This blog gives you the latest topical news plus some informal comments on them from ShareSoc’s directors and other contributors. These are the personal comments of the authors and not necessarily the considered views of ShareSoc. The writers may hold shares in the companies mentioned. You can add your own comments on the blog posts, but note that ShareSoc reserves the right to remove or edit comments where they are inappropriate or defamatory.

Alpha Pyrenees Trust

Two years Alpha Pyrenees Trust Ltd, a property company registered in Guernsey but listed on the London Stock Exchange, appeared to be an attractive investment. It seemed a good opportunity to invest in a European commercial property company that could take advantage of the commercial property sector upturn within Europe. The company has a portfolio of industrial properties mainly in France and with a small percentage being located in Spain.

In December 2012 the share price was 16p and the Net Asset Value was declared at 34p so in essence there appeared to be a good investment opportunity in spite of the high gearing i.e. loan to value ratio of approximately 90%.

Other aspects were a) ongoing low interest rate climate (particularly in Europe) b) the healthier commercial property market (as confirmed by a number of large agents) and c) the potential to sell some assets and reduce gearing and hence borrowing costs.

Today the share price is approximately 1p giving a market cap of £1.5m with the main influence on this being the current banking loan agreement which expires in Feb 2015. Clearly any news regarding the renewal will have a major impact on the share price given the current low level.

The company’s latest accounts for the 6 months to the 30th June declare a Net Asset Value of 12p (22.8p on Dec 2013) and an adjusted loss of £1.6M.

Some shareholders consider that the directors should have acted more vigorously and more wisely in respect of:

a) Disposing of properties in order to realise cash and reduce borrowings.

b) Managing currency hedging and loan arrangements.

c) In forecasting future market conditions to enable commercial decisions to be made that are in the best interest of the shareholders.

Shareholder Charles Jarvis is proposing that a Shareholders Action Group be formed to enable solid representation to be made at future meetings and propose board changes with a view to improving the performance of this Trust in future.

For more information or to support such a Group please contact him on charles.jarvis@gmail.com

Roger Lawson

One comment
  1. Mark (@marben100) 26th November 2014 at 10:59 am

    Surely the lesson here is not to invest in such highly geared vehicles? It only take the slightest slip for the equity to be wiped out. These days, I’m not likely to be tempted by anything geared by more than 50%. OTOH I’m happy to invest in vehicles like Custodian REIT (CREI), with a maximum gearing of 25%, which is investing in properties at attractive rental yields of over 7%, thus enabling it to pay a healthy and reliable dividend stream, with an element of inflation protection & potential capital growth.

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