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HIGHCROFT - Good Value; but also an interesting appt...

SKYSHIP
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HIGHCROFT - Good Value; but also an interesting appt...

#104352

Postby SKYSHIP » December 15th, 2017, 12:23 pm

An interesting RNS today from propco tiddler Highcroft (HCFT). Charles Butler - the former CEO of Market Tech (the £3bn propco which owns great chunks of Camden Market) has been appointed Chairman. May amount to nothing at all; but certainly a vote of confidence in HCFT & its Board.

https://uk.advfn.com/stock-market/londo ... e/76304659

I recently bought a few @ 880p; and was waiting for another offer at the same price; but on today's appointment I've decided to pay the full 900p for my balance.

The March Finals for the y/e Dec’17, should reveal a total dividend of 44p (41p) and an NAV of c1110p (1097p as at 30th Jun’17). So at 900p the yield = 4.9% and the discount = 18.9%.

Perhaps nothing exceptional; but if there is more to this appointment than immediately meets the eye, then there could be some good upside from here.

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Re: HIGHCROFT - Good Value; but also an interesting appt...

#104492

Postby flyer61 » December 16th, 2017, 11:09 am

SKYSHIP,

I took a look last night and it looks like a tidy 'little company'. If you viewed it as a bond like holding then you wouldn't go to far wrong. Controlling shareholder along with a small(ish) discount to NVA will probably keep me out. 20% - 25% discount for a company this size is small in my books.

Looking at the assets I couldn't see where your new chap could add that much extra value, but hope I am proved wrong!

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Re: HIGHCROFT - Good Value; but also an interesting appt...

#128391

Postby SKYSHIP » March 27th, 2018, 5:09 pm

HCFT announced truly superb figures last Friday. Sp has made some progress; but usually possible to trade inside the spread.

At 935p the yield = 4.95% and the NAV discount = 19.5%

Preliminary results for the year ended 31 December 2017
======================================================

KEY HIGHLIGHTS:

# 22.0% increase in gross property income to GBP4,765,000 (2016 GBP3,906,000)
# 16.8% increase in investment property valuation to GBP77,113,000 (2016 GBP65,997,000)
# Property acquisitions of GBP9,480,000 (net of costs) and disposal proceeds of GBP2,292,000
# 8.4% increase in net asset value per share to 1161p (2016 1071p)
# 57.5% increase in earnings per share to 132.3p (2016 84.0p)
# Medium term debt GBP19,400,000 (2016 GBP14,900,000); net gearing 29% (2016 21%)
# Cash and liquid equity investments GBP4,035,000 (2016 GBP5,838,000)
# 15.4% increase in final dividend to 30.0p per share (2016 26.0p per share)
# 12.8% increase in total dividend to 46.25p per share (2016 41.0p per share)

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Re: HIGHCROFT - Good Value; but also an interesting appt...

#139232

Postby ap8889 » May 15th, 2018, 6:32 pm

Thanks for flagging this one up Skyship. It certainly looks an interesting property proposition. I very much appreciate your efforts drawing attention to many sweet discounts over the years!

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Re: HIGHCROFT - Good Value; but also an interesting appt...

#140281

Postby SKYSHIP » May 21st, 2018, 10:22 am

ap8899 - thnx for that.

The more I read Highcroft's (HCFT) recent Prelims the better I like them. The warehousing strategy has obvious attractions, especially considering the Yield of 5.0% & the Discount of 20.7% at today's 920p.

As I've posted elsewhere, I think the only small negative is the one of scale. They have a M<Cap of only £47m and a free float of just half of that. The appt of Charles Butler last year might have been to provide some new thinking for growth without pre-emption. We'll see...

Incidentally; when have you ever seen a propco with ZERO voids? For HCFT this is the natural state of affairs and has been for the past 5yrs, perhaps even longer!

http://www.highcroftplc.com/uploads/fil ... 202017.pdf
===============================================================================

Property portfolio:

Under the guidance and leadership of Simon Gill we purchased two warehouses during the year which were financed by a combination of existing cashflow, recycled cash from a property sale and a new debt facility which in turn reduced the average cost of debt to 3.64% and left gearing at a modest 29%. At the year end the portfolio stood at 74% warehouses and retail warehouses with a small amount of residual residential and the remainder split between well let retail and offices.

Property rental growth of 22% for the year is the strongest performance over the last 5 years and with contracted rent at the year end being 21% up on the previous year end this shows the increase in rental income continuing into 2018.

We have stringent criteria for new tenant acceptance and at the year end all properties were fully let to a strong tenant base. Through a combination of stable income yields and active asset management I am pleased to report an 8.4% increase in net asset value and 11.9% return on equity for the year (2016 8.0%).

Dividend:

The company's interim dividend was increased by 8.3% and as a result of strong revenue growth, efficient use of debt and administration costs falling as a percentage of revenue we have increased the final dividend to 30.0p per share leading to a total dividend of 46.25p per share - an increase of 12.8%. Our stated strategy is to increase dividends in excess of inflation every year and I am pleased to say we have delivered an inflation busting 45.4% increase over the last 5 years.

Outlook:

Highcroft is well positioned with a high quality income producing portfolio. We go into 2018 with positive momentum gained in 2017 and well positioned to continue our portfolio growth. We are however in a very competitive landscape with continuing political uncertainty so we remain cautious and diligent in our approach in ensuring we select the right properties to deliver long term shareholder value.

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Re: HIGHCROFT - Good Value; but also an interesting appt...

#157173

Postby SKYSHIP » August 4th, 2018, 6:21 pm

The sp has been steady at 930p-970p ahead of the Interims expected next week - Thursday 9th August.

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Re: HIGHCROFT - Good Value; but also an interesting appt...

#157184

Postby ap8889 » August 4th, 2018, 7:47 pm

SKYSHIP wrote:The sp has been steady at 930p-970p ahead of the Interims expected next week - Thursday 9th August.


Are you expecting further progress Skyship?

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Re: HIGHCROFT - Good Value; but also an interesting appt...

#158432

Postby SKYSHIP » August 10th, 2018, 9:05 am

Well, I was expecting a slightly better NAV performance; but not such a good hike up in the dividend.

So, all looks good and at the improved 975p the discount is still 18%, whilst the prospective yield increases to 5.4% assuming
a 34.25p final (+14%).

The company has apparently always been conservative with valuations, which isn't untoward for a lock-away hold. Now
with the increasing yield, such an investment policy is rewarded with a reasonable return - so happy to HOLD.

Incidentally, I hold alongside EPIC, RGL & RLE for an average yield of 6.4%.


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