Daily Stock Market Report (Tue 18 Feb 2025) - AGR, SQZ, CGS, SLP, PLUS, BOWL, ELIX, TRT

18th Feb by Graham Neary

61 comments 6417 reads

Good morning! The Agenda is complete now.

12.30pm: all done for now, thank you.

Companies Reporting

Name (Mkt Cap)	RNS	Summary	Our view (Author)
BHP (LON:BHP) (£104.9bn)	Interim Results	HY25 rev -8% to $25.3bn, adj profit -23% to $5.1bn. $2.5bn interim dividend.
Anglo American (LON:AAL) (£33.1bn)	Sale of Nickel business	Anglo has agreed to sell its Brazil-based nickel operations for “up to $500m”.
Antofagasta (LON:ANTO) (£18.1bn)	Final Results	2024 rev +5% to $6.6bn, PBT +5% to $2.1bn. 2025 guidance unchanged.
Intercontinental Hotels (LON:IHG) (£17.0bn)	Final Results	2024 rev +6% to $4.9bn, adj op profit +10% to $1.1bn. RevPAR +3.0%. Confident outlook.
Plus500 (LON:PLUS) (£2.1bn)	Preliminary Results	Rev +6%, EBITDA +1% ($342m). $110m buyback & $90m in divis. “Extremely well positioned”.	GREEN (Graham) Investors are being asked to trust the strategy of spending big on customer acquisition, with the view that it will pay off in future periods. Additionally, 2025 looks like it could be a quieter financial year, with less trading activity. But the long-term picture is one of tremendous growth and expansion and that continues today most notably in the United States, UAE and Japan. More than 1/3 of the market cap is covered by cash and PLUS continues to buy back its own shares.
Assura (LON:AGR) (£1.4bn)	Statement re. Possible offer from KKR	The board believes KKR’s offer “materially undervalued the company” and thus rejected it.	AMBER/GREEN (Graham) No change to my view expressed yesterday with the shares offering both a discount to NAV and an attractive yield. Deleveraging could help to boost investor confidence.
Serica Energy (LON:SQZ) (£562m)	Update on Triton FPSO	Triton production suspended due to Storm Éowyn damage. FY guidance under review.	AMBER/GREEN (Roland - I hold) Production looks likely to fall below previous guidance this year, but strong gas prices may mean the impact on financial performance is more limited. I’m concerned by the risks of relying on ageing infrastructure but continue to believe the shares offer value.
Hollywood Bowl (LON:BOWL) (£470m)	Share Buyback	£10m buyback, “to reduce the share capital of the company”.	AMBER/GREEN (Graham) [no section below] BOWL matches last year’s share buyback, despite very high capex spending which saw net cash fall to £29m as of Sep 2024 (Sep 2023: £52.5m). However, it chose not to propose a special dividend this year, saving about £5m. Interesting that it…

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ken mitchell

18th Feb

Thanks Graham for the further Assura (LON:AGR) update and for referencing my reply to your analysis yesterday. I hold several REITs but hadn’t previously looked at Assura (LON:AGR) . Wish I had now as there was a 15 year multi year low buy opportunity at just 35p recently, so bearing in mind the discount then, no wonder a potential bidder pounced.

Also they have high quality assets, so much so that a bidder was (unlike with EBOX ) prepared to pay near to the full NAV. But the share price is now well below 48p suggesting that there won’t be a higher bid.

Assura (LON:AGR) LTV is high at 49%, but asset disposals are bringing that down. The recent trading update and previous Results were overall bullish……again explaining why KKR bid.

Other REITS could well be bid targets. The problem is guessing which ones. Good quality REITS on big discounts could be the likeliest targets and if the bid is anywhere near NAV give the most upside for holders.

I saw on Monday that Paul Scott is a sudden convert to the REIT attractions and holds 5, with his choices influenced by shrewd Investor Wasim Shakoor. One of his choices is Social Housing REIT (LON:SOHO) which is on a huge 52% discount and 9.1% dividend and LTV looks fine at 37%. I hadn’t looked as for vague reason put off because they invest in social housing, but that discount and yield makes it well worth checking out. Social Housing REIT (LON:SOHO) has bounced to 59p from recent 55p low.

Of the several I hold Supermarket Income REIT (LON:SUPR) with J Sainsbury (LON:SBRY) and Tesco (LON:TSCO) accounting for over 50% of their tenants and the other major supermarkets being their other renters means almost certain 100% rent payments along with annual rent increases and, obviously it doesn’t get much higher quality tenant wise than those! Supermarket Income REIT (LON:SUPR) at 72p has just bounced from recent 66p all time low. Discount is 22% despite that high tenant quality, and dividend 8.6%. And LTV is fine at 37%.

Warehouse Reit (LON:WHR) which I bought at 76p all time low recently (and covered on the Investment Trust thread here then) is still at a bargain 82p price. Discount is 35% and dividend 7.6%. LTV is 34%. Warehouses are in demand ….and that 35% discount looks way over the top. Top bid candidate?

I also,hold Schroder European Real Estate Investment Trust (LON:SERE) now 67p and up from recent 60p low. Discount is too wide at 35% and dividend 7.5%. LTV is low at 25%. It’s in the same Commercial Property Europe sector as EBOX which I held and at one point the discount went to around 50% before the bid.

The Commercial Property Sector looks over the worst with several reporting small NAV increases after a while of lower NAV updates. As the Assura (LON:AGR) news this week hints at too, it’s a sector well worth checking out while discounts are still wide.

Jon F

I can't see how to edit, but in fact the market is still open for around an hour. Getting my time zones mixed up...

There was no value assigned the announcement, just a comment it reinforces the 2025 outlook and revenue recognition will be in 2025. So perhaps there won't be any big moves. Currently around 3% down for the day...

Rusty2

Beeks Financial Cloud (LON:BKS) it is up 6.6% at the moment.

Now 8.3%.

Paul2148

Possibly timed with an announcement at the exchange in Mexico? No value given as product isn’t sold but will be made available to customers.

Reading between the lines, CEO comment seemingly bullish on the prospect of other contracts.
(I hold).

bohenie

Thanks for this Ken - Is it worth trying to get some of the tax on divis refunded - when held in a SIPP or ISA - or is it just not worth the effort. Ditto Irish shares...?

JSchoffer

Do you mean outside of a SIPP or ISA? There is no tax on dividends when held in these

Yep, it's a happy evening!

jesseowens

I believe the position of the various parties regarding the pipelines is :

Russia is very keen to export hydrocarbons without sanctions as part of any peace deal

Ukraine would also profit from reopening their pipeline ,would be happy to reopen but not a deal breaker.

Europe is very divided on whether they should accept Russian gas again with some arguing the economic case is indisputable and others arguing it makes us hostage to Russia again/enviromental considerations

Trump is pushing to keep the pipelines closed as they are doing very well out of exporting expensive LNG to Europe, and reopening the pipelines certainly wouldn't help the trade deficit Trump is so keen to eradicate

acdoug

Thanks Graham

snodgrasse

SQZ. Check Directors’ dealings between February and September 2024. They filled their boots at a SP mostly higher than today’s. It strongly suggests that they thought that there is money to be made. Of course, they could not anticipate FPSO problems. I bought SQZ simply for the divi, thinking that I couldn’t lose much, given the low SP. From now on, I will check directors’ dealings daily. If one of them sells so much as a single share, I’m sold. Till then, I’ll hang on.

It's more complicated with REITS and Irish stocks as some tax is automatically taken at source. Look it up...

Thanks guys. It has always rankled with me, and I took the opportunity to get it off my chest. You're right, it is history, and the new Board looks good.

They HAVE returned the share price to what it was in 2018, although the PE is up 50% and the price and CAGR Book Value/share lie well down in the Insurance sector, but, as you say, their dividends have paid for a 2020 investment.

I have Helios Underwriting (LON:HUW) on my watch list [having invested just before the LA fires and sold] and think there may be other companies worth looking at in the sector. Good fortune go with you

topvest

On Assura (LON:AGR) I supect that the DCF valuation may exceed the EPRA valuation. Some medical property REITS used to disclose a DCF valuation as well which historically supported a premium to NAV. They don't seem to disclose it anymore. MedicX Fund which was rolled into Assura always used to disclose this and it was materially higher. Higher discount rates will have reduced the valuation, but it may still be above the NAV disclosed. That may explain the material difference the board are mentioning.

bohenie.

JSchoffer is right. Dividends in our ISA’s are all tax free and our investments in ISA’s are free of capital gains tax as well. Obviously that includes REITS. I’m wondering why you thought they were taxed?

Tim Boucher

Hi Ken, my SUPR divis are subject to tax at 20% initially inside my ISA, which is then reclaimed by my broker and credited 60 ish days later. Bit of a faff but could explain the perception of tax being deducted.

AcornInvestor

Any idea why the tax treatment is different to other shares?

I'm not sure why, but something to do with REITS - the blurb on the broker factsheet states 'Property income distributions (PIDs) are subject to 20% withholding tax. PIDs paid in to ISAs are tax exempt. The withholding tax will be reclaimed and distributed to ISA holders approx 30-60 days after the PID is paid'

19th Feb

Tim.

I’ve checked all our REIT dividends in our ISAs with H/L and ii this morning and every one was paid in full on dividend pay day as imo they should be. Until the posts here yesterday I had never heard of Commercial Property REIT dividends being treated differently to all other dividends in our ISAs.

£SUPR. See link below - scroll down to the bottom of page to read the blurb. Similar situation applies to Irish companies (i.e. all Irish not just reits)

https://supermarketincomereit....

ISAallowance

I have REITs with AJB and HL in SIPPs and I've also never had any tax withheld from PIDs. Maybe the large online platforms just take the hit for the 30-60 days until they can reclaim it because it's cheaper than fielding messages from disgruntled clients?

Daily Stock Market Report (Tue 18 Feb 2025) - AGR, SQZ, CGS, SLP, PLUS, BOWL, ELIX, TRT

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Graham Neary

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