Done some home work last weekend on Soilbuild Business Space Reit. Quick glanced through many of the quarterly reports while trying to decipher the recent results given by a few bloggers. Reason i am working on this is because of it's high dividend yield and past quarters stability.
There is mention about increasing absolute income for distribution and the annualized dividend is up.
Occupancy fell and the current DPU is down 4.7%.
I did found there's a a share placement prior year for a property resulting the total units differ between the two reported quarters. To get us into the right perspective before we all confuse ourselves with the numbers. We are talking about performance between 1Q FY16 and 1Q FY15.
Income for Distribution
Increasing income by itself is meaningless as this can be due to acquisition and when broken down to per unit, is what's matter. If there is share placement or rights issue, this will reflect as well in appropriate time frame.
Annualized Dividends
Annualized dividends is quite misleading too by itself because it's inherently tie to the share price taken from specific time or period. And a reducing share price can significantly push the yield up. In a deteriorating business environment, the capital loss can be so significant that long period of dividends could not make up for it.
Table - Lease Expiry
Finding of Interests
1. Between 1QFY16 to 1QY15: Unit increased by 15%
Mainly due to private placement and some draw down for property acquisition
2. If we take DPU 1.633 cent of 1QFY15 and after acquiring the new property of which rental
contribution is $7,870,000 annually. How much will it contributes quarterly to it ?
To simplify my calculation, assume minimal increase in loan cost since is mainly private placement.
And using the 1Q16 increased units as a base calculation, the formula will be
= 100*(7870000/4)/938010400 = 0.21 cents contribution to 1QFY16.
Without the property acquired, the distribution income of 1QFY15 contributed 1.42 cents to 1QFY16 assuming everything equal. This is also assuming increased units are solely due to the private placement which is likely not but for this exercise.
Adding both values we will get around 1.63 cents which is what we should expects assuming business stays level for 1QFY16. However DPU fell by 4.7% and this is on the back of 2% lower occupancy (from 96.8% to 94.8%). With more leases up this year and next (table above of 2016 and 2017 shown only) there will likely be continue impact.
Cory
20160419
There is mention about increasing absolute income for distribution and the annualized dividend is up.
Occupancy fell and the current DPU is down 4.7%.
I did found there's a a share placement prior year for a property resulting the total units differ between the two reported quarters. To get us into the right perspective before we all confuse ourselves with the numbers. We are talking about performance between 1Q FY16 and 1Q FY15.
Income for Distribution
Increasing income by itself is meaningless as this can be due to acquisition and when broken down to per unit, is what's matter. If there is share placement or rights issue, this will reflect as well in appropriate time frame.
Annualized Dividends
Annualized dividends is quite misleading too by itself because it's inherently tie to the share price taken from specific time or period. And a reducing share price can significantly push the yield up. In a deteriorating business environment, the capital loss can be so significant that long period of dividends could not make up for it.
Table - Lease Expiry
Finding of Interests
1. Between 1QFY16 to 1QY15: Unit increased by 15%
Mainly due to private placement and some draw down for property acquisition
2. If we take DPU 1.633 cent of 1QFY15 and after acquiring the new property of which rental
contribution is $7,870,000 annually. How much will it contributes quarterly to it ?
To simplify my calculation, assume minimal increase in loan cost since is mainly private placement.
And using the 1Q16 increased units as a base calculation, the formula will be
= 100*(7870000/4)/938010400 = 0.21 cents contribution to 1QFY16.
Without the property acquired, the distribution income of 1QFY15 contributed 1.42 cents to 1QFY16 assuming everything equal. This is also assuming increased units are solely due to the private placement which is likely not but for this exercise.
Adding both values we will get around 1.63 cents which is what we should expects assuming business stays level for 1QFY16. However DPU fell by 4.7% and this is on the back of 2% lower occupancy (from 96.8% to 94.8%). With more leases up this year and next (table above of 2016 and 2017 shown only) there will likely be continue impact.
Cory
20160419
cory what will you be evaluating this with? cache?
ReplyDeleteGood question. Never thought of it. If I do, those that has possible Edge over the receding tide. Eg. AEI near term.
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