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"E-book" by AK

Second "e-book".

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Accordia Golf Trust and lower DPU.

Friday, May 26, 2017

Reader:
Hey AK, what do you make of Accordia Golf Trust latest results? Looks pretty dismal, all important numbers are down. Any positives to it at all?

AK:
eh... you say leh?

Reader:
From the numbers I don't see anything good. But management says that tourism may have a positive impact in mid to long term
And they said there was bad weather, maybe the weather might improve. That's about all the good I could see from the report

AK:
I would ask if the dip in results is due to something more enduring.
If so, the decline would become a trend.

Reader:
True. But difficult to say how much is due to earthquake and bad weather. And how much due to fundamentals. 


AK:
You will have to make a judgement call ๐Ÿ˜‰

Reader:
I have small position only so I think I'll hold for now , at least the dividend is good


AK:
If we are investing for income and if we got in at a lower price, this fits. ๐Ÿ™‚



...unfavorable conditions during the year resulting in lesser operating days as
compared to previous year:
• 1H FY16/17: Earthquake in Kyushu (April 2016); Typhoon (August and September 2016);
Heavier rains (June 2016)
• 2H FY16/17: More snowfalls (February 2017)

See presentation:
http://accordiagolftrust.listedcompany.com/newsroom/20170525_183557_ADQU_RRL9A22VE4KR13RC.2.pdf

When we invest in Accordia Golf Trust, we have to be prepared for some possible fluctuation in revenue and I said this in 2015 too: 
http://singaporeanstocksinvestor.blogspot.sg/2015/11/accordia-golf-trust-dpu-of-232c-and.html

11 comments:

AK71 said...

Some might not know this while some might have forgotten. I started my relationship with Accordia Golf Trust as a trader. As an investment for income, my initial purchase was at 74c a share. Of course, I bought more as its price declined later on.

Accordia Golf Trust: 12% yield?

"Some might remember that I mentioned 74c in a blog post in July when I wondered at what price was Accordia Golf Trust a buy. The IPO price of 97c a unit was unpalatable to me for various reasons although the Trust promised a 7% distribution yield. I said then that 74c a unit seemed like a more reasonable price to pay for the Trust."

Capricon said...

Personally I am skeptical on the golf course business... Holding myself till it was below 50cts, bought some at 49cts as I am still not convinced of the business but thought some risk is worthwhile for the 10% yield.

I appreciate much now that: "all investments are good at the right price"

Looking back, I should have bought more at 49cts... :)

Kevin said...

Went for this event and the management said adding of more golf courses to its portfolio are on the cards to enhance growth.

http://i.imgur.com/TZQVwxx.jpg

AK71 said...

Hi Capricon,

For sure, all investments are good at the right price. ;)

AK71 said...

Hi Kevin,

They have the debt headroom to do this too. Fully debt funded, any acquisition in the near future will most probably be DPU accretive. :)

Kevin said...

Hi AK,

I agree too as I believe interest rates in Japan will continue to stay low and there's room for debt with its low LTV.

I also do hope the trustee-manager will do its due diligence and not overpay for any golf courses from its sponsor or third party sellers for its own benefit.

With the passing of the long-awaited integrated resorts bill last December, I foresee that it will bring additional vibrancy to the golf scene(if the weather holds up). :P

AK71 said...

Hi Kevin,

I believe there are more good things to look forward to as investors in Accordia Golf Trust. Of course, nothing is 100% and we are not just talking about the weather. ;p

l'etudiante said...

Hi AK,

was looking through the financial info of AGT and can't help but notice a really low current ratio at 0.4. reading its statements and it says that its due to" reclassification of non-current borrowings from financial institutions to current liability". What do you make of this? is this a source for concern? thanks!

AK71 said...

Hi l'etudiante,

They have debt due in August and, hence, the reclassification.

With negative interest rate and ample money supply in Japan, I feel that AGT should not have an issue refinancing the loan.

lim wee ee said...

Btw I thought 3.59c represents a 90% payout as compared to last year which was 100%.
If it is the case then the difference is not so much year to year.
Thanks.

AK71 said...

Hi Wee Ee,

At this point, I am not too worried. Nothing unexpected. :)

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