LSR results

[gbjbaanb]

Full year results for LSR are in:
http://www.londonstockexchange.com/exch ... 61581.html

Lost 1pps on selling off property, leaving them with a NAV of 43p. Now as the current SP is 31p, what am I missing, or is this the easiest 30% gain when they sell off the rest of their portfolio in the new year?
(and I can't see them having much problem doing that considering the number of new REITs that have popped up looking to buy)

[brightncheerful]

"During the year sales were completed on a further 142 properties at a combined gross sale price of £19.29 million, which was 1.9% under the aggregate of the valuations at the time the properties went under offer. Transaction costs for the sales were 4.7% of the prices achieved, reflecting the higher frictional costs of selling smaller lots. As a result, the net loss on sales after transaction costs was 6.6%. "

With the remaining properties having to be sold piecemeal (as distinct from a single portfolio), I should think that a combination of the below valuation plus transaction costs is likely to result in a net loss. The sp is probably up with events?

I wouldn't have thought their properties of particular interest except in the context of having been over-worked and with nothing to go for! The auction market isn't short of the sort of stock for which there's little or no investor appetite. I'd expect the leading auctioneers to be only interested in taking on the task if the reserves are rock-bottom.

[gbjbaanb]

"During the year sales were completed on a further 142 properties at a combined gross sale price of £19.29 million, which was 1.9% under the aggregate of the valuations at the time the properties went under offer. Transaction costs for the sales were 4.7% of the prices achieved, reflecting the higher frictional costs of selling smaller lots. As a result, the net loss on sales after transaction costs was 6.6%. "

With the remaining properties having to be sold piecemeal (as distinct from a single portfolio), I should think that a combination of the below valuation plus transaction costs is likely to result in a net loss. The sp is probably up with events?

I wouldn't have thought their properties of particular interest except in the context of having been over-worked and with nothing to go for! The auction market isn't short of the sort of stock for which there's little or no investor appetite. I'd expect the leading auctioneers to be only interested in taking on the task if the reserves are rock-bottom.

IIRC from their disposal roadmap, they have been piecemeal selling off the "2nd rate" properties that were not the best, untenanted, not in the best of locations etc, so getting 1.9% below market value doesn't seem so bad at all. They've kept the best for the end, intending to sell them all off in one go if they can get a buyer, or at auction over the rest of 2018 otherwise. I thought with all the REITs that have popped up over the last year all with lots of cash to burn, they have a fair chance of off-loading them all quite quickly.

Even with a 6.6% loss if they sold the lot in the same way, that's still only 2p, so the NAV would end up as 39p - still a 30% premium. I imagine the sp is sitting low because its selling everything off and so not attracting attention, and also selling properties off at a bit of a discount so doesn't look like a peach at all.

[SKYSHIP]

The Statement suggests that a large portfolio sale of the remaining stock is not currently on the cards; however values are holding up well, LTV well down and borrowing expected to be cleared by mid'18.

The best of the statement is the inference that the portfolio is now of a far better quality than those sold in 2017 - average lot size now at c£320k v. the average of the 157 sales in 2017 at just £135k.

It was a deliberate policy to clear out the dross; and in 2017 they did that...and some. Sales were ahead of target.

So, with liquidation next year, one has to assess the sp of 31.5p versus what upside?

Well, take the current NAV at 42p.

# subtract 2p for sale discounts
# subtract 1p for sale costs
# subtract 1p for admin/liqdn costs
# subtract 1p for contingencies

PAYOUT - c37p....though possibly with a little annual income upside.

I believe that possibly to be too conservative; but the upside of c17% in 12months is certainly sufficient to make me HOLD; and possibly ADD upon any intra-day weakness.

The commercial auctions start up again in February so there will be constant news of disposals from the auction sales; and perhaps occasional news of private treaty sales. This drip, drip, drip of better news will gradually reduce the NAV discount.

One to add to your monitor if you don't already hold

[gbjbaanb]

The roadmap for disposal was always about saving the best for last.

Early 2018:
The Company will be left with a 'core' portfolio of approximately £55 million (based on current valuations), comprising 200 of the larger and better-quality assets in a tighter geographic concentration. Furthermore, time away from the market will allow us to reposition the portfolio and undertake asset management initiatives at the individual property level in order to achieve maximum value.

In early 2018 the portfolio will be marketed as a whole for a limited period, as the Board believes that this will be the optimum disposal route (bearing in mind that the revised nature of the portfolio should make it easier for a purchaser to raise finance against it).

which pretty much reflects everything that is left, their stage 3 is more a contingency of getting rid of them if they cannot find a buyer. If they can find a buyer, then the costs involved will be less than that required for selling by auction.

either way, I'm glad you agree its got a fair bit of upside. Hopefully they'll get rid of them all in early 2018 and I can bank it all.