LXB Retail Properties

Drp8713

Does anybody else hold this share?


I think I am getting a bit more used to reading financial results now, but this one seems a bit too good to be true for a defensive low volatility holding so I want to know that I am not missing anything.


Its currently my direct property exposure and is 5.7% of my portfolio.


Link http://www.lxbretailproperties.com/news/


From my reading of it, current share price is £1.42, dividend is going to be £0.45 on 9th July, effectively a yield of over 30%.


So you would think that the share price would be in for a large future drop when and after £82m goes back to shareholders, however in the report on page 19 it says:


"Shareholders may find it helpful to understand that the Group’s current internal appraisals are suggesting that over time there is a further £75.8m of potential unrealised NAV in the investment portfolio".


Now obviously they may not deliver that (although they have been pretty consistent at growing the NAV thus far) and there is also the matter of when it will be realised. But will likely be early 2017 if all goes to plan based on the estimated completion dates on page 18.

So, low volatility, sensible management, lots of cash, always growing the share price and NAV to back it up.


Thoughts?

masonic

It strikes me as a very focused option for your entire direct property exposure - with a portfolio of a dozen or so out-of-town shopping centres at various stages of development and reliant on a small number of anchor tenants across the portfolio (particularly M&S). So I don't know how well this would fare if the retail sector came under pressure. Having said that, it's been tipped a couple of times by IC and looks on the face of it to have fairly good prospects at least in the short term.

Thrugelmir

Investors Chronicle reported on LXB yesterday.

"Half-year results from LXB Retail Properties (LXB) gave some indication of the value locked into its portfolio of retail assets. But crystallising the potential gains depends entirely on a continuation vote due to be taken at the company's annual meeting on 27 May.

LXB has been extremely diligent in highlighting the value that could be unlocked if there is a yes vote for continuation. Some of this value has only recently become clear; the sale of its Biggleswade investment for an initial £58.5m came after the period-end. A further £10.2m was due to be paid this month, along with around £11.3m on practical completion of the development, expected in March 2016. As a result of this, LXB is proposing to return £82.6m or 45p a share though a special dividend, subject to approval at an emergency meeting (EGM) to be held on the same day as the annual meeting.

The value of the portfolio was boosted by a £12.1m uplift, although accounting rules mean that early-stage valuations on undeveloped sites are calculated by deducting upfront costs associated with the development and omitting any uplift that would come with the start of rental income. LXB maintains that the end-value of its development projects is higher than the current valuation.

Since the half-year end, contracts have been exchanged for the £70m sale of its Rushden Lakes scheme, with completion expected in early 2016.

Ahead of these figures broker Stifel was forecasting adjusted net asset value of 164p a share at the September year-end."

http://www.investorschronicle.co.uk/2015/05/13/tips-and-ideas/share-tips/lxb-s-bumper-dividend-MfqPkh0cyBnoJ3vvS8mSrK/article.html

Drp8713

Well i also hold TR property which together with LXB gives me around 10% in property.

TR is 93% property share but is diversified across different types of property and accross Europe.

i think LXB should have no problems with the continuation vote now, but as you say it does feel a bit short term. Returning a third of a companies value is a good way to lock in the returns but i guess if it was going to be about longer term it should be reinvesting at least some of that.

doe808

Good, experienced management team. Would have no issue holding myself, if I was looking to add some retail property exposure.