August capital limited

[baller18]

Has anyone followed this company at all?
Most of their properties are tenanted by big names, such as, asb, countdown, bunmings and etc.
Value on the properties alone excluding returns is at 100mil, market cap is currently 67 mil, providing a 5% divi.
Do ppl see value in this?

[777]

Do you mean Augusta?

[baller18]

Do you mean Augusta?
Yes triple 7, augusta, my bad!

[peat]

beware the Francis touch.

[noodles]

beware the Francis touch.
He has a reputation?

[peat]

his Dad was director of Chase Corp.

In case you've never heard of them...

From Wikipedia
"Launching itself as a publicly listed company in April 1983, Chase Corp's share price rose to a high of $10.40 by June 1987 with an estimated value of NZ$3.6 billion.

On 4 July 1989, the NZ Government appointed statutory managers to run the NZ property interests of Chase Corp."

[777]

There was an article about the company in yesterday's Sunday Star Times.

[bohemian]

Google Brian Gaynor's opinion on property syndicates. There are much better investments.

[BlackCross]

Augusta's latest property syndicate offers relatively attractive returns but investors should think carefully about its upfront costs.http://www.interest.co.nz/property/83990/augustas-latest-property-syndicate-offers-relatively-attractive-returns-investors

[Beagle]

Deal Off. https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12320030

MET next ?

[trader_jackson]

Should really fall back down to NTA (if not lower)... bit puzzling why it is at a huge premium during these times.

[traineeinvestor]

Should really fall back down to NTA (if not lower)... bit puzzling why it is at a huge premium during these times.

In this market anything's possible (if not probable), but IIRC Augusta has been in the process of transforming to a more "asset light" business model which makes NTA based valuations a little less relevant than for most the other listed property companies.

[tim23]

They typically own 10% of new offerings, latest one delayed of course...

[Balance]

https://www.nzx.com/announcements/352659

Ouch!

30c per share write down and a 1:1.9 rights issue at 50c.

[traineeinvestor]

https://www.nzx.com/announcements/352659

Ouch!

30c per share write down and a 1:1.9 rights issue at 50c.

The presentation was an interesting read. Interesting that Centuria could end up with 24.9% - does NZ have a creeper provision in its Takeovers Code so they can slowly move to a controlling/majority position?

Small nit picking point: I think it says it's being done at $0.55?

[Dassets]

Normally the limit for a shareholding is 19.99% before a takeover is required. There has been a relaxation to 24.99% due to temporary COVID relief. You cannot creep beyond that.

[dibble]

Normally the limit for a shareholding is 19.99% before a takeover is required. There has been a relaxation to 24.99% due to temporary COVID relief. You cannot creep beyond that.

Not sure all that will matter in due course, if Centuria offered $2, dumped their holding and are sniffing around again at under $1, having done all the due diligence already, they are quite likely launch a new takeover, presumably at much less than $2

[dibble]

Should really fall back down to NTA (if not lower)... bit puzzling why it is at a huge premium during these times.

Probably not the best way to value this puppy, material and growing revenue chunk now from syndicate mgmt fees. Anyone who's been thru a brochure will be aware of the risk of rent reverting to "market rates" somewhere in the ensuing 5 yrs (probably down for near future) yet mgmt fees ALWAYS increase by set % (standard practice as far as i know). So mum and dad investors supporting the dividend.

[Balance]

Small nit picking point: I think it says it's being done at $0.55?

You are right - thanks for correction.

Interest to note for those who have invested for dividends and yield :

1. AUG has paid out 16.375c in dividends (dps) since NPT became Augusta.

2. AUG is now requiring holders with the 1:1.9 rights issue to front up with 28.95 cps to plug the $27m hole and pay down debt!

Net net - holders are down 12.575 cps in 3 years!

[whatsup]

When you read the recent announcements regarding cancelled deals, one would have to think , have they been reckless with the purchasing or intended purchases over the last year or there abouts?

[Balance]

When you read the recent announcements regarding cancelled deals, one would have to think , have they been reckless with the purchasing or intended purchases over the last year or there abouts?

The more deals, the more fees.

That’s their modus operandi so hardly surprising.

[whatsup]

The more deals, the more fees.

That’s their modus operandi so hardly surprising.

Agree but who pays for the forfeited deposits , millions and millions ?

[Balance]

Agree but who pays for the forfeited deposits , millions and millions ?

Presumably Augusta.

Kinda like underwriting a deal which failed to go ahead.

[winner69]

Presumably Augusta.

Kinda like underwriting a deal which failed to go ahead.

They owned up to forfeiting deposits

[winner69]

Balance - is that guy Francis still running the place

[whatsup]

Balance - is that guy Francis still running the place

Yes, son of ... ( who said Chase ? )

[peat]

typical of an interesting* company to use a temporary covid19 law relaxation to progress their interests.

so even if you take up your full entitlement you will be 20% diluted? Sounds annoying. Still , raisin' cash is good.

take care out there.




*interesting = you know what I mean

[thegreatestben]

I've got ~11500 shares, am I better to purchase my entitlement or not? I'm in for .88c a share, does this mean I'm diluted 37.5% if I don't buy and if I do buy I need spend ~3k and become 20% diluted?

[traineeinvestor]

I've got ~11500 shares, am I better to purchase my entitlement or not? I'm in for .88c a share, does this mean I'm diluted 37.5% if I don't buy and if I do buy I need spend ~3k and become 20% diluted?

Leaving aside the point that capital raisings other than by way of prorata rights issues are always dilutive and generally not in the best interests of shareholders, if I still held shares, I would take up my entitlement to the max so long as the shares are trading reasonably above the subscription price for the new shares. The capital raising is gong to happen anyway so you might as well get whatever benefit you can from it.

Separate point. You mentioned the price you paid for your existing shares. With respect, I'd suggest that what an investor paid for something should not be a relevant factor in deciding whether or not to buy more or to sell. Your purchase price has no bearing on the current or future value of the shares. And, yes, even though I know this I still find it really hard to recognise my mistakes and sell shares in companies that disappoint.

Disclosure: former shareholder

[thegreatestben]

Thanks for your reply! RE: price, I wasn't sure what's relevant or not and thought it might be comparable to the .55c offer.

I did note that the SP averaged .76 today, which made me think it's a reasonable move to accept entitlement. Perhaps a good way to learn in this case is to experience and see what falls out.

[traineeinvestor]

New takeover offer - at about $1.00 which is half the previous offer. Mostly scrip.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/AUG/354659/324454.pdf

Disclosure: not held

[thegreatestben]

Good for me with an avg. buy of 76c but maybe not for many who were in before Covid?

[traineeinvestor]

To correct my earlier post - it's a "takeover notice" not a "takeover offer."

"The takeover notice is not a takeover offer. If Centuria proceeds to make a takeover offer, it must do so within the period that begins 14 days and ends 30 days after today. Shareholders should be aware that Centuria is not legally obliged to make an offer during that period and, if it does not do so, Centuria’s takeover notice will lapse."

With the shares trading at $0.92 against a formal offer price of $1.00 (per takeover notice) or $0.95 (based on CNI's last traded share price on Friday), the market seems to be expecting that the offer will proceed.

[thegreatestben]

Do they need 50.1% support to go ahead? The document I'm looking at suggests between centuria and the men at the top have over 40% holding. That doesn't leave much to chance?

[traineeinvestor]

Do they need 50.1% support to go ahead? The document I'm looking at suggests between centuria and the men at the top have over 40% holding. That doesn't leave much to chance?

The headline condition is Centuria reaching 90% of total shares in issue. They can waive that subject to getting to at least 50.1%.

There is also a laundry list of other conditions including "no material adverse change"

[Tradernoob]

Anyone want to share their thoughts on the latest announcement with Centuria?

[thegreatestben]

An extra 2 cents, seems like it's a done deal.
Share price has bumped accordingly.

Anyone have any thoughts on the value of the Centuria shares being offered?

[dibble]

An extra 2 cents, seems like it's a done deal.
Share price has bumped accordingly.

Anyone have any thoughts on the value of the Centuria shares being offered?

Not easy, need to track both CNI share price (moving around a bit lately) and the exchange rate (remember to choose the most relevant exchange rate ie the one you have access to if you did it on your own) on your spreadsheet so offer value (originally estimated at $1NZ) is far from static.

[traineeinvestor]

Underwhelmed.

CNI shares have slipped from AUD1.91 when the offer was priced (per announcement and offer document) to AUD1.75 today. They have just gone ex a 5.2cent fully franked dividend (which means it will be about 6 months to wait until the next divided). Also note that NZ shareholders will not benefit from franking credits on CNI's future dividends. The ASX 200 has risen modestly during that time.

The value of the offer is: (AUD1.75 * .392 *1.07) + NZD0.22 = NZD0.95.3.

That said, CNI now owns or has acceptances for a total of 63.9% of AUG's issued capital so I can't imagine they will be under any pressure to raise the offer to get to 100%.