Tuesday, October 11, 2016

Recent Action - FCL

A quick update to the recent movement I have in my portfolio.

I managed to get through the queue by buying 10,000 shares of FCL at a share price of $1.48. Selling pressure has been strong in recent weeks, and we can see again that today it closes with a rather huge volume, given the low liquidity this counter have.




The Group is gaining momentum with building up a guardian of their industrial properties, especially after they have listed their industrial arms in Fraser Logistics Trust. The latest strategic investment in "Project Titan" with SET listed Ticon has attested to that. The latter having 18 industrial estates and 33 logistics locations under their development.

In Australia itself, the Group continued to extend their footprint by expanding their presence into the Sydney Western suburb area for their industrial properties development.

Fraser Logistic Trust should benefit over time from the aggressive development and strategic investment from the sponsor so it'll be close in my watchlist.

The Group paid out 8.6 cents in total the last two years as dividends and the management guided that they may do the same for this financial year. This would translate into a decent 5.8% based on the current price.

Some people are worried about their high gearing, but you can see based on the nature of their income and coverage ratio that they are at a very comfortable position.

Their current recurring income is expected to be at around $698m. This was based on the lease and the listing of the 4 Reits under their arm which they have a stake in. To pay 8.6 cents dividends, the company would need to fork out about $525m. This would be in their comfortable range of doing so.

I think that's just about the thesis for me coming into this play, as with other developers which I have previously vested in.

Some selling pressure has begun, perhaps something is brewing.



13 comments:

  1. About 11% float now. Is the likelihood of privatising one of the reasons for your investment?

    ReplyDelete
    Replies
    1. Hi sg dividends

      Unlikely to be so since like he is trying to grow his property empire through this way.

      Delete
  2. In 2014, they only paid out 4.1 cents. In 2015, DPU spiked suddenly to 8.6 cents. Do you know the reason for the spike ?

    ReplyDelete
    Replies
    1. Hi Betta man

      Since the period, they have listed a couple of their new reits and thus they have recycled more capital while still maintaining a decent amount of shareholders holding in the reits. I think that's the reason why they are able to pay a higher amount of dividends than in the past where they have to mostly depend on more development.

      Delete
  3. Nice B, you got in a few cents lower than I did :)

    ReplyDelete
  4. With about 2.9 billion shares outstanding, doesn't it cost $250 million approx to pay out $0.086 dividend per share? Can enlighten?

    ReplyDelete
    Replies
    1. Hi Raymond

      Let me recheck my calculation again.

      thanks for informing.

      Delete
  5. Frasers Centrepoint Limited (FCL), through its Frasers Property Holdings (Thailand) subsidiary, is planning to pour THB13.23 billion (USD370 million) in Ticon Industrial Connection Public Company for a subscription of around 735 million new shares, priced at THB18 (USD0.50) per share. This will mark the largest deal for the Singaporean developer since it acquired the Malmaison Hotel du Vin chain for SGD621 million (USD448 million) last year.

    ReplyDelete
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