# RRT - Record Realty



## Ken (20 November 2006)

Just wondering what you guys think of RRT.

last year has doubled its assets, and paying 11 cent dividend. trading on PE ratio of 4.

market cap $197 million...


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## pch (20 November 2006)

*Re: RRT- 11 cent dividend*

Had a real quick look..

They divested a lot of assets last FY so the PE is reflective of a much reduced EPS next year. 06 FY they made 33.8c per share. Comsec forecasts have them at 4.6 and 3.4c for 06/07 and 07/08. I don't think you will get more 11c dividends if that proves to be accurate assumptions


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## 56gsa (21 November 2006)

ABNs suggests 11c div in FY07 - in line with company guidance
Refinancing is done every 6 months - eg they bought Germany property 3 mths ago and have refinanced to create 5% increase, or $80m which is then going towards USD223m invest in properties in US ... is that why price has faltered recently?

i hold and 11c div for investment at 94c was very handy 

NAV: here we come
A result with no major surprises with another 11dpu forecast for
FY07 which requires at least two refinancing events. RRT remains a
successful property leveraged finance play trading at a discount to
its NAV backing.
Key forecasts
                                    FY05A FY06A FY07F FY08F  FY09F
Total property income (A$m) 41.8  70.4  106.2  113.3  116.3 
Reported net profit (A$m) 3.56  47.6  39.6% 47.9  52.1 
Normalised net profit (A$m) ¹ 3.56  1.86  11.9% 12.3& 16.2 
Normalised EPS (c) ¹ 3.17  0.98  6.26  6.49& 8.51 
Normalised EPS growth (%) -72.1  -69.2  539.7  3.67  31.1 
Dividend per share (c) 12.0  11.0  11.0  11.0% 11.0 
Dividend yield (%) 11.1  10.2  10.2  10.2  10.2 
Normalised PE (x) 34.0  110.4  17.3  16.7  12.7 
Book value per share (c) 80.0  118.4  132.1  149.9  166.3 
Disc/(prem) to NTA (%) -35.0  8.79  18.2  27.9  35.1 
1. Pre-goodwill amortisation and exceptional items 
Source: Company data, ABN AMRO forecasts 
Accounting Standard: Local GAAP 
year to Jun, fully diluted


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## pch (21 November 2006)

Yeah after my premature post I went to their website and checked their forecasts also. 

Seems they will always have patchy earnings based on the fact they make their profit on refinancing and selling of properties rather that distribute the rental yield. They are spreading the EPS gain from last years sales over a couple of years in the form of the large dividend.

What is does do, is makes them hard to gauge going forward. I agree thats a great yield on the present price. The longish terms of the leases and the calibre of tenant should provide reasonable insulation to a market or regional downturn. Their website actually is pretty good in getting their point across.

Hmm, dammit now I'm going to have to do some research  You'd really need to know what assets are up for refinancing in the next 2-3 financial years.


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## Ken (22 November 2006)

write up in latest smart investor:  

For the record, this managed property trust listed in December 2003 at $1 and Allco took over management in August 2005. Since then the trust has been restructured. Allco raised $56 million in its two-for-one rights issue in april and renegotiated its senior lending facility.

Allcos facelift of RRT should be hit with investors, given the promise of stablising cash flows to deliver tegular dividend distribution of 11 cents.

RRT promised shareholders it would also pay a minimum of 11 cents in 2007.

In the year june 2006 the group posted net cash of $44.7 millio, altough operating cash flow was about 2.6 million.

Meanwhile the company has started the financial year with a bang. more than doubling its assets under mangemen with a buying spree in july. it began with its first aquistion outside australi. 565 million dollar purchase of office buildings in germany. Then it confirmed the $238 million purchase of the ASX headquarters on bridge street Sydney.  These deals and the promise of a distribution to shareholders, have helped the companys stock recover 12 % since hitting a low in january. Analysts at aBN amro believe there are more opportunities for more aquisitions.

52 week high $1.11
52 week low $.85
Yield 11.5%

MArket Cap $202.7 million

Estimated PE ration 20.7

I bought a few yesterday at 92 cents.  It is listed on my margin loan with a 50 % lending ratio.  The dividend is more than the interest.... 

I will be going long on this.  

First Property stock err....


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## Ken (22 November 2006)

With the company being published in the Smart Investor magazine for december,  chance of some decent volumes.


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## Ken (28 November 2006)

Anyone on em?


They seem to have held 93 cents for the past few days.

With the feeling of another 11 cent dividend next year, it looks good for an income stock growth.  

Dont really know a heap about them still.


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## Ken (15 December 2006)

Sellers disappearing.

Yield still attractive...

Property trust floats with international exposure are set to be big in 2007 I was reading.

Interesting to see how RRT travels.

Only hold small number, mainly for the dividend being more than interest on my loan.


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## 56gsa (21 February 2007)

For those looking for dividend yield...

RRT have re-confirmed they intend to pay 11cents again this year - still dependent on 30June result though - which is not bad at current sp of 93 cents.

However they have also announced 4 for 7 issue to holders at 80cents - so that means you're getting over 13% on the issued stock.  Issue includes bonus option exercisable at $1.

Last years div did not have imputation credits but was the tax-equivalent with mix of tax-free and discounted capital gain.


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## Ken (29 June 2007)

Just thought i'd get some feed back on this one.

RRT seems a relatively safe place to park some funds.

12% dividend. I think numbers are stacking up well with the purchases they have made. Sydney ASX building is set to bring some profits.

End of financial year... funny things happen. Not expecting anything out of the ordinary but I reckon most of the selling is done.

Opinions?


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## 56gsa (29 June 2007)

Looks like we're the only two following this one Ken!

RRT is highly leveraged, and seems reliant on revaluations / sales for profit, with rents barely covering interest payments...  so risk is global property markets but they good spread across continents now and have long-term, reliable tennants (my favourite too!)

I felt a lot more comfortable when Allco came on board and definately looking at picking some more of these up before the div announcement (in maybe early sept when annual final figures announced?)

Looks like they've pushed higher today but low volume - i think whoever nabbed them at 83 got a bargain... with 11 cent div announcement these should go to $1 (which is still over 10%)


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## Ken (29 June 2007)

Its not really a stock for trading, so theres not much interest i guess.

Bit like WCB, the cheese company. Not much hype. No one interested. People look for banks and big miners for blue chippers.

I just reckon, if you can hang on to a stock like RRT for an extended period of time, you get yourself a really good income, that evens out the bumps and bruises when it gets tough...

Just my thinking...


Most people dont like to have money parked in yield stocks, why would you when theres been so much growth in the mining sector....

I am into mining also, but as a safety measure for a slowing economy. I think RRT should be well positioned.


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## 56gsa (17 July 2007)

Dividend hunters are waking up to RRT with possible ann of 11cent dividend in about 6 weeks.

For players who want leverage RRTO (March08 at $1) may be an option (scuse the pun).  With the 11cent div you'd think $1 on shares isn't out of the question forced up by players seeking a yield - in past they have gone to $1.10 - current buys of RRTO are still under 2cents...  potential to push higher?


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## Ken (17 July 2007)

Well you just never know who is holding the options....

Theres always money to made with the options... it makes a stock more mystical in my opinion. Adds to the complex nature of the way certain stocks are traded.

I am not suprised it closed on 93 cents today. That seems to be a very critical point in the history of the stock. Has been support before, so if we can get through 93 cents obviously the next barrier is $1.00. Getting through a $1.00 and really there is some blue sky...

Property is running hot at the moment so who knows. Have we broken the sideways trend?  I think its fair to say we have...

Will be interesting to see where this stock is at in a couple of years.... 

If RRT can hold its current dividend who knows.

Your still looking at around 8% yield if the stock is $1.20 which is still great.... Would love a one off dividend with RRT like 50 cents, like PBD had... that would really sent the stock rocketing. Not sustainable but would get some interest.


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## Ken (1 August 2007)

Just the most boring stock on the market!

Puts you to sleep but when the going gets tough, the old property trust holds firm!

For the long term investors parking fees are 24.95 through your online broker.

Cough cough...

12% dividend coming...


RRT rated grandpa stock of the year.


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## Bluebeard (1 August 2007)

Seems interesting- have these gone ex dividend yet and when is the dividend pay date? Also has it rebounded back after the exdiv date in the past, if you could fill me in id be greatly appreciative


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## Ken (4 December 2007)

RRT LOOKS AN interesting prospect with a 15% yield on the stock now.

For long term investors this could be a very good income stock at current prices.

71 cents a share paying 11 cent dividend and it is trading well below its NTA value.


I am no guru, but as far as I can see the numbers are stacking up. Even if the stock does drop. The lower price you buy, the better the dividend yield.

Am I missing something?


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## prawn_86 (4 December 2007)

I cant remember where i heard it (sorry) Ken. But if my memory serves me then i think that RRT disposes of its assets in order to pay its dividends, because of its trust structure.

So theoretically the SP should always fall lower if they do not make any new acquisitions.

Let me know if your interested and i'll try and dig up that info


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## Trader Paul (4 December 2007)

Hi folks,

RRT ... only some brief details, right now !~!

03122007 ... double bottom, after trending down,
                  since mid-October 2004 ..... 

07122007 ... minor and positive ... finances???

21-31122007 ... Merry Christmas - expect VERY
significant news here, as a positive spotlight
is focused on RRT ... this should be BIIIGGGG,
being right on the summer solstice and we are
looking for a BIG move upwards !~!

02012008 ... minor

09012008 ... minor

22012008 ... minor

25012008 ... significant and positive ... finances?

More later .....

have a great day

paul



=====


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## Ken (4 December 2007)

Thanks for the heads up I do know they dispose of assets, buy and selling property etc.

I just find it a very interesting stock considering the stock is paying 15% yield.

If the share price tracks lower then they may explain it, but if the NTA is over $1.00 then it appears RRT is just undervalued.


My understanding was that they are moving into Germany.


More research needs to be done, as it is a stock most people dont understand I feel.

I for one will be doing this because at current prices its one of the stocks that says its a logical buy, but it could be to good to be true.

15% dividend must carry some kind of risk you would think.


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## Rainmaker2000 (4 December 2007)

Does anyone want to sum up the business they are in, the nature of their assets, profit drivers........it does not sound worthwhile talking about dividend yield if all these guys do is flip assets around and do property 'development'......but if they have recurring cashflows, I could understand the worth of the div yield more...


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## Ken (12 December 2007)

I have got no idea.

But my theory is that these sorts of stocks are only worth getting if you want it as an income. 

If it is viewed as a higher risk term deposit with a  5 year view then shareholders should be rewarded.

The maths is as follows.  If dividend is kepth the same which is currently 15.7% then the following is the returns over 5, 10, 15, 20, and 30 years.

All hypothetical..

$10,000 invested turns into

5 years = $21k
10 years = $47.5k
15 years = $103k
20 years = 226k
30 years = $1.077 million dollars.
40 years = $3.4 million dollars
50 years = $14 million dollars.
100 years = $21.5 million dollars

I know thats pretty extreme, but shows the value of compounding.

If we decide to add $5000 per year into the stock in a perfect world we still retain the 15.7 % dividend, then the following occurs.

5 years = $60k
10 years = $160k
15 years = $380k
20 years = $828k
30 years = $3.6 million
40 years = $15 million
50 years = $68 million
100 years = $100 million dollars!

hehe bit extreme and unlikely to happen as there are far to many variables with dividends being re-invested, and other events. But maths it all sounds pretty straight forward.


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## prawn_86 (12 December 2007)

Like rainmaker, i would want a solid business description before investing.

At this stage my signature says it all


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## Rainmaker2000 (14 December 2007)

I got to hand it too ya Ken, you are the king of hands free investing...

I'm sure we all love 15% dividends.....gees, if I could guarantee the yeild, I'd be on much better terms with my friendly neighbourhood margin lender who seems irate with my current 20% lvr.......hell, my margin lender would probably come over to my house, threaten to bust my knee caps with a ball pein hammer unless I helped them to cut out the middle man so the lender could bath in 15% fully franked yields instead of the current market rates they offer me to multiply their money....and this is comsec I'm speaking of

The reason why I have 20% lvr is not cause I'm unfamiliar with the 'buy' function on the Comsec website, it's because finding above average returns entails risk, smarts and analysis....

For example, any company consistently paying 15% yeld must either be:

a) On a PE of about 6 (assuming full payout of earnings which remain constant)

b) Consistently increasing earnings

While possible in theory, neither of these scenarios seem possible in practice..........The fact is earnings do not remain constant and ironically, many companies require earnings reinvestment just to maintain earnings or to grow year after year.........ironically, the companies that are able to pay 15% yields choose to reinvest profits anyway to become growth stories


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## 56gsa (21 December 2007)

In the current environment it may be a possibility that investors are overly cautious regarding risk within the LPTs.  Of course one has to weigh upside/downside risk.

Upside - RRT has an immediate upside of a possible 11cent div. which at current SP is a whopping 17%.  (announcement this confirmed record date for 2 x 5.5c payments 12 march / 24 june).  
RRT funds these generous distributions thru regular revaluations of its properties and sales as well.  Thus the distribution could be under threat if current valuations (due to be released in Feb08) are less than ideal or the sale of a Mt Gravatt property does nto come thru.   

Downside - Worst case is of course you loose your investment.  But is this likely?  Is it another Centro?  The announcement below would seem to suggest the debt to be renegotiated in next 3 years is only $90m (5.4% x 1.678bn) + $165m short-term facility expires July09. So not talking billions and remember RRT has Allco backing to source debt.


Has the market overdone things on this one??





> Record Realty (ASX: RRT) confirms long term debt funding position for
> its portfolio
> In response to current market conditions, Record Funds Management Limited
> as Responsible Entity for Record Realty (RRT) confirms the current debt across
> ...


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## 56gsa (14 February 2008)

OUCH ... the ccp virus has spread - RRT haven't sold the building and have foregone the interim divvie... so got crunched today down from 60c to 33c...

But consider what the last years been like for Mr JA Kinghorn ... correct me if I'm wrong but wasn't he the guy who floated RAMS before the crunch and got out with a lot less than what he could've made... well he's been putting some of that spare cash from selling RAMS into buying up RRT (and Allco too I think)...  His 38m shares in RRT fell $10m today... wonder what's for dinner tonight at the Kinghorn family mansion?


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## Rainmaker2000 (15 February 2008)

Wow, that's absolutely brutal........I'll have to take a look......surely not paying a dividend is a positive thing for a company in this climate........less leverage at least buys time to offload assets above net tangible value


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## 56gsa (19 February 2008)

OUCH x 2...  The saga of JA Kinghorn gets worse...  For all those that have an implicit belief that those-in-the-know 'know' this will spin your mind.

JA Kinghorn is founder of Allco which owns RRT (property trust).  JA is looking to place his proceeds from RAMS somewhere and has chosen RRT.  

On 13th Feb JA decides to invest another $4.5m in RRT (along with the approx $20m in there already)  
On 14th Feb RRT announces no interim div and stock dives 50%...

what do you do?  your $25m invest is now worth $13m...  another way you could have waited a month and bought twice the number of shares you own now for the same investment

Maybe JA should have phoned his RRT friends?  maybe they aren't talking now...??


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