KPG - Kiwi Property Group Limited

[Beagle]

As far as I am aware the maximum you can buy back within a year is 5%. KPG will need every available dollar to assist with their massive expansion at Drury.
The market is telling you what its thinks of the huge outlay involved by sending these under $1. I think management are going into this without a clue in the world as to whether the Drury thing will be eps accretive or not. Do they have any experience at all with a development of this size ? It seems to me that the directors and management think its all about building wonderful new facilities for other stakeholders to enjoy in an environmentally sensitive way. What's in it in terms of earnings accretion or dilution seems completely irrelevant to them. Why ?

Good questions for the next shareholders meeting. What assurance can you give us that the Drury development will be eps accretive to shareholders ?
If you can't give us this assurance who are you serving and why are the owners of the business not being put first ?
If this is eps dilutive why not just stop being Magpie's collecting shiny new things and do a share buy-back instead ?
(Optional for extra impact) you could dress in black and white colours like a Magpie.

[Monarch]

As far as I am aware the maximum you can buy back within a year is 5%

Interesting, I did not know that. Thanks.

I think with such a (supposedly) obvious avenue for eps/nta accretion (buyback) they really need to detail their financial projections for Drury, more in depth info about the Sylvia park towers would be good as well as I was not very impressed with the info given for those either. Are these developments worth the risk? A lot of questions to be asked of this one... I'm deeply underwater with this one now and without some clear numbers from management I may just cut my losses.

[Beagle]

If it makes you feel any better I'm getting kicked in the head with my ARG shares too which closed at a 26% discount to NTA today.
I think these discounts, or at least part of them are not real and is the market front running an expectation that as the capitalisation rates the valuers use head up, the NTA will naturally decrease.

You are right to ask hard questions of KPG management though. Another good question might be Is the current years dividend of 5.7 cps sustainable if you do these new developments ?

[Baa_Baa]

When the whole markets sh1ts its pants, which it has done a few times in my lifetime, it's the time to not be pessimistic as fabulous asset accumulation opportunities are here, or not far away. If one doesn't like the company, then don't worry about it anymore, focus on what assets you're going to buy when the fan is finally hit, and not before.

[LaserEyeKiwi]

KPG has outperformed most of the listed NZ property trusts this year, but they have all been taken to the cleaners in the current environment. Trying to blame KPGs stock price action on something company specific is a fools errand.

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I’m extremely bullish on Drury, they picked up the land for pennies on the dollar and the value is already being realized now that permission has been granted for the development. KPG has ample funding available and a well paced timetable of developments with gearing well below target.

[Monarch]

Are you not bothered by the lack of transparency on their financial modelling? Surely they must have some idea what return to expect on these new investments. I think the Drury development has many of the same traits as Sylvia park (which I like) but I haven't found any real numbers for anything about it.

[LaserEyeKiwi]

Are you not bothered by the lack of transparency on their financial modelling? Surely they must have some idea what return to expect on these new investments. I think the Drury development has many of the same traits as Sylvia park (which I like) but I haven't found any real numbers for anything about it.

I would expect the properties they develop at Drury to achieve at minimum similar yields as their other developments, but the land cost component of the project will be much cheaper so will deliver above average returns overall.

Just 5 more trading days until earnings and we get some more data (they report on Monday 23rd May).

[LaserEyeKiwi]

Just a reminder that today is the last trading session before KPG reports on Monday morning.

[Sideshow Bob]

KPG builds momentum with strong FY22 annual result - NZX, New Zealand’s Exchange

- Net profit after tax: $224.3m (+$14.1%)
• Property fair value movement: +$120.5m (+3.5%)
• Net tangible assets per share: $1.45 (+9 cps)
• Net rental income: $187.1m (+7.8%)
• Operating profit before tax: $124.8m (+7.3%)
• Adjusted funds from operations: $100.4m (+12.3%)
• Gearing: 31.6% (FY21 31.2%)
• FY22 cash dividend: 5.60 cps (+8.7%)

[WAIKEN]

A great result One of the best gross div yields in the market
I predict the price will reach NTA once the European geopolitics settles into a predictable pattern devoid of nuclear threats