Argosy Property

[Waltzing]

not fast enough ...

sell it and buy some car stocks ..

thats almost as hard to look at as a Jackson pollock ..

https://www.moma.org/artists/4675

[winner (n)]

Half year result pretty boring

No pay rise for punters again ....don't they get it there's a cost of living crisis

https://api.nzx.com/public/announcement/442203/attachment/432291/442203-432291.pdf

[Waltzing]

buildings, buildings, buildings...

with no depreciation allowed and a government that doesnt do accounting and an accounting standard system that is single dimensional consolidated tax reporting they dont have wiggle room but to invest , invest , invest if they can in smart buildings other than offices and retail space.. which means they have to slowly move to boring warehousings and container terminals...

its where its at ...

remember the accounting standards are paper based models...

[Basil]

Half year result pretty boring

No pay rise for punters again ....don't they get it there's a cost of living crisis

https://api.nzx.com/public/announcement/442203/attachment/432291/442203-432291.pdf

Presentation is here.  https://api.nzx.com/public/announcement/442203/attachment/432292/442203-432292.pdf
Sometimes boring is good.  ARG is a yield story.  Big research paper by Craigs I read recently has them as the highest yield of all listed property stocks.  6.65 cps / 109 = 6.1% PIE tax free yield worth 6.1 / 0.67 = 9.1% effective gross yield for 33% taxpayers.  Back out the 1.6625 cps coming in a few weeks and treat it as partial return of the purchase price those investing for 2025 income are getting 6.65 / (1.09-.016625) = ~ 6.2% tax free worth 9.25% gross for 33% taxpayers.  With the 2% DRP scheme reinitiated if you subscribe to that the effective yield becomes 9.25 / 0.98 = 9.44% gross, paid quarterly.

That will look pretty darn attractive this time next year when term deposits are under 4%.

Looking at the bigger picture with interest rates falling, cap rates should stabilize and eventually provide a tailwind, the economy should start recovering from sometime next year and they have a number of developments in the pipeline.

NTA is now $1.46 and it trades at a decent discount to that.  I think they have done well to keep the dividend yield unchanged this year in light of depreciation no longer being claimable, (unlike KPG who seem to look for any excuse to drop their payout)

I have a moderate position I hold for yield.

[BlackPeter]

Half year result pretty boring

No pay rise for punters again ....don't they get it there's a cost of living crisis

https://api.nzx.com/public/announcement/442203/attachment/432291/442203-432291.pdf

Well, Its at current SP a dividend yield of 6% - pretty good. Obviously - any punter wishing to receive a higher income from them only needs to buy more shares at the current discount.

[Basil]

It's a PIE so its 6% tax free mate.

[BlackPeter]

It's a PIE so its 6% tax free mate.

True, so could be depending on ones tax status equivalent to something like 8% (or even a bit more) before tax. I can live with that - it was not me complaining that the dividend is too small ;

[Basil]

See paragraph 1 of post #48 above.  9.44% gross for people on the 33% tax rate who take shares in lieu of dividend.  Worth even more for those earning over $180K on a 39% marginal tax rate.  For a change I am not going to bother with the DRIP and simply take the cash, spend and enjoy it.

[Dolcile]

Basil, one day if you care to share, I'd be interested to hear the make up of your portfolio - with percentage allocations.  I'm looking at building a pay cheque in retirement and in the process of learning a lot from your posts.

[Ferg]

Thanks for your earlier post Basil.  It's a shame people don't read the post immediately before their own, to avoid posting nonsense.  And then you had to spell it out again.....

But what you say is true - a nice yielding stock with little downside risk.

[Alekhine]

Great Roadshow today. There seems to be some strong tail-winds for Argosy. We were told that the Govt budget yesterday contains some real upside, particularly for ARG. They will be able to depreciate their cost of new commercial builds (I think they said about $60mil worth) by 20% in the first year, which should help to boost profit, so they should be well within their dividend payout range. With interest rates moving in the right direction and some promising projects on the go, they should do very well over the next few years. There could still be some volatilty, if Trump policies substantially affect any of their tenants, but it looks like a solid investment. The dividends, which appeared questionably unsustainable on Wednesday's call with Analysts, now look well covered based on todays meeting. It was good to see Ronaldson at the meeting and hopefully he will share his thoughts with the forum.


Disc: I hold shares in Argosy and bought some more today after the roadshow.

[Basil]

Thanks Alekhine.  I bought some more yesterday on the back of the Govt's announcement too. 

[Basil]

Good post by Ronaldson on the other channel this afternoon.  Good on you guys for going.  I was too busy "tucking into" analysis of MFB.

Yes, a good presentation, underpinned now by the budget announcement referred to post the FY25 Results release, which is very positive for Argosy given its current developments/build intentions and helps offset the impact of removal last year of the 2% annual depreciation deduction allowance on commercial buildings which of course is not reinstated, so much easier now going forward to maintain the existing dividend within AFFO, when some analysts had begun to voice doubts. But other positives include the improved leasing situation, lower insurance costs, easing interest rates flowing thru and the general state of the portfolio which is incrementally recycling towards green industrial buildings, mostly in Auckland.

The CFO is quite comfortable with the outlook and left me reassured that ARG is investible at the current price level, so I will be taking advantage of the DRP for the next quarter and only sell on-market around that time sufficient to meet my immediate cashflow needs. Of course, guidance for FY26 is to repeat the 6.65cps PIE payout at 1.6625cps each quarter, which offers a good yield for holders with some upside in the share price possible. Incidentally NTA is now $1.53 per share so you are buying the asset base with a useful margin to spare!

[seaweed]

Looks like that one buyer at $1.205c been there for a while with a 331,940 buy order doesn't appear to be in any hurry to buy, or is it price stabilizer. 

[Waltzing]

Total melt down in wellington likely to be a cabinet reshuffle soon? country run by lawyers in wellington? 

Finance minister a lawyer? Maybe her second degree was economic?

NATS in real trouble .. it should have been slash and burn on day one... but none of the incumbents can read a balance sheet.

Does this mean a panic 50 or even 75 point cut?

Triggering a rush to buy PIE yield? as the yield on TD's crashes?

The Nats will now panic and do a behind the scenes cuts to everything they can find? or are they now stuffed...