FKP Time to Buy or Not?

[Joshuatree]

Hi i see FKP have done a large 6 for 7 @ 20c capital raising to raise $208 million issuing over 1 billion shares inst component $154 million, huge dilution share price at anew low or thereabouts@24c just 4c above. Proceeds to repay debt etc.. New securities trade tomorrow 28th sep..Will it drop to 20c?

They are the largest owner/ operator of retirement villages in Aus and NZ with13,726 units (Ryman 3274 according to presentation). Also apartment projects ,(not retirement),Land projects, commercial and industrial .NTA is 58c. Asset sales required. .Wilbow debt facility drawn to $123 million,to be repaid june 2013. Its all too complicated for me to get a handle on,and who knows where prop valns are going. Anyone been following this story with an informed opinion? cheers

[Stranger_Danger]

I don't follow FKP directly, but I have been taking a look at Port Bouvard (PBD) who have FKP as their main shareholder. I've also been studying some other listed property developers.

There is a chance some of the FKP raising will end up in PBD.

All I will say is I am NOT developing a feeling of positivity about the AU property market over the next year or two, especially when it comes to talking to people in the industry.

P.S Mentioning PBD is not a recommendation. PBD is extremely cheap if it doesn't go broke but my current instinct is it will either go broke or be taken out for very little by FKP.

[Joshuatree]

Thanks SD Really appreciate your sharing whats happening on the ground. Caution warranted. cheers

[percy]

I can't help with FKP,in fact I thought KW may have offered advice as KW seens to be up with this sector.
I brought INA after reading KW's posts.[was IEF] .Has been a very good investment.Paying a divie,yet trading at a discount to NTA.Internalised management contract and now a lot better focused company.

[Joshuatree]

Thanks guys.Never heard of INA will have a squizz. Agree re RYM ,have plenty.Have owned AEU and wish i still did ,and CMW which also came thru GFC well. It may have done a cap raise more recently.Cheers

[Joshuatree]

I have bought some FKP
Gearing is now re 33%
NTA re 58c s/p re 21c
Morningstar est conservative div of 1.8c in 2013 re 8.4%
Even non core asset sales are fetching re 90% of NTA
Possible takeover from stock land etc
looks to be in a good risk reward space at thuis price
I havnt verified all the above info.

[Joshuatree]

ERRRRR, annonucement today ,no divi for 2013 and 1 or 7 consolidation which hopefully will be less manipulation and more bigger buyers , inst etc.Good announcement re leasing out a big space in Gasworks and cancelling any sale to Cromwell who were miffed.. A sell off by div seeking holders. Disapointing re the div.

[Joshuatree]

FKP owns re 23% of METLIFECARE on NZX valued @ re $A 103 million. FKP mkt cap reA$ 373million.S/P still weak.Bought a few more.

[Joshuatree]

Great bounce from re $1.19 to $1.60's. Real nta re $4 plus. Will consider lightening re $2 or when the breakup comes. Great to be in the black after initially seeing my investment fall further. Anyone else time it better than me (easy:)re $1.40.? DYOR

[Joshuatree]

Up another10.5c today to $1.70's

[Pumice]

FKP owns 85% of FGP (Forest Place Group). I assume that’s their retirement division. I have been watching for a while, they look ok and have been tracking upwards, but they seem to be fairly illiquid. Worth a look.

[Joshuatree]

Thanks Pumice but my mission is to get value from FKP in a breakup,M/A happening or expectation of same so sticking to that risk/reward strat which is on track atmit (at this moment in time:). One would think FGP is one of the jewels, so see where youre coming from. cheers

[Joshuatree]

1/02/2013 AFR " FKP prop group is close to finalizing plans to list a record $825 million retirement vehicle on the ASX. within 6 months." FKP (Manager) owns 22% of RVG which is in breach of its loan covenants and it has until the end of next month to restructure a $186 million loan facility or pay down a substantial chunk of the outstanding debt.

Filched from James 123(thanks) on H/C ...Pro forma NTA of FKP is $4.06 of which retirement component is $1.96 with 20-30% disc suggesting a price of $1.37- $1.57 just for retirement component. Applying a similar conservative discount to the other remaining component NTA of $2.10 ... various props shows $1.47-$1.68 = tot of $2.84 to $3.25 with this upper end almost double current share price. I got in @ $1.40 think theres alot more to come.

HOOP if it fits would a chart reading be ok?

PS Stockland waiting in the shadows to pounce also a fillip.

[Joshuatree]

With the sale of the final tranche of PBD shares giving an overall profit of $3 million( i havnt verified this atp) and Metlife care applying for listing on ASX, things are looking up for FKP with the share price responding recently. FKP holds re 38% of MET. Transformation to a prop retirement co maybe soon ish. I sold re 25% back @ $1.70.

[Joshuatree]

Sale of 399 lonsdale st for $31 . 5 million a 2% premium to book value

sale of Ind lots in Mackay for $25 million
Funds from these used to " repay debt as FKP EVOLVES INTO A PURE RETIREMENT GROUP".

Sales of Milton up to 221 units now( of 309) have been PRESOLD, pre GFC ebit margins re 27%

Two new finance facilities A $65 mill 3 year syndicated for gasometer (completed in july 2013 and for sale)

$108.5 mill 3 year synd facility for Milton development

Albion now re 50% sold

Also FKP annouced a furthur buyback of $9 million of its convertible notes in addition to the $11.3 mill that have been bought back since june.

S/P lifting and lots of positive things happening here, transtion phase looks strong and in motion.

[Joshuatree]

FKP s/p Up 6.8% to $1.64 today and stock land continues to sell FKP shares, holdings down from 14.3% to 11.6 %.

[Joshuatree]

15 oct . FKP to sell 50% int in the Milton for $28 million and part of Cook estate for $18 million. These are above book value. "these divestments are another progression in our strategy to become a PURE RETIREMENT GROUP". Proceeds used to repay group debt.

s/p re $1.60 , NTA $3.53 ( you need to DYOR on this fig)

[Joshuatree]

RVG re 22% owned by FKP (check this) has appointed Goldman sachs to sell its 38% share in metlifecare. This will reduce debt. Shares out of escrow re 23rd nov.

[Joshuatree]

Good response in s/p today

[Joshuatree]

Broken thru $2, heres hoping she holds

[Joshuatree]

So on sales to date FKP is getting at or above NTA." Metlifecare has just been sold @106% of NTA.. Assuming that we get NTA for our other assets then its increasingly certain thatwe will get to our NTA of around $3.50 ish."

Alot of upside left with current s/p $2.00

[samskills]

Hi joshuatree, what were your thoughts on the entitlement offer? regards

[Joshuatree]

Will put them in a stronger position re selling unwanted assets at nta or more., eliminate short term debt and interest saved. Cynics question mulphas influence here. The momentum is there for the transformation to a retirement home vehicle. I think i will take up all my rights (my av entry re $1.30)but still absorbing info and thoughts of others better at joining dots than me. Am aware of past track record (not good) but think we are a diff proposition now. So far so good in my time frame:)

[Joshuatree]

Stockland selling their stake in FKP with a floor price of $1.78 so int to see how much higher it is bid..TERP $1.77. Momentum continues:)

[baller18]

Stockland selling their stake in FKP with a floor price of $1.78 so int to see how much higher it is bid..TERP $1.77. Momentum continues:)
Good time to buy??

[Joshuatree]

Depends on your margin of safety etc. My entry was re $1.30 and i willprob take up all my rights. For the moment cant remember what the new NTA will be (my mem not good) , found it from $3.73 to $2.74 (check this) the margin and upside are good. a lot of moving parts at play and keen to hang in until this becomes a retirement vehicle with new name Aeveo ?. Be int to see how much stocklands stake goes for, im thinking it will be in demand.

[Joshuatree]

For the hordes who have bought in to FKP; wakeup , hee.. Name change to Aveo funds management has been actioned. New ticker from 6th nov (my B/day:) is AOG. BTW debt reducing to re 19% after cap raise.

[Joshuatree]

AOG (FKP) having a strong day re $1.99 on good vol. Momentum continues. Stockland gone Perpetual increasing holding reg , now to 11.63%. Another sale of an asset , although small way above NTA. Ticker sposed to changeover on the 1oth but not yet.

[Joshuatree]

Another strong day for AOG(FKP) up to $2.19 plus with all my rights coming @$1.30; heading for a double bagger and a great niche in a growth area , Retirement.Sorry KW that you had a bad trip here but its looking like my timing has worked out on this one;so far:).