10/06/2008
Trading at a 50% discount to net asset value (NAV), German property investor Dawnay, Day Trevaria is conducting a strategic review to maximise shareholder value.
At the time of recent profitable results from the Isle of Man-registered company, chairman Ian Henderson assured that the German economy remained ‘robust’ and that the company possessed ‘a high-quality, diversified retail property portfolio with both secure and growing rental income’. The portfolio – valued at €2,333m (£1,853m) against total borrowings of €1,789m – enjoyed an average rental yield of 6.2% in 2007 and rental income jumped from €70m to €130m.
At the December year-end, basic NAV per share stood at €1.087, rising as high as €1.129 when excluding deferred tax. However, adjusted net asset value per share had fallen by 2.7% since June 2007 due to ‘a slight softening of yields in the second half as the effects of the credit crunch are reflected in the valuer’s assumptions’.
In the face of turbulent financial markets and property wobbles in the UK and US, the shares have softened much more drastically, slipping from the €1.49 peak they hit early last year and their €1 December 2005 issue price. Now at €0.50, less than half the value of assets five months ago, management has had enough.
The board says it will ‘consider all alternatives available to the company to maximise shareholder value, including returning funds to shareholders through asset disposals or a sale of the whole company’. Although the review is at an early stage, a further update should be expected before long and the shares could repay a speculative buy.
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| Market cap: | 302m |
| PE Forecast: | n/a |
| Share price: | 0.50 |
| AIM | €30m |
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