KPG - Kiwi Property Group

[Basil]

Credentials of the two new directors appointed, look good to me. https://www.nzx.com/announcements/410034

[Basil]

Today's result seems satisfactory.
Dividend guidance remains at 5.7 cps which is a little bit disappointing although not unexpected given the increase in their interest costs.
9.5% gross yield.  I hold a few for the yield. 
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KPG/411747/394737.pdf

[Whome]

YES, hallelujah, at last - I have just heard from watching Q&A on TV1, the first National election policy announcement from Chris Bishop, Housing spokesperson that presents a serious attempt to address long term housing affordability.

It involves forcing councils with a billion $ money pot incentive to rezone land outside their current residential zones to residential status to force down the cost of house sections to within a reasonable multiple of a mortgage borrower's income.

This policy will see more new townships like Drury and Pokeno spring up in the Auck-Hamilton-Tauranga triangle where there is ample land available but where councils are currently frozen in the headlights and unwilling to address re-zoning.

I see KPG as a front runner in these new township developments with their experience with developing Drury, along with others like ARG & GMT.

It may be a reversal of previous policy but who cares if it addresses the fundamental issue of land unaffordability, especially for young people who need houses.

[Waltzing]

 Sing it out!!!

https://www.youtube.com/watch?v=aplWTXEcY70

[Basil]

Just a reminder that today is the last day KPG trades cum dividend and that they have reinstated their DRP which enables shareholders to get a 2% discount and for the number of shares to grow on a quarterly compounding basis.  Not made clear by the company without looking at the distribution notice is that the election notice for participation in the scheme, to be effective for this dividend must be filed with Link Market Services on or before 8 June 2023.
You'll need to update your preference electronically on Link's website or use the form here
https://kp-wordpress.s3.ap-southeast-2.amazonaws.com/wp-content/uploads/sites/11/Kiwi-Property-DRP-Booklet-20231.pdf

Based on my calculations, (taking off the near term 1.425 cps dividend for FY23 Q4 and treating this as a partial return of the purchase price), at 91 cents less 1.425 cps = net capital invested per share 89.548 cps, the 5.7 cps forecast for FY24 gives a net of tax paid PIE yield of 6.365%.
To a 33% taxpayer this is worth 6.365 / 0.67 = 9.5% gross. (Worth 10.43% gross to a 39% taxpayer).
If you take shares in lieu of dividend this grows to 9.5 / 0.98 = 9.694% forecast gross FY24 yield. (Worth 10.64% gross to a 39% taxpayer)

I really can't say with any degree of confidence one way or the other whether I think their current projects will be value add or otherwise, but that sort of yield from property investment is very good so I hold some solely for that reason.  I think most property classes are more closely aligned than many suspect and will move up and down with the winds of economic change and interest rates.  Decent discount to current NTA of 26% is also noted but unlikely to close much until they can prove their current projects are eps accretive, in my opinion.  KPG management and directors have a huge amount of work to do to prove to shareholders they can grow earnings per share, in my opinion.  Until otherwise proven, I think this is best viewed as a no growth company with very good yield based on the current share price.  Maybe as interest rates go down in the next 2-3 years, shareholders will be impressed enough with the above yields, the share price will move up a bit?  I suppose while enjoying these yields we can live in cautious hope...

[ken]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KPG/412772/396174.pdf

[Waltzing]

Looking like a good trading stock ... 600 day MOV AVE is huumm  1.069296096

[Buzz]

Looking like a good trading stock ... 600 day MOV AVE is huumm  1.069296096

It's also a good long term buy/hold, income investment stock, trading well under NTA with compelling gross dividends, paid quarterly with DRP as well.

As the economy bottoms, property bottoms and comes back into favour, which it will, we might look back on the attractive long term discount these property plays are presenting, right now. A compelling shift in their investment strategy and long term build profile is encouraging as well, I like them a lot.

Definitely worth having a balanced % of portfolio. Not trading these, happy to hold for as long as they're making bank.

[Waltzing]

Price for KPG back in  ...  price today ....

someone pass the TUI.....    No capital growth in the SP since they built  DJOSER

wonder how much the fees of management have increased...

 https://en.wikipedia.org/wiki/Pyramid_of_Djoser

[Basil]

https://www.kiwiproperty.com/corporate/property/56-the-terrace/
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KPG/412772/396174.pdf
Selling prime central Wellington property fully leased to the Govt for a whopping 13.5% discount to 31 March 2023 valuation. 
Hmmm    I hope these guys know what they are doing.
There's a lot of pretty pictures in their annual reports over the years and the word growth is spread liberally in every report you care to read so you'd be expecting that would be reflected in their distributions, right ?
So let's have a look over the last 10 years and see how all this growth talk has manifested itself into improved returns for shareholders from 2014 to 2023
6.4 cps, 6.5 cps, 6.6 cps, 6.75 cps, 6.85 cps, 6.95 cps, 3.53 cps, 5.15 cps, 5.6 cps, 5.7 cps.  Forecast for FY24 is 5.7 cps.  Wow, that's quite some track record.
I think its best take all their talk of growth with a pinch of salt.  It's a no growth stock with a good yield based on the current share price and let's just hope the dividend payouts don't decline further.
Disc: I have a pretty decent sized stake held for yield.

[snapiti]

crickey Mr Beagle I was thinking the same thing, 13.5% discount to the already  recently reduced value on the March books.
But do remember they are trading at a 30% discount to NAV

[winner (n)]

So Basil, kpg a good yielding stock ...ideal for punters who wish for a regular income ......possibly a lot of retirees amongst that lot.

So if one bought 100,000 shares in KPG for this purpose in 2014 they would have got $6,400 to spend ......but this year they're only getting $5,700 ..ouch

Using your favourite inflation calculator that $6,400 in 2014 needs to $8,000 if it had kept up with inflation

So can't buy as many things as one used to with your KPG divie

[winner (n)]

From Morningstar data a $100 invested in KPG in mid 2014 is now worth $93.67 .....that's TSR with all dividends reinvested.

Not much of an invested ......and that's not inflation adjusted

[Basil]

So Basil, kpg a good yielding stock ...ideal for punters who wish for a regular income ......possibly a lot of retirees amongst that lot.

So if one bought 100,000 shares in KPG for this purpose in 2014 they would have got $6,400 to spend ......but this year they're only getting $5,700 ..ouch

Using your favourite inflation calculator that $6,400 in 2014 needs to $8,000 if it had kept up with inflation

So can't buy as many things as one used to with your KPG divie

Go back another decade to 2004 and they paid 8.57 cps in dividends.
Can you understand why I can't stomach attending the annual meeting and hearing all their talk about growth ?  No brand of anti-nausea tablets would be strong enough.   Just as well it's going to be different going forward...or is it ?

[BlackPeter]

So Basil, kpg a good yielding stock ...ideal for punters who wish for a regular income ......possibly a lot of retirees amongst that lot.

So if one bought 100,000 shares in KPG for this purpose in 2014 they would have got $6,400 to spend ......but this year they're only getting $5,700 ..ouch

Using your favourite inflation calculator that $6,400 in 2014 needs to $8,000 if it had kept up with inflation

So can't buy as many things as one used to with your KPG divie

Which is a good thing. Remember - Adrian Orr wants us to spend less!