KPG - Kiwi Property Group Limited

[winner69]

SP holding; orders building on the buy side at 116.5..

well off to work on the sculling as my nordic friends have warned me that summer regattas will be held next year on the baltic.. Testing some special high velocity looms specially lengthened at kilwell.. Buying NZ with aussi blades..will take them all back to europe to promote local products.

no point'building on the buy side' .... we want them to be buying at market and not just ordering

Over a million at 117.25 is more like it - that buyer was keen

[Waltzing]

even in its heyday i dont recall more that 400-600 on the buy side at a single price point but it would go 4 or 5 deep on both sides.

[winner69]

After deep research and analysis I’ve come to the conclusion that KPG are pretty useless property investors and the market sentiment in pricing them at such a deep discount to NTA says much the same

Analysis of the last five years cash flows highlights a few issues - the main one being that property revenue (rents) haven’t grown at all over the last 5 years.

Last years dividend not paid - my assessment they couldn’t afford it and if they had paid one they would have had to borrow to do so.

Whichever way I look at things it seems any sustainable dividend (let alone an increasing one) will require a lot of increased debt and even more capital raises (even allowing for sales). That is not a good position to be in.

I might be proved wrong over the course of time but I’ll back my own judgement and not get tempted to buy into this ‘growth story’ and the riches to be made from their new strategic direction.

[X-men]

It is a dog stock.... believe me....own it more than a year now....

[LaserEyeKiwi]

After deep research and analysis I’ve come to the conclusion that KPG are pretty useless property investors and the market sentiment in pricing them at such a deep discount to NTA says much the same

Analysis of the last five years cash flows highlights a few issues - the main one being that property revenue (rents) haven’t grown at all over the last 5 years.

Last years dividend not paid - my assessment they couldn’t afford it and if they had paid one they would have had to borrow to do so.

Whichever way I look at things it seems any sustainable dividend (let alone an increasing one) will require a lot of increased debt and even more capital raises (even allowing for sales). That is not a good position to be in.

I might be proved wrong over the course of time but I’ll back my own judgement and not get tempted to buy into this ‘growth story’ and the riches to be made from their new strategic direction.

what ]s your math on that? They will have $400 million cash by year end, low planned capex spend over the next 2 years, and dividend payments are under $100 million annually. I don’t see why dividends wouldn’t be easily sustainable going forward.

[Waltzing]

"It is a dog stock"

its a defensive stock if you study its 20 year chart.

Sell ASAP and move to a tech stock.

Buy some oil futures.

This stock will take some years to move back to 1.30.

Buy apple on the next big pull back the new APPLE design ARM chip kicks the apple software into high gear for some specific tasks ensuring the user base will stay with apple.

[Beagle]

I have completed my study of KPG and after taking a small 2% portfolio nursery stake (which was without doubt my least most researched investment decision in recent years), I have had a good look "under the hood" and come away very disappointed with what I have found.

It is cheap for some profoundly good reasons, many of which I outlined in my post yesterday but its also well worth noting that even adding back in Covid accommodations given to tenants last year that gross top line revenue has increased at only 1% per annum on average for the last 5 years and as that's clearly below the average rate of inflation.

In real terms over the last 5 years top line revenue is declining, earnings per share are declining. dividends per share are declining and NTA has declined in an extremely poor way relative to the all other listed property companies and quasi property companies (retirement companies), listed on the NZX and relative to any other form of property investment you care to name.

Its not just a recent problem either, dividends per share are dramatically lower than 10 years ago when accounting for inflation and NTA growth over the last decade has very badly under performed the market. Consider this. Summerset is now 10 times the price is was 10 years ago and KPG is unchanged, (declined in real inflation adjusted terms).

The only way this sort of woeful underperformance could occur is through very poor management. To me, its become clear that while they have some good assets, their management skills are far below average and I seriously doubt they have the skills to effectively execute their future development plans at Drury in a way that's eps accretive to shareholders.

I listened into the recent call and was unimpressed with their answers to questions. To me they lack a clear plan to grow eps and are whistling in the wind and hoping if they sweep their poorly managed regional asset problems under the carpet their new developments will be the panacea to solve their problems.

Its also clear to me KPG are on the front line of any further covid disruption and earnings could very, very easily be affected again.

Cheap for many compelling reasons. I sold out today for just a fraction over break even. (Sorry I won't be attending the annual meeting as I am no longer entitled to as I don't own any shares). Others might like to take them to task over the issues I raised yesterday, (which are so serious I cannot remain a shareholder no matter what their attempted explanations are). There are other far better opportunities on the NZX in my opinion.

Good luck to all holders.

[LaserEyeKiwi]

I have completed my study of KPG and after taking a small nursery stake (which was without doubt my least most researched investment decision in recent years) I have had a good look "under the hood"
It is cheap for some profoundly good reasons, many of which I outlined in my post yesterday but its also well worth noting that even adding back in Covid accommodations given to tenants last year that gross top line revenue has increased at only 1% per annum on average for the last 5 years and as that's clearly below the average rate of inflation prevailing, in real terms over the last 5 years top line revenue is declining, earnings per share are declining. dividends per share are declining and NTA has declined in an extremely poor way relative to the all other listed property companies and quasi property companies (retirement companies) listed on the NZX and relative to any other form of property investment you care to name.

The only way this sort of woeful underperformance could occur is through very poor management. To me, its become clear that while they have some good assets, their management skills are far below average and I seriously doubt they have the skills to effectively execute their future development plans at Drury in a way that's eps accretive to shareholders.

I listed into the recent call and was unimpressed with their answers to questions. To me they lack a clear plan to grow eps and are whistling in the wind and hoping if they sweep their poorly managed regional asset problems under the carpet their new developments will be the panacea to solve their problems.

Its also clear to me KPG are on the front line of any further covid disruption and earnings could very easily be affected again.

Cheap for many compelling reasons. I sold out today for just a fraction over break even. Good luck to holders.

thanks for your thoughts - will keep it in mind when evaluating future performance and whether I need to lighten up as well. At present I intend to stay in long term (5+ years) as they grow Drury and build to rent/office portfolios in Auckland, but I could conceivably bail if it’s apparent they are mismanaging further.

[Waltzing]

increase in GDP over the next2 years we are "HOPEIUM" to get back above our ave of 1.23 in 3 portfolios.

then its just a test for transaction reporting.

they probably feel they have no competition and therefore performance is a non issue at the board table.

The delta variant is a threat but australia and NZ are exposed for the next 6 months at least.

MR B is performance based and has no time for bad management. The assets are mint though the best of the best for NZ once the dud's are disposed of.

sometimes the tide floats all boats and thats what we are banking on.

[Rawz]

Thanks Beagle for your post and W69 for yours last night. Always makes you think a little harder when a couple of ST legends bail on a stock.

I'm happy to hold on for now. SP will bounce back into the mid-high $1.20s again at which point I might sell some.

One thing I will say is they have absolutely nailed Sylvia Park which was a reasonably sized project.. this gives some comfort that they can execute on drury. Mismanaged a couple of smaller regional malls yes but they will be gone soon.