will pay out 1p in March? And the I guess restart normal payments in June. Or are they saying they will pay 1% of the deferred amount per share?

moorfield
Lemon Quarter
Posts: 2081
Joined: November 7th, 2016, 1:56 pm
Has thanked: 640 times
Been thanked: 627 times

Re: REA Holding Prefs

#283226

Postby moorfield » February 9th, 2020, 9:58 am

Wizard wrote:
How do you read this 1%. They have missed two dividends, so owe us 9p per share, are they saying they will pay out 1p in March? And the I guess restart normal payments in June. Or are they saying they will pay 1% of the deferred amount per share?


Yes I read this as 1p per share (of the deferred 2019 dividend) in March, and the normal 4.5 payment in June.

moorfield
Lemon Quarter
Posts: 2081
Joined: November 7th, 2016, 1:56 pm
Has thanked: 640 times
Been thanked: 627 times

Re: REA Holding Prefs

#283229

Postby moorfield » February 9th, 2020, 10:14 am

Arborbridge wrote:This bunch are in part responsible for the destruction of orangutan habitat. I wouldn't get involved - I did once accidentally, but then sold out when I realised what they are up to: destruction of forest.


We've discussed this before - I'm afraid I leave such concerns at my broker's login page. I find that easier because to start calling out issues like this can begin to look hypocritical, and inconsistent. (For example, I'd wager your holding of BP has inflicted more environmental destruction than mine of REA. And since we both hold IMB, BATS you are presumably as equally apathetic as I am about the health problems these two have peddled onto millions of people.)

FWIW, read https://www.rea.co.uk/websites/reaholdi ... sland.html

Arborbridge
Lemon Half
Posts: 6209
Joined: November 4th, 2016, 9:33 am
Has thanked: 1436 times
Been thanked: 2273 times

Re: REA Holding Prefs

#283259

Postby Arborbridge » February 9th, 2020, 12:45 pm

moorfield wrote:
Arborbridge wrote:This bunch are in part responsible for the destruction of orangutan habitat. I wouldn't get involved - I did once accidentally, but then sold out when I realised what they are up to: destruction of forest.


We've discussed this before - I'm afraid I leave such concerns at my broker's login page. I find that easier because to start calling out issues like this can begin to look hypocritical, and inconsistent. (For example, I'd wager your holding of BP has inflicted more environmental destruction than mine of REA. And since we both hold IMB, BATS you are presumably as equally apathetic as I am about the health problems these two have peddled onto millions of people.)

FWIW, read https://www.rea.co.uk/websites/reaholdi ... sland.html


I quite understand that point, and it is one which trouble me, naturally and it was certainly not a missile aimed at your own position. As you say, it's all been discussed, but in this particular case I thought to mention it in case people hadn't realised that they were investing in the destruction of orangutan habitat - and not only those animals but the complete biosystem being replaced by a monculture. Those that care might like the information: those that don't will ignore. Until someone told me or I read it somewhere, I hadn't realised the involvment of REA holdings either. Quite frankly, REAs selfjustification doesn't help much, although I don't blame them for trying to lessen the bad publicity. Intuitively it's hard to argue that the work they do is anything but destroying nature, even if a tiny amount of good work is done to offset it. Monoculture and the destruction of habit is just that, and it cannot be offset in any meaningful way. That is, a big minus number less a little positive number is still a big minus number. Nothing can alter that.

The way I rationalise my own investment is that, yes, I am like most of us deeply involved in things which destroy the world, but I see no need to pile on my guilt by adding a palm oil company - so I sold it. As for fags - people can choose not to smoke so more fool them if they do.

Arborbridge
Lemon Half
Posts: 6209
Joined: November 4th, 2016, 9:33 am
Has thanked: 1436 times
Been thanked: 2273 times

Re: REA Holding Prefs

#283261

Postby Arborbridge » February 9th, 2020, 12:51 pm

moorfield wrote:We've discussed this before - I'm afraid I leave such concerns at my broker's login page. I find that easier because to start calling out issues like this can begin to look hypocritical, and inconsistent.



I agree this is a real problem for anyone with concerns for the environment. I don't think leaving it at the brokers login is a satisfactory way of proceeding, but have to agree it makes life simpler!
Neither do I think it is a smart way to proceed if people are trying to bring attention to these matters (I'm not thinking of us ordinary folk, but the better known celebrity people) by pointing out that they fall short of being gods and goddesses themselves. All human carry guilt for the damage their very existence causes, but those that show some awarenes of this and try to solve some of the problems deserve support, not brickbats even while they fall short of perfection. At least they are trying!

Arb.

Wizard
Lemon Half
Posts: 5048
Joined: November 7th, 2016, 8:22 am
Has thanked: 23 times
Been thanked: 901 times

Re: REA Holding Prefs

#285909

Postby Wizard » February 21st, 2020, 2:55 pm

moorfield wrote:Trading Update:

https://www.rea.co.uk/websites/reaholdi ... ID=1901419

The group is now working on arrangements regarding refinancing of the £30.9 million nominal of 8.75 per cent sterling notes 2020 that fall due for repayment in August 2020.

Provided that substantially all the sterling notes are successfully refinanced, crops continue to achieve budgeted levels and the CPO price is at least maintained around current levels, the directors intend to resume payment of cash dividends on the group's preference shares in 2020. The directors also plan progressively to catch up the arrears of dividend on the preference shares, commencing in 2020 with a payment of 1 per cent per share at the end of March 2020.



Really
wish I'd had the cojones to buy these at <60p.

With CPO having dropped from just over $800 at the time of that announcement to about $715 I suspect the dividend resumption may be off the table now. I am guessing the market may have some insight in to this as they are nearly 5% off today.

moorfield
Lemon Quarter
Posts: 2081
Joined: November 7th, 2016, 1:56 pm
Has thanked: 640 times
Been thanked: 627 times

Re: REA Holding Prefs

#294267

Postby moorfield » March 25th, 2020, 9:54 pm

Further announcement re preference dividend

https://www.rea.co.uk/websites/reaholdi ... -news.html

Since the announcement on 6 March 2020, concerns about COVID-19 have escalated dramatically while the crude palm oil ("CPO") price has fallen further to a current level of approximately $600 per tonne (CIF Rotterdam). That compares with the price on 7 February 2020 of $820. Whilst the company continues to believe that there will, in due course, be a strong recovery in CPO prices from the current low level, the measures now being implemented to control the spread of COVID-19 make it likely that recovery will take longer than the company originally hoped. Moreover, the continuing disruption of international financial markets is likely to limit access to those markets until greater control of the virus has been achieved.

In light of the current economic environment, the company will give further consideration to the timing of the planned dividend payment of one per cent per preference share and will make a further announcement as regards such preference dividend in due course.


Back to sub 60p. Anyone tempted by this 15.4% (cumulative) yield?

Wizard
Lemon Half
Posts: 5048
Joined: November 7th, 2016, 8:22 am
Has thanked: 23 times
Been thanked: 901 times

Re: REA Holding Prefs

#295376

Postby Wizard » March 29th, 2020, 1:21 pm

moorfield wrote:Further announcement re preference dividend

https://www.rea.co.uk/websites/reaholdi ... -news.html

Since the announcement on 6 March 2020, concerns about COVID-19 have escalated dramatically while the crude palm oil ("CPO") price has fallen further to a current level of approximately $600 per tonne (CIF Rotterdam). That compares with the price on 7 February 2020 of $820. Whilst the company continues to believe that there will, in due course, be a strong recovery in CPO prices from the current low level, the measures now being implemented to control the spread of COVID-19 make it likely that recovery will take longer than the company originally hoped. Moreover, the continuing disruption of international financial markets is likely to limit access to those markets until greater control of the virus has been achieved.

In light of the current economic environment, the company will give further consideration to the timing of the planned dividend payment of one per cent per preference share and will make a further announcement as regards such preference dividend in due course.


Back to sub 60p. Anyone tempted by this 15.4% (cumulative) yield?

This is an odd announcement as it only seems to refer to potentially paying the cumulative amount owed, no reference to dividend resumption.

88V8
Lemon Quarter
Posts: 1528
Joined: November 4th, 2016, 11:22 am
Has thanked: 261 times
Been thanked: 481 times

Re: REA Holding Prefs

#295420

Postby 88V8 » March 29th, 2020, 2:54 pm

If one wants risk, I think Enquest ENQ1 and Premier PMO1 are more interesting.
REA just look too shaky for me to buy in again.

V8

moorfield
Lemon Quarter
Posts: 2081
Joined: November 7th, 2016, 1:56 pm
Has thanked: 640 times
Been thanked: 627 times

Re: REA Holding Prefs

#314414

Postby moorfield » June 1st, 2020, 10:54 pm

https://www.rea.co.uk/websites/reaholdi ... ID=1971887

As stated in the company's 2019 annual report published on 7 May 2020, preference dividends will continue to be deferred until there is a recovery in CPO prices and greater certainty as to the future. Accordingly, REA announces today that, there being no material change in the financial position of the company or greater economic certainty, the half yearly payment on the preference shares that falls due on 30 June 2020 will be deferred and that the half yearly payments on the preference shares that were due on 30 June 2019 and 31 December 2019 also continue to be deferred.


That's 13.5 pence per share that is now deferred ...

moorfield
Lemon Quarter
Posts: 2081
Joined: November 7th, 2016, 1:56 pm
Has thanked: 640 times
Been thanked: 627 times

Re: REA Holding Prefs

#346819

Postby moorfield » October 10th, 2020, 9:21 pm

While the prefs dividend is deferred REA's business continues to look grim. But I am starting to wonder whether the prefs are trading below liquidation value, and worth a top up...

Here's my analysis of the balance sheet (2020 interims).



I've stripped out goodwill, intangibles, and receivables from the net assets figure. In a notional liquidation of the company, that would leave net $164m to be distributed to 72m preference shares, or $2.28 (£1.74) per share, before the ordinary shareholders even get a look in. Write down those assets (excluding cash) by 20% and that falls to $0.82 (£0.63) per share. The prefs are trading at £0.56.

What am I missing?

Wizard
Lemon Half
Posts: 5048
Joined: November 7th, 2016, 8:22 am
Has thanked: 23 times
Been thanked: 901 times

Re: REA Holding Prefs

#346841

Postby Wizard » October 11th, 2020, 7:56 am

moorfield wrote:While the prefs dividend is deferred REA's business continues to look grim. But I am starting to wonder whether the prefs are trading below liquidation value, and worth a top up...

Here's my analysis of the balance sheet (2020 interims).



I've stripped out goodwill, intangibles, and receivables from the net assets figure. In a notional liquidation of the company, that would leave net $164m to be distributed to 72m preference shares, or $2.28 (£1.74) per share, before the ordinary shareholders even get a look in. Write down those assets (excluding cash) by 20% and that falls to $0.82 (£0.63) per share. The prefs are trading at £0.56.

What am I missing?

What isnthe basis for the valuation of those balance sheet items? Are the accounting principles aligned to real world 'fire sale' values? My guess is that they aren't for items such as plant and equipment.

moorfield
Lemon Quarter
Posts: 2081
Joined: November 7th, 2016, 1:56 pm
Has thanked: 640 times
Been thanked: 627 times

Re: REA Holding Prefs

#346907

Postby moorfield » October 11th, 2020, 12:15 pm

Wizard wrote:What isnthe basis for the valuation of those balance sheet items? Are the accounting principles aligned to real world 'fire sale' values? My guess is that they aren't for items such as plant and equipment.


Difficult to answer, but that's why I "stressed" the book values by 20%. From the report:

All property, plant and equipment other than plantings is carried at original cost less any accumulated depreciation ans any accumulated impairment losses.


Let's be harsher and strip out the inventories and biological assets (the palm kernels trees and oil).



That would leave $2.08 (£1.59) per share, and write down those property, land, interests assets again by 20% (or incur similar liquidation costs instead, say) falls to $0.75 (£0.57) per share. Whether that's remotely realistic or not is the question. The notes and loans are secured against property and land as far as I can see so presumably creditors would want to recoup as much as possible.

Perhaps the prefs market is pricing for a liquidation then, although the report also states:

The directors are satisfied that the group has sufficient resources to continue in operation for the foreseeable future, a period of not less than 12 months from the date of this report. Accordingly, they continue to adopt the going concern basis in preparing the consolidated financial statements.


But they would say that anyway, wouldn't they?

I think I have talked myself out of buying more for now...!

carnie
Posts: 4
Joined: November 4th, 2016, 11:42 pm

Re: REA Holding Prefs

#351066

Postby carnie » October 27th, 2020, 2:07 pm

The price on these seems to be up quite a bit today, I received a 66p quote to sell through ii.

I don't see any company announcements and the share price is not moving so am not sure why. Palm oil price has been performing better of late so I guess there maybe increasing hope of the pref dividend being re-instated?

I'll hold on for now.

Carnotaurus


Return to “Gilts and Bonds”

Who is online

Users browsing this forum: No registered users and 1 guest