CNP - Centro Properties Group

[tulasi74]

Tulasi,
I don't believe it's as simple as that...what about fees generated from services business? ...and distributions not paid out in the past and future,where does this go?..and gross rental income % increase?..and alot of others factors?
Anyone can play with mirrors and make any company in this climate look like a basket case...the press are doing a good job of that...

Fees generated from services business is Centro's main source of revenue. At last report, excluding asset value writedowns which created a 1 billion loss, Centro made an operating loss of 50 mln in my view. What I was trying to highlight with my post is that the 50 mln loss was for 1 July 2007 to 31 December 2007. During this period Centro would not have experienced the higher financing cost they are experiencing now or the adviser plus litigation fees. By reducing debt, they will reduce interest cost but only by 61 million year.

The only point I was trying to make was that Centro is a long way from making profits because of the high cost of debt. They simply paid too much for their acquisitions. Whoever advised them on the US acquisitions, assuming they got some advice, gave them poor advice. The Fin Review in one article did report that documents lodged by one of the companies acquired by Centro showed that Centro may have paid up to 60% premium. With cost of debt rising, it is not hard to see that it would be extremely difficult for Centro to make a profit.

I guess all will be revealed in their August 29th report. One things for sure, I can see the writing on the wall for its share price for the next 12 months and its not good. I am sure they will survive and eventually rebuild but its a long term thing. In the meantime, if the share price spikes which would mainly be through daytraders (of which I am one too), its probably a good time to take profits. Please DYOR.

Good luck all. I have a lot of shares in Centro.

Tulasi

 

[MU002]

income source of Centro is very stable, this can be confirmed by the company's statement and bank's extention of debt. I am major in accounting but haven't spent much time on reading the balance sheet yet. from Centro's cashflow statement, I didn't see the loan expense can not be covered. and I read several articles saying Centro can well serve its interests. The assets' book value loss is not a real loss. and one thing very important about Centro is that it holds comercial property, not residential property. shopping centers can hold value much more stable than house. if your home is located in a hot renting area, is the price more unlikely to drop? if Centro's assets can be sold near the book value, the SP will go up, if not, banks won't allow the sale. and more extentions will be given until the property market recovers or someone else want to take over. if Centro have to be wound up, it was long time ago. the pain to me now is that wait another year or two seems very long. so upset to sell all my cnp just one day before its surge last week. I was thinking about buying them back soon after, anyway...

 

[$$Punt$$]

income source of Centro is very stable, this can be confirmed by the company's statement and bank's extention of debt. I am major in accounting but haven't spent much time on reading the balance sheet yet. from Centro's cashflow statement, I didn't see the loan expense can not be covered. and I read several articles saying Centro can well serve its interests. The assets' book value loss is not a real loss. and one thing very important about Centro is that it holds comercial property, not residential property. shopping centers can hold value much more stable than house. if your home is located in a hot renting area, is the price more unlikely to drop? if Centro's assets can be sold near the book value, the SP will go up, if not, banks won't allow the sale. and more extentions will be given until the property market recovers or someone else want to take over. if Centro have to be wound up, it was long time ago. the pain to me now is that wait another year or two seems very long. so upset to sell all my cnp just one day before its surge last week. I was thinking about buying them back soon after, anyway...

That is the dilemma of owning shares, when you had substantial holdings, your judgement become emotional at times and easily influenced by negative news BUT after you sold all your shares and saw SP moving up, you can see there is some light at the end of the tunnel afterall. The question is easier said than done, at what price and how long are you prepare to wait?

 

[$$Punt$$]

''There has been very strong institutional interest in the portfolio and the options are currently being assessed by Centro,'' Simon Rooney, head of retail investments for Australia at property firm Jones Lang LaSalle, told Reuters.

''A decision is expected next week.''

Good luck guys

 

[wilko66]

http://business.smh.com.au/business/global-investors-lining-up-for-centros-assets-20080727-3ls3.html

 

[vida]

The news is great today. the current SP should never been seen again, all up from here I think. I am already regretting not buying heaps more at .21 and I almost did but then decided I needed to keep my remaining cash without risk. I put it in a six month term deposit last week and now I can't buy more CNP unless I sell other stock or go into debt. My mum was reading the news and gave me a talking to and I for once in my life listened and put my money away somewhere safe and inaccessible. I should never listen to my mum Oh well if CNP does well my current holding will please me enough. Will see what today brings, can't wait until 10 am. The SP should go up but in current climate probably not by anything significant, but its a good omen for the future = all will be well I think with CNP and we can prosper a bit at least if we make good judgments with what we gain

 

[wilko66]

Small story, small impact but more of the same re pending property sales. This one from the US

http://www.globest.com/news/1212_1212/newjersey/172785-1.html

 

[$$Punt$$]

From another forum,

Someone has stumbled across a PDF outlining the sales of some of the Centro properties.

Apparently a search with google resulted in the following PDF

http://centroportfolio.com/Portfolio Overview FINAL.pdf.


Some key notes from the PDF


1)Release of preliminary information: Monday 2 June, 2008 (Access to Financials post receipt of CA)

2)Receipt of first round bids: 12 Noon, Thursday 10 July, 2008

3)Confirmation of shortlist: 12 Noon, Wednesday 16 July, 2008 (Access to data room provided)

4)Close of final bids: 12 Noon, Thursday 14 August,2008

5)Execution of unconditional contracts: By Friday 15 August, 2008


Page 13 also talking about keeping the management rights..



WOW!! this might explain the huge volume the last hour of the day + green.

Cheers

I believe if there's no announcement about the Australia Portforlio sale this week, it will be next week. Hold on guys!

 

[tulasi74]

I noticed unusual rise in CER price yesterday but nothing for CNP. So I bought a few today hoping that the announcement is imminent. Even if its not this week, then definitely next week as contracts have to be in place by next Friday.

Good luck all.

Tulasi

 

[shmi]

yes this increase in CER and no movement at all in CNP intrests me too, it seems odd to have no movement at all giving CNP being a substantial holder in CER, but it seems that a single seller (info from another forum) seems to be keeping the price at 25c, im quietly confident, but yeh thats just me, jump onto hot copper for a lil more info, CNP gets a bit of chatter there actually

cheers

 

[tulasi74]

For all you CNP punters out there, CNP is getting ready to move back up closer to the 50 - 63 cent level.

This is partly a gut feeling and partly technical analysis so please DYOR.

Tulasi

 

[shmi]

care to share some of that tecnical analysis at all or detail what type of tech youa re talking about? Furthure more do you believe that this will be a spike or maybe a new resistance level for CNP?

 

[nioka]

For all you CNP punters out there, CNP is getting ready to move back up closer to the 50 - 63 cent level.

This is partly a gut feeling and partly technical analysis so please DYOR.

Tulasi

I hope you can back that statement up with some technical analysis. to post a 100% rise on a gut feeling must be classed as a ramp.

 

[tulasi74]

I trade using bollinger bands. For daily charts I use 20 periods and for weekly charts I use 20 periods and 30 periods.

I noticed on the daily charts that the bottom bollinger band has been starting to rise and its now at 23.09 and upper band has been coming down and its at 29.71. On the weekly charts, the upper band price target using 20 periods is 50 cents and using 30 periods is 63-64 cents. Narrowing bands generally indicate a strong move. Direction is unknown until the move starts. With CNP and the news that is expected this Friday, I have assumed that the move is upwards. Recently on days where share price spiked close to 31 cents, the volume was strong and the weakness that followed was on smaller volume which means those who bought are holding.

I also use stochastic using 15 periods and that shows that the stock just crossed above the oversold line which is generally a buy signal.

Analysts commentary after the sale of the CAF portfolio was positive especially as CNP had retained management rights for at least 12 months while reducing debt.

There are signs that the credit market conditions are easing. Recent comments by ANZ when they put down fixed interest rates suggests that cost of debt is the lowest its been for a while. Other companies that also invest in property like Mirvac have had their share price rise on the likelihood of falling interest rates. There are signs that housing in America has bottomed although it was always the case that shopping centres would not be affected to the same extent as residential property.

I have previously posted some fundamental analysis information. My basic conclusion was that current share price was discounting for possible fall in property values and shareholder litigation claim. From memory, the figures were NTA of $1.35 was discounted to 95 cents for potential fall in property values and by another 70 cents for shareholder claims giving current share price of 25 cents. If you assume that CNP will not need to pay out more than half the shareholder claims, and property prices don't fall by that much and their survival continues, the NTA is around 60 - 70 cent mark.

I do feel though that their August 29th report will be very weak. I expect Centro to have made a loss on an operation level as I expect the refinancing cost, adviser fees would have put them into negative. If this was not the case, they would not have been required on two occasions to raise additional liquidity. How their earnings report affects share prices will depend on what their commentary is about the future, outcome of sale of Aus portfolio which is pending, and share price just prior to the announcement.

This is just my view of the situation. I have been following Centro for many months but please DYOR.

Tulasi

 

[nioka]

Thanks for the info Tulasi. I agree with most of what you say. I hope enough CNP fans can see things as we do.I'd like to think the shares are worth close to $1 but it is a long way to go to get there. I'll continue to hold.

 

[$$Punt$$]

Still no announcement even though the execution of contract is today....... Dissappointed with CNP......if still no announcement next week, I bet SP will start heading south!

 

[shmi]

after watching CNP for a while now, i am not suprosed with this as they dont tend to release info quickly and also its not friday in the US market till our market closes, this might affect it as suposidly much of the interest is from US firms, Also if CNP doesnt release info till End of Aug report i would expect to see leaked documents before then.

 

[tulasi74]

Looks like I was wrong on my expectations for an announcement. The AFR reported on Thursday that Centro have had to discard their sale plan for the mini CAWF in the way they had initially planned. Under initial plan, unconditional contracts were supposed to be in place for the sale of 50% interest on some centres and 100% interest in Centro Bankstown. They report that the plan was discarded because the bids received were selective and had many conditions attached to them. Apparently, they are now in talks with one Australian buy for the WA properties. From memory, I recall reading an article that said that Colonial First State was interested in bidding for one of the WA centres.

I now want to echo the calls made by other posters for some regular updates by management. It is disappointing not to get an update on August 15 when that date was clearly advised in the media as the date for final contracts to be in place.

Overall, I am losing faith that this company has a strong future. While they have good assets, it is clear that with what is happening in the US that their assets are depreciating in value but their debts are still very very high. Cost of debt is also extremely high. Even if they manage to pull through with the help of bankers, the share price can stay stagnant at these low levels for many months and probably years. One must question the opportunity cost of holding such a risky investment.

Good luck all. Hope there is an announcement on Monday.

Tulasi

 

[$$Punt$$]

You Got to be Kidding Me

Losing confidence in CNP, no announcement, no updates, negative news in the media......its like playing russian roulette, seriously considering selling all CNP shares and punt on other stock

 

[simontitan]

This week might prove the make or break it would seem. Been watching since price dived months ago.

Still very tempting though