Can it swim against the tide?

10th Apr '09 by Murakami

1 comment 932 reads

Founded in 2004 by Miltos Kambourides and Pierre Charalambides
Listed on AIM in 2005 - http://bit.ly/fqyZ7
Invests in south eastern European residential resorts - " These investments typically comprise residential units (usually several hundred), integrated with leisure components, such as golf, polo, hotel, marina, spa, targeting buyers from Northern Europe and Russia".
The largest real estate investment company listed on AIM, the largest private owner of developable seafront land in Greece and Cyprus& the leading developer of large-scale residential resorts in South-east Europe
Enjoyed a market capitalisation of £875m during the 2007 bull-run but has come off massively - now looking very cheap on a NAV basis. However, even share prices that value companies much below the net value of their assets are often justified on the basis that asset prices will continue to fall...
Recently bought, for a total of €92.7 million, the 15 per cent that it did not already own of the holding company that controls Aristo Developers, a residential property developer in Cyprus.

How low will it go?

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Mark Tughan

20th Jan '21

I spotted this recently and yes, it does look like a huge discount to NAV. The company has also resolved to sell up and return proceeds to shareholders in 2021 (will this be delayed by Covid?), and also incentivised their asset managers based specifically on these returns - previously I think the investment manager could earn fees without there being actual distributions to shareholders.

I can see from the accounts that there is some pending litigation but they also state (as you'd expect) that they believe they have a defence to this and that they do not expect a material loss.

Andrew Coppel as Chair seems to be someone who has form with difficult situations, having been at Queens Moat Houses (after the scandal) and De Vere (a turnaround). I like the current list of substantial shareholders too, specifically JO Hambro and more recently Peter Gyllenhammer, who is a fairly well known value investor.

All in all, not without risks, but the comes a point where the discount to (declining due to costs) NAV is SO big...

Can it swim against the tide?

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Murakami

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