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 😉
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. 🙂
...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
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14 comments:
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."
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... :)
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
Hi Capricon,
For sure, all investments are good at the right price. ;)
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. :)
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
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
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!
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.
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.
Hi Wee Ee,
At this point, I am not too worried. Nothing unexpected. :)
For the latest 1H results, DPU dropped by a whopping 32.7%. According to AGT, this was influenced by a large repayment of membership deposit. I feel rather uneasy about it. What's your opinion ?
Any concern about the latest sharp drop in DPU? I think fundamentally nothing changed in the business and the drop is caused by payment of deposits by members. Or did I left anything out. My concern more is alignment of management to unit holders as this drop was unexpected.
See this blog:
Accordia Golf Trust DPU plunged 32.7%.
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