Well still no news on SLPF. I found this from Chris Lee last year so something should be due soon. They had a bit of a wind fall with Elrond Holdings last year.

One thing about SLPF is they cop a high brokerage - like buying fixed interest. Has anyone found a cheaper way to buy/sell unlisted stocks - I don't know why the brokers take so much, I guess its all a bit old fashioned & manual.

At least SLPF haven't been getting fund manager money at the cost of shareholders like APT does - I somehow aren't confident that small shareholders are APTs no one priority.

any way here tis.

Taking Stock 13-4-2006

When St Laurence advised the market this week that its subsidiary St Laurence Property & Finance would soon be announcing a windfall profit of around $30 millions after tax, there should have been three sets of people cheering.

Obviously those who recently bought SLPF bonds will be cheered that the company's balance sheet is to be further strengthened.

Cheering even louder will be those who own the 12'08, 9 per cent convertible notes, which St Laurence issued in what may have been the most extraordinary demonstration of corporate generosity in recent history.

This came about just three years ago when some of St Laurence's roughly 12 property syndicates were struggling to maintain their values, and faced possible interest payment reductions.

All such syndicates had these problems, those run by Waltus and Money Mangers generally having bigger problems.

Waltus and Money Managers both addressed the problem by offering an amalgamation at current values into new funds, arguing that the combined fund would have economies of scale that would over time solve some of the problems. These offers were no doubt fair but did nothing to ease the pain.

St Laurence offered to buy out, at a 10 per cent premium over market value, and offered investors notes in St Laurence Property & Finance that would convert at one share per note, in December 2008.

SLPF was a company that St Laurence owned and was generating growing profits, meaning that by 2008 each share would likely be worth much more than one dollar.

Effectively, St Laurence gave away most of SLPF to their syndicate investors, almost as an apology for the moderate or poor performance of a small number of the syndicates. (Some had done very well).

Well today SLPF's asset backing per share will be close to $1.50 and it is quite conceivable that by 2008 that figure could be still higher, perhaps significantly higher.

What that means is that even the investors in the worst syndicates, Capital Office, Wakefield and Thorndon, will own shares with an asset backing worth more than the investor's original stake.

The notes, currently trade at $1.05, an absurd discount to asset backing.

If SLPF chose to list this year, and convert the notes to shares early, I would expect its share price to be much nearer $1.50 than $1.05.

The controlling shareholder of St Laurence is Kevin Podmore whose reputation means more to him than more money, an attitude that differentiates him from so many whose activities focus on property. He has my respect and admiration.

And who will be the third group cheering the St Laurence result?

It might be those who are offered units in a new fund St Laurence is to issue soon, the St Laurence Property Development Growth Fund. This fund will offer $9,000 of bonds and $1,000 of shares, with a cash return of 13.5 per cent, to be invested in the sort of developments that SLPF has managed well in recent years. Of course there are no guarantees of future profits.

St Laurence itself will invest $1 Million of its own capital for every $1 million of share capital put in by investors.

The fund will operate for a fixed term and can only be rolled over that term if a majority of bond holders vote to roll it over.