ARG - Argosy Property.

[winner69]

Did ARG go ex divie or something for the dip in its share price

Only a few weeks ago was 124 …..115 now is a bit brutal

[Onemootpoint]

Ex div is 12 Sep I believe.

[Soolaimon]

The political noise at the moment is affecting property shares big time, could be buying oppertunity, who knows?

[winner69]

Jeez, Snoopy pn another thread suggesting ARG share price could go under a buck ....if this or that happened

I'd buy at under a buck ...hoping not to lose in doing so

[Snoopy]

Jeez, Snoopy pn another thread suggesting ARG share price could go under a buck ....if this or that happened

I'd buy at under a buck ...hoping not to lose in doing so

Actually I agreed with Bob50 that ARG could go under a buck 'all things continuing to be equal'. But then I carefully pointed out that I did not expect 'all things to continue to be equal' and other factors influencing the share price would most likely come into the valuation equation.

SNOOPY

[winner69]

Actually I agreed with Bob50 that ARG could go under a buck 'all things continuing to be equal'. But then I carefully pointed out that I did not expect 'all things to continue to be equal' and other factors influencing the share price would most likely come into the valuation equation.

SNOOPY

OK..you should know by now my comprehension not the best lol

ARG did spend 2014 to 2018 hovering around $1 plus or minus a bit ……and interest rates weren’t at ridiculously low level during that period

So maybe a buck is on the cards again

[winner69]

Morningstar data shows total shareholder returns (dividend reinvested etc) over last 8.5 years has been about 3.5% pa ……$1,000 invested May 2015 now worth $1,300

May15/ May 16 share price ranged from $1.05 to $1.18

Doesn’t seem right

[ronaldson]

ARG gone all weak at the knees today, no doubt on the back of Nationals tax policy release which signals an intention to close out the "tax break" of depreciation deductibility on commercial and industrial buildings.

This has become something of a political football in recent times, having existed as an appropriate accounting methodology for an extended period of time before being removed (under National?) earlier in this millennium, then reinstated by Labour from 1 April 2020 as part of measures to provide relief to businesses during the Covid-19 pandemic. So I guess now likely to be gone from 1 April 2024.

I looked at ARG's Financial Statements for y/e 31 March 2023 to try to establish the potential impact. I am not accounting qualified, but it seemed to me that the impact on the tax liability for that year, given the 28% corporate tax rate, was a reduction of $9.6m. So quite a hit to the bottom line from FY25 if a deductibility for depreciation is removed. If anybody sees the implication/my figure differently, please post.

Snoopy on the Listed Property Trusts thread calculates, correctly in my view, that the hit to the bottom line from removal of depreciation is 1.13cps from 1 April 2024, based upon the depreciation incurred/applied for FY23.

The dividend guideline for FY24 is 6.65cps and AFFO per share for FY23 was only 6.86c so the payout ratio to AFFO is very high. A 1.13cps reduction in AFFO is a proportionately serious outcome for holders, indicating a high probability of a dividend reduction beginning in FY25. This would significantly depress the share price further, particularly if interest rates remain elevated, as they surely will in that timeframe. And that is without factoring in the extra interest costs yet to fully flow through to the debt carried by ARG.

With an NTA of $1.58cps the Board would do well to explore the potential for a comprehensive divestment of the entire portfolio, perhaps to a sovereign wealth fund, and wind up. That would likely be a financially acceptable non-taxable outcome for holders, who could then reinvest the payout. Divestment would remove the current market risk from the retail and office components of the portfolio, and development risk inherent in the various projects. It would be an interesting exercise to explore this, which need not incur great expense, and put it to a shareholder vote. This is not as radical a suggestion as it may seem, but an active approach to delivering shareholder value.

[SPC]

Totally agree with the last paragraph but good luck getting the board to agree.
Turkey's don't vote for an early Christmas.

[Baa_Baa]

The past couple of years have been tough on capital value (SP), but over 20 years, ARG is still above 8% p.a. return. These REIT's are cash machines, they consistently payout dividends to shareholders. Selling the cash machine might suit some who consider success to be the market price, but it won't suit most of the investors who enjoy the regular cash payouts.