|
Related Topics |
|
We take a look at the quarterly financial results of Lighthouse capital, a company that is active in the direct property and listed real estate and infrastructure space.
|
|
About Lighthouse Capital (LTE)
Lighthouse Capital Limited (“Lighthouse”or the “company” or the “group”, formerly known as Greenbay Properties Ltd) is a global business licence company registered in Mauritius. The company has primary listings on both the Official Market of the Stock Exchange of Mauritius Ltd (“SEM”) and the Main Board of the Johannesburg Stock Exchange Limited (“JSE”). The group invests globally in direct property and listed real estate and infrastructure securities
Lighthouse Capital’s primary objective is investing and developing in diverse global real estate. The Company seeks to invest predominantly in Europe targeting properties with strong sustainable income from high quality tenants with a strong likelihood of renewal of leases on expiry. Listed investments are well diversified and include real estate securities with reasonable yields and growth outlooks.
The image below shows the sectoral profile of Lighthouse capital as at end of December 2018
Lighthouse Capital’s primary objective is investing and developing in diverse global real estate. The Company seeks to invest predominantly in Europe targeting properties with strong sustainable income from high quality tenants with a strong likelihood of renewal of leases on expiry. Listed investments are well diversified and include real estate securities with reasonable yields and growth outlooks.
The image below shows the sectoral profile of Lighthouse capital as at end of December 2018
So based on the value of their various assets the sectors make up the following of their total fair value of their assets:
- Direct property: 81%
- Listed real estate: 14.9%
- Listed infrastructure: 4.1%
So to the numbers we go
- Property rental and related revenues: R101.4 million
- Fair value gains/losses (on properties and listed holdings): -R371 million
- Loss for the period largely due to massive negative fair value adjustments as shown above: -R562 million
- Net asset value per share: € 53.65c (or R8.48 at today's exchange rate)
- Interest bearing borrowings as percentage of total liabilities: 64.14%
- Distributions paid per year: R1.71, which gives it a dividend yield of 23%
- Cash and equivalents on balance sheet: R865.9 million (or R1.89 per share which equates to 27.6% of the share price)
So any comments or guidance from management on the results?
Well management made no real comments in the results released and most of the notes discussed technicalities regarding the financial statements including how fair value adjustments on their properties and listed holdings are made. But no guidance or overview of the results from management has been provided.
So should you buy their shares?
Well the distribution yield is extremely high, and they are trading at a discount to their stated net asset value (which is made up by a significant part of listed properties). And listed properties have not been performing well, and will continue to struggle. And as the struggle continues the value of their own properties and the listed properties they own will in all likelihood continue to decline which could see the quoted net asset value of theirs come down with it. We would not advise investors to buy LTE right now, or any property related REIT at this point in time. With consumers and manufacturers under pressure, especially in Europe and South Africa the property market will continue to experience headwinds.
Lighthouse Capital Share Price
The screenshot below, taken from Sharenet shows Lighthouse Capital's share price (they were known as GreenBay properties before). The spike in the share price towards the end of 2018 is due to the corporate actions that has lead to the company now being called Lighthouse Capital. As the image below shows the company's Year to Date (YTD) performance has been pretty negative, and we suspect this will trend will continue of the foreseeable future.
