#660492
Postby SKYSHIP » April 20th, 2024, 8:48 am
I’m assuming a positive vote for a wind-down, which in my mind is pretty near certaint, especially as only a 50% vote required.
Accordingly been running some numbers:
# Q4'23 NAV = 78.5p
# Disc. by, say, 2% for Q1'24 NAV = 76.9p
# Disc by, say, 7% for portfolio liquidation = 71.5p
Add back reducing EPRA earnings over the liquidation timetable, say, 3.5p (pretty conservative figure that!)
# That would deliver 75p in, say 2yrs; and that would deliver a GRY from the current 49.3p of 23.33% pa
IMO the worst possible outcome might be 70p in 2.5yrs for a GRY of a still acceptable 15% pa
Now, one has to note what the BoD stated c1month ago when trying to persuade shareholders to accept the CREI bid:
"The API Board expects that the net disposal values that would be realised in a Managed Wind-Down would be lower than those achievable on carefully selected individual assets marketed by API in the ordinary course of business - such as API's current programme of disposals to reduce floating rate debt. The API Board's expectations have the benefit of input from API's investment manager and API's independent advisers."
But IMO that was a load of fluff. Perhaps some truth in it; but my 7% discount, ie c£20m write off from accelerated sales, should be quite enough for the highly competent investment manager Jason Baggaley to improve upon!
As to the effect of early pay-outs from likely compulsory redemptions; say:
# 35% 31/03/25
# 25% 30/09/25
# 37% 30/06/26
# 3% 30/09/26
That would deliver an average of cOct'25. EPS slightly less, so say total pay-out 74p rather than 75p. GRY would be a startling 29.2%!
All guesswork; but there is certainly considerable upside to play for; which makes a vote for a wind-down an obvious choice.
Makes API a very attractive proposition down at these levels.
Interested to read others' sliderule/back-of-envelope meanderings over the weekend...
