KPG - Kiwi Property Group Limited

[Waltzing]

"KPG have the key retail sites. They have the best malls with international tenants."

exactly and therefore the price is just silly and cheap? 10 year or no 10 year..

[Waltzing]

back to 1.20's ... got to be the biggest property stock bargin on the market... almost worth backing up a truck and betting the farm...surely..10 year even at 2% the value of these sites is just not reflected in this price..

10 year is at 1.3%

[Habits]

back to 1.20's ... got to be the biggest property stock bargin on the market... almost worth backing up a truck and betting the farm...surely..10 year even at 2% the value of these sites is just not reflected in this price..

10 year is at 1.3%

SP is headed to trendline price 118 next week before next charge up to 145. I will bet the farm on that

[Baa_Baa]

SP is headed to trendline price 118 next week before next charge up to 145. I will bet the farm on that

Probably right, but my trailer load is in the bottom drawer and deleted from the daily watch list. Along with my other long holds. It’ll do just fine while the property market is so supportive.

[Waltzing]

"Probably right, but my trailer load is in the bottom drawer "

already! some will have loaded up last april and have gone from these sites laughing all the way to the bank..

still a very very good buy at 1.18 and if it goes lower on silly days because the T10 goes higher.

If that 1,9T is passed wonder what that will do to the bond market...

" I will bet the farm on that"

well was going to comment same but thought it was going a bit far..

Betting the whole farm? diary prices are forecast to be up and that farm complete with debt has just brought some relief to the reserve bank.

[Beagle]

Probably not what you want to read but here goes mate...

I don't like the fact that despite reasonable gearing and a reasonable result for FY20 they canned the final dividend based on the fact that a big write-down happened in the value of their assets.

To me this beggars belief for an income stock as income is income and an unrealized write-down in assets does not affect income nor should it cause a dividend to be completly stopped.

Did they pay an extra dividend in the last year in which a big capital gain was made on their properties ? No of course not, that would be paying out unrealized profit but they are happy to take dividends away from investors when there's a write down even though its an unrealized write-down, go figure ? There's something morally wrong going on here.

So what are they going to do about it for the interim dividend ? Will they make this loss of income up for investors if there is a valuation recovery ? No of course not again. They have said they intend to pay out 90-100% of profit for the interim FY21 result. All good so far you might argue but wait there is more...

From their announcement on 22/06/20
"The interim dividend for the financial year ending 31 March 2021 would be payable in December 2020 and is subject to the absence of material adverse effects (such as disruptions to business activity) or other unforeseen circumstances, including further COVID-19 related lockdowns or significant decreases in asset values or income".

There's something fundamentally wrong with directors that don't understand that investors in an income stock expect that income to be paid out at a certain percentage of income, say 85-90% regardless of unrealized capital movements one way or the other in the capital value of the properties but at the same time they're happy to deprive investors of income they're happy to contemporaneously go on to expend vast resources substantially expanding their mall size in the middle of a serious economic crisis. Hmmm

Investors need to decide for themselves if the directors are really looking after the best interests of investors or themselves ? I am not impressed.

I note ARG seem to have a completely different approach to maintaining dividends and are on a much better yield and are better diversified by property type.

I'm struggling to reconcile this cautious outlook here https://www.nzx.com/announcements/351283 in April, cancellation of the dividend and deferral of non essential capex and other measures with their current almost gung-ho build it and they will come approach http://nzx-prod-s7fsd7f98s.s3-websit...590/330530.pdf

Sure it would be fair to say they had already committed to the Galleria expansion before Covid hit but its not a good look and on the face of it their expansion and the previous statement of caution is incongruent.

Okay to spend $277 million but can't afford to pay the final dividend ?
Stop the dividend when there's unrealized write down in assets but no extra in previous years when there was massive increases in unrealized gains ?
Major expansion at Sylvia park, so they think the risk from Covid has now passed ?
Future dividend(s) contingent on no major further write-downs or Covid effects... For me that's a deal breaker because it tells me they have no contrition for canceling the last dividend or sympathy for investors need for income.

To me the directors seem to have forgotten why people invest in REIT's...for reliable dividends. Very poor execution of their primary goal to be a reliable investment for shareholders in my opinion. No wonder its at a discount to NTA and very probably deserves to be. If there's another outbreak of Covid in N.Z. or should that read "when there's another outbreak of Covid" malls are the first place people stop going too.

I see plenty of risk here and well below average governance standards and execution of their purpose for existence.

.

Repost of Sep 2020 posts. I am not going to bet the farm or anything like it and the above is why. I'm still a bit grumpy about the above so I will stick with just a very modest allocation to this one.

Pretty sure I read the 10 year Govt stock yield hit 1.5% today.

[Waltzing]

Much discussion on inflation returning but Yellen seems to think major damage without the 1.9T.

we sold KIP some time ago but we think with all the new developments they will be forced to pay something soon if profits return.

july 2019 10 year was over 3 and stock price was 40 cents above.

If they continue down the no payment path we think they will come under pressure.

but certainly someone needs to ask some questions at the next AGM.

NTA alone values this stock well above current price surely even if dividend was suspended.

When no inflation or little comes in 6 to 12 months and the FED does nothing to rates as they want to train to run hot for longer they wont be lifting rates..

Those other commercial property stock they may well get a second wind later in the year.

Definitely some good 1 year options here and time for them to make good on the dividend. It could be a hated share price rally at some point. There may also be an element of arrogance has crept into the management team knowing they have the golden site in south auckland.

Land in south auckland will be a premium going forward and hard to find for either housing or commercial property.

[Scrunch]

I think we will have a dividend coming soon, but I'd like KPG to limit dividends to the size that can be fully imputed. Beyond this level you are starting to destroy shareholder value as 28% of the dividend paid goes to the taxman. Rather than do this money could be returned to shareholders by spend the same amount buying back some existing shares so EPS goes up (particularly when trading below NTA) and shareholders wishing to sell have a buyer.

If shareholders want more cash back, just open a sharesies account, transfer in some KPG shares and do regular little sells to get the cash they want. Now they are only losing at most 0.5% in brokerage, not the 28% of the value lost through non imputed dividends.

An exception being when your sector is exposed to beneficial tax rules meaning you as a company pay basically no company tax. Paying an unimputed dividend in this instance may be sensible because it helps decrease the risk of unfavourable tax changes being made. I'm thinking here of the property companies looking after elderly citizens.

[Scrunch]

...Duplicate

[Habits]

"even if dividend was suspended....time for them to make good on the dividend"

Did they re-start dividends after the sept HY with promise of higher after FY. Would like to see a catchup special div too