Goodman Property Trust

[winner69]

Opps, forgot there was another thread. Lets make this one a specific to GMT then. Can one of the mods please change the thread title to Goodman Property Trust.

Your thread you can change the title

Go to the first post / edit / change the title

[Beagle]

Roger- have you considered the fact that new shares will be issued to the promoters since settlement of highbrook buyout was deferred by 2 years(I can't remember the exact arrangements)? I like them but sold out recently! I still like GMT but believe there is a conflict of interest due to being not internally managed!

I like ARG and hold a few. Planning to add more!

I sold VHP - I just don't trust Northwest and we missed the opportunity to buy back the management right few years ago when investors had the chance!

Quite correct. There remains 37.3m units to be issued in Dec 2015 as deferred consideration in respect of the highbrook transaction. Current units on issue are 1,225m so a 3% dilution is earnings per share will prima facie occur but as the ongoing development of this park progresses, (fastest development pace in over 5 years at present), I am very comfortable that we will see this transaction as earnings accretive.

The trust has a target land value holding of only 5% of its portfolio, expected percentage at the completion of current development projects is just over 10% so while they continue to distribute only 80% of earnings as development of this park continues I expect this to change ion the medium term. I also like the moves the trust are making towards corporatizing their structure and the appointment of independent directors.

I believe we will see meaningful medium term growth in distributions from this trust (soon to be a company).

I have held Argosy but recently sold at $1.00 on the basis that I struggle to see where earnings growth is coming from.

[Beagle]

All resolutions passed at the AGM. I got trapped in the office and didn't get a chance to attend but had the live webcast going in the background and it all sounds good and prospects for growth look excellent.

Interestingly for holders on less than a 33% tax rate, the first quarterly dividend of 1.6125 cents is plus an additional 0.26609 cps imputation credits, just over a quarter of a cent so holders with a 17.5% tax rate, (income up to $48,000), have the option of including about 1 cent of that dividend, (approx. 2/3 rd's of it) as a fully imputed dividend at 28% and by doing same will be able to claim back the 10.5% difference between the corporate tax rate of 28% and their personal rate of 17.5% on most of their dividend. I expect as GMT's effective tax rate increases future dividends will be imputed to this level or slightly higher. The balance of the dividend is able to be treated as exempt income notwithstanding the fact that some shareholders will take advantage of claiming some of the imputation credits back.

This change which I only realised today with their first quarterly distribution announcement also makes the trust an attractive investment to shareholders on a 17.5% tax rate.
Stock is trading cum the above mentioned dividend, ex date is early September.
Disc: I added more yesterday and today at $1.07.

[Beagle]

GMT suspends dividend reinvestment plan today - doesn't need to keep the money with very low gearing.
It could be argued that they no longer need to retain 20% of earnings for further development either, what with their low gearing and stated objective of recycling older developments for new ones.
I'll be writing to the board later this year suggesting a higher pay-out ratio next year, suggesting 90% which, if implemented, would see the gross dividend yield at about 10% based on today's price for those on a 33% tax rate and still leaving adequate funds for further development. I'll also be suggesting another bond issue what with their longest dated bonds presently bid at 5.6% on the NZDX, makes sense if they paying circa 6.6% to their banking syndicate.
1% saving on $100m is another $1m per annum in unit holders pockets

[Billy Boy]

"GMT suspends dividend reinvestment plan today"
Thats the best news I've heard in a while. They are staying with those that
are already established in DRP. I wish they would cancel that as well.
DRP's in general are not good IMO as they dilute the share cap and nullify
any capital gain.
BB

[Sideshow Bob]

Craigs have downgraded from hold to sell, as above its price target. Cites outdated governance structure, capitalised interest charge to be released into the P&L, and unsustainable dividend payout ratio.

[couta1]

Craigs have downgraded from hold to sell, as above its price target. Cites outdated governance structure, capitalised interest charge to be released into the P&L, and unsustainable dividend payout ratio.

Wouldn't buy any of the property trusts at current prices at 96c level GMT was okay as was ARG at 90c.

[Beagle]

Craigs have downgraded from hold to sell, as above its price target. Cites outdated governance structure, capitalised interest charge to be released into the P&L, and unsustainable dividend payout ratio.

Unsustainable payout ratio WTF ???? They're only paying out 80% of after tax EPS whereas almost all other REIT's are paying out very close to 100%, in Argosy's and KIP's case they're paying over 100%.

Couta1 - Mate I agree they were both good buying at those prices and I did, (sold Argosy at $1.00 on the basis that they're fully priced with no growth). GMT are now a dividend story at the current price.
As mentioned previously, if they change their payout ratio to 90% next year then we are talking about a stock paying out a gross yield of 10% for investors on the 33% tax rate.

The prices of these stocks bottomed out at those level's much earlier this year at a time when world growth looked like it would take off and interest rates with it.
Now we're looking at much more muted growth it appears fears of rapidly rising interest rates have abated significantly, globally and within N.Z.
In that sort of environment I expect these sort of returns to be highly attractive in a sideways environment.

[Beagle]

Craigs have downgraded from hold to sell, as above its price target. Cites outdated governance structure, capitalised interest charge to be released into the P&L, and unsustainable dividend payout ratio.

I've found Craig's call most intriguing and definitely didn't agree as posted above. What I find really interesting is that right after they made that call 3 weeks ago the stock got hammered down to $1.05 - $1.055 on really high volume but since then its been steadily rising to close today at $1.13. That's a substantial gain in only 3 weeks for a low beta, low geared property stock in what has ostensibly been a pretty flat market environment and an epic fail on that analysts part at Craig's in my opinion. Very happy to continue holding

[winner69]

Gaynor seems less than impressed with the carry on around the recent sales.

Seems those in the trust have lost out on millions, if not tens of millions, with the managers doing very well


http://www.nzherald.co.nz/business/n...ectid=11358864