U and I

2nd Jun '21 by gmtrader

6 comments 571 reads

U And I (LON:UAI) has not had a good time for the last few years and covid certainly didn't help, or did it?

Covid has forced U And I (LON:UAI) to deal with issues, slim line the business to release capital and make things simpler. There is also a new CEO who has very large skin in the game and is continually adding.

CEO, Richard Upton, has set out a business plan for the company which entails disposals of 35 non core projects which will release funding for the company to then proceed with 5 Core projects, targeting £1.4 billion profit in the next 5 years.

"Since I took over as CEO eighteen weeks ago, this is precisely what we have done. We have made some clinical decisions in many areas of the business, resulting in further development and trading asset impairments. Covid-related market issues further added to us reporting hugely disappointing financial results today. I am absolutely determined that these years of underperformance are now behind us. From here, we will build trust and shareholder value. We have reset the strategy, refocused management, monetised assets, removed costs, reduced debt and reviewed the Board's composition. What we now have is a refreshed business that is not only sustainable for the long-term but one that is simpler, stronger and more shareholder focused. It is a business that is ready to deliver on its promises. We are on target to generate proceeds of £130 million by FY2022 from our monetisation programme, of which £54.5 million has already been completed. We have cut gross recurring overheads by 26% towards our targeted £12 million by FY2023. And we have reduced gearing to 35.5% towards our targeted level of between 25-35% by the end of FY2022. The business now has strong foundations."

No dilution of the shares are needed. Bad news is out of the way and the company is ready to deliver. When you look at the current market cap of £120m and the company is targeting £1.4 billion profit, providing the company does deliver, then it is vastly under valued.

In the past, U And I (LON:UAI) used to give dividends of 10%, 2018. The dividend is stopped atm, but will likely resume again next FY.

All in all, I think this is a company that is worth looking at and seems to…

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jonno

24th Jun '21

All in all I agree and have added to an existing holding since Richard Upton's appointment as CEO and the strategy change at the beginning of the year. The decision of the Secretary of State to refuse planning permission for the redevelopment of 8 Victoria Embankment, announced yesterday is a setback, albeit I suspect temporary. As to how temporary we will have to wait to see, as inevitably I feel a compromise will eventually be reached. I am not sure to what extent the building is currently occupied, as far as I can tell it houses Lambeth Fire Station, beyond that I am unsure

My breakeven price is 100p. Currently I am undecided as to whether to continue holding on the basis that perhaps the funds could be put to better use, but as you say Richard Upton has plenty of skin in the game, also the investment metrics, assuming the new strategy is successfully executed are enticing at the current price.

'Answers on a postcard' please. All thoughts and views most welcome.

gmtrader

6th Jul '21

Liberum upgrade price target today by over 50% to 140p.

Hi gmtrader

Thanks for the update as I haven't read the Liberum review. I continue to hold and remain of the view that Richard Upton will eventually turn U And I (LON:UAI) around. It will be interesting to see the company's response to the 8 Victoria Embankment planning decision.

All the best

Hi jonno,

Yeah it was a little disappointing but this is probably not unusual. Maybe with a few changes planning permission will be allowed. If not, then recoup some money and choose another project. After all, their plan is to reduce the amount they are working on and at least it was one of the smaller projects out of the core 5.

Some very large buys and sells have gone through in the last few weeks with only the bod buys reported with the share price in a narrow trading range.

Momoko Miyamoto

I cut losses here at the start of the pandemic. The planning rejection of old Fire HQ on Albert Embankment is material to the company and any further modified application will be time consuming, the previous rejection was in 2013. The company has a recent history of over promising and under delivering, I'm not tempted to get back in.

1st Nov '21

Hope you are still holding jonno with the buyout offer today of £1.49.

U and I

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Gmtrader

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