Argosy Property

[BlackPeter]

Argosy Roadshows start later this week. Any shareholder and NZSA member can register - and tell management what you think about dividends (or any other relevant question you have on mind). Just remember to register to get a place ... 

https://www.facebook.com/nzshareholders/photos/argosy-property-is-coming-to-13-locations-nationwide-between-22-may-and-15-june-/1001823255860006/

Personally - I will go to the Christchurch event, but don't think that the lack of a dividend raise will be my most important thing. Last time i checked, the dividend yield was 6.2%, and this doesn't even contain the PIE tax advantages ...

[Arbroath]

A buyback here feels like a no brainer...holders can buy more with their dividends of course but I'd rather a smaller dividend was combined with a significant buyback

[Basil]

There's no need to have a smaller dividend.  They need to stop making non eps accretive acquisition's at so close to their cost of funds its ridiculous.  Just buy back your own shares instead which is guaranteed to be EPS accretive for remaining shareholders.

[BlackPeter]

There's no need to have a smaller dividend.  They need to stop making non eps accretive acquisition's at so close to their cost of funds its ridiculous.  Just buy back your own shares instead which is guaranteed to be EPS accretive for remaining shareholders.

Maybe. I guess there are pros and cons to buybacks, and this is certainly a larger discussion then just Argosy.

But yes, it might be worthwhile to ask about their investment strategy. Maybe they lost the plot - or maybe they expect their investments to grow in price?

I think the Auckland meeting is this Friday - are you going?

[Basil]

Its in my diary and I have reserved myself a spot.  I am mulling over this afternoon whether that's the right forum to raise my questions. 

[winner (n)]

Maybe the ARG share price will do another 'post GFC run'

2010 to 2019 looked good times

You cannot view this attachment.

[Basil]

Sobering stuff that the share price is the same as it was 20 years ago.  RBNZ inflation calculator says share price should be $1.75 to keep up with inflation over the last 20 years.  Good yield and huge discount to NTA but the long run performance relative to inflation is depressing.
FY27 will be the fifth year in a row dividends have not gone up. 

I suppose the board think they have done a good job maintaining consistent uninterrupted quarterly dividends considering the almost endless recession the economy has been in since Covid hit in early 2020 and in some respects you could argue they have done okay.

[Sideshow Bob]

Same as KPG.

90c 7th of January 2000

Traded between 91 and 92.5 today....

[Basil]

Great yield but no growth sums them both up.

[winner (n)]

In the media. -

Buyback possible?

Asked on the conference call whether a share buyback was on the cards, given the discount its shares traded at relative to net tangible assets, chief financial officer Dave Fraser replied that it was possible.

"Certainly, if developments get stalled and we do sell these assets and we have a lazy balance sheet, then we would definitely look at a buyback as an option," Fraser told the call.

CEO Mence added: "The first cab off the rank, of course ... is turning the DRP off, which is effectively raising equity at a discount at the moment. So, tick that one off.

"When we see the opportunities there, then that would be evaluated against all the other options, but it's always on the agenda."

[Sideshow Bob]

Great yield but no growth sums them both up.

But both trading well under NTA. Have probably grown asset value (over 26 years not hard in real estate) but not grown earnings/revenue accordingly.

But like anything, there is a time and a place.

I'm liking a few more KPG, especially if can get more at a good price, with a dividend feed coming up in a couple of weeks. 

[Basil]

I'm liking a few more KPG, especially if can get more at a good price,

For what its worth I bought a few more at 91 cents yesterday. At least they have a goal of growing dividends at 3% per annum, even if not achieved at least they have that as a goal. 

[Basil]

"When we see the opportunities there, then that would be evaluated against all the other options, but it's always on the agenda."

They need to get on with the job.  There is no money in paying top dollar for commercial property that only yields 5% (when fully leased, which assumes they will fully lease it at expected lease rates), when they could be buying their own shares back at a 35% discount to NTA.

[ValueNZ]

In the media. -

Buyback possible?

Asked on the conference call whether a share buyback was on the cards, given the discount its shares traded at relative to net tangible assets, chief financial officer Dave Fraser replied that it was possible.

"Certainly, if developments get stalled and we do sell these assets and we have a lazy balance sheet, then we would definitely look at a buyback as an option," Fraser told the call.

CEO Mence added: "The first cab off the rank, of course ... is turning the DRP off, which is effectively raising equity at a discount at the moment. So, tick that one off.

"When we see the opportunities there, then that would be evaluated against all the other options, but it's always on the agenda."

Does make you wonder if I had any influence there given I think I was the first to bring up buybacks on the ARG thread.

[Red Baron]

They need to get on with the job.  There is no money in paying top dollar for commercial property that only yields 5% (when fully leased, which assumes they will fully lease it at expected lease rates),

Could be vorse.  Like IPL putting their lease positive Blenheim and Nelson based Voolvorths zupermarkets on ze block, to vund a new zupermarket een Kaiapoi, - a new leaseback deal zigned on terms - making a long term loss!  On paper not a loss, as ze vunding is from IPL020 (2.40%) and IPL030 (4.00%) bonds vhich do not mature unteel 2027 years away! (in reality 'year away').

But vorse, ze new zupermarket partly cannibalizes ze market of ze existing Voolvorths een Kaiapoi.  Zo net turnover eez ztalled there, reducing ze revenue leenked turnover part of ze rent escalation clause on zhat zupermarket building too!  Talk about pulling ze vool over ze unitholder zheeples eyes......

But of course plenty in ze kitty to pay ze parent Stride property managers, managing ze properties on an 'pay per NTA" basis.  And multi property tenant Voolvorths kept very happy.

RB