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Re: [sharechat] Trans Tasman Properties (TTP)


From: "David Morgan" <davidmorgan@paradise.net.nz>
Date: Tue, 29 Jul 2003 17:25:11 +1200



----- Original Message ----- 
From: "david.gibson" <david.gibson@k.co.nz>
To: <sharechat@sharechat.co.nz>
Sent: Tuesday, July 29, 2003 3:36 PM
Subject: RE: [sharechat] Trans Tasman Properties (TTP)


> I am aware that GPG have considered Trans Tasman "in play" since the
> conversion of the convertable notes to shares.  GPG also has a significant
> investment in AGH.
>
> While I cannot consider the interest/involvement of GPG to be wholy
positive
> ... I do not consider the involvement of SEA to be completely negative.
My
> understanding of management fees is that AGH contract with SEA for
property
> management in Australia.  These fees are benchmarked at the approximate
cost
> of performing management "in house".  The NZ operations rely on "in house"
> management.  I do not know where the perception that SEA or Directors are
> "creaming" the profits comes from ... I would appreciate any information
on
> this ;)
>
> My research into the "Property Trust" sector in NZ leads me to believe
that
> other listed property organisations have management company fee structures
> that are significantly worse than the TTP benchmark.  Again, I would
> appreciate comment and information.
>
> Overall, I think SEA are a significant asset to TTP.   The company has
been
> able to commit to long term restructuring because of the support of the
> foundation shareholder.  The RJI Trans Tasman and SEABIL really "fell
> together" rather than separately "falling over" in 1995 - the balance
sheet
> was quite shocking at this point - and has progressively improved.
>
> Today, I think the shareprice discount is anomalous.  However, I am keenly
> interested in other opinions and pertinant facts!!
>
> In terms of the reallocation of the sale proceeds of the AGH property:
>
> 1)  AGH will have lost critical mass - they either need to reinvest or
> dissolve.
> 2)  They have an experienced Australian based Board - my guess is they
will
> find some investment/development opportunities.
> 3)  There is scope for further restructuring of the TTP parent - my guess
is
> payback of the expensive secured bonds.
> 4)  Rather than a cash special dividend, for TTP shareholders, there is
> significant opportunity for a share buy back on the NZ market to improve
the
> NTA.
>
> By the end of the year, I expect:
>
> 1)  Resumption of the dividend to about $0.04 per share from operational
> cash flows
> 2)  A share price in the $0.40 - $0.45 range
> 3)  An end to the downward property revaluations
>
> Of course this is personal speculation - but it is based on a close look
at
> the balance sheet and keen interest in the companies recent "events".  I
> would appreciate comments or critiques of this "straw man" argument.
>
> Unfortunately the stock does not attract any coverage from Analysts or
> insightful Journalists.
>
> Thanks to Marilyn for the market insight :)
>
>
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