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We are lacking a couple of traditional operational metrics with which to evaluate Klépierre’s overall performance in the Q1 23 but inflation is playing its role and vacancy was stable sequentially.
Companies: Klepierre (LI:EPA)Klepierre SA (LI:PAR)
Significant positive one-offs supported consolidated FFO in FY 22. Reported FFO per share should be down c.10% in FY 23 yoy even if +5% positive at the recurring level. €2.35 in FY 23 would mean remaining significantly below the FY 19 level of €2.79, nevertheless.
After persistent volatility for the top-line in Q1-Q2 22, Klépierre’s performance now looks to be progressively stabilising as it benefits from the rising contribution from inflation.
The guidance was raised due to positive one-offs. Vacancy stopped improving, thus confirming the stabilisation since December 2021.
Klépierre addressed the thematic of consumer spending while confirming its guidance. The H2 21 recovery in occupancy stalled in Q1 22.
Due to its own positioning (more global than local), Klépierre’s recovery should be strong in H1 22, for technical reasons first: sure, a favourable base effect will help. There are still a couple of quarters before landing in full.
Business is about to normalise progressively. The rent collection rate should soon be back to its usual pre-crisis level and new rent abatements are now targeting zero.
Despite a slower recovery that one could have expected in 2020, values were resilient in H1 21. The c.4% p.a. was half the FY 20 degradation pace. Even if we question the roughly stable appraisals, the fact is that the released figures were reassuring.
Klepierre confirmed other players’ views: shoppers are back in the shops as from reopening, targeting 90% of 2019 retailers’ revenue. No strong consumption catch-up (i.e. sales above 2019 levels) was observable to date, nevertheless. Klépierre’s shopping malls should reopen in full as from mid-May.
The company’s FY 21 guidance wasn’t that aggressive in assuming a lower FFO per share. Is this because some non-recurring items could be considered as recurring?
Prior to the impact of further lockdown measures adopted in early Q4 20 across Europe, Q3 20 was stabilising vs. Q2 20. Both tenant revenues and footfall were stabilising at c.10% below their 2019 levels. The good news, however, was that rents did not collapse in Q3 20. The question remains whether this recovery will be sufficient to avoid a recap. March 2021 (annual figures, including values) will at least provide the answer.
Companies: Klepierre SA
The negative revaluation of 2.8% vs. December 2019 demonstrates a c. 6% annual pace. Valuers warned that valuation “could” adjust strongly in H2 20. Consumption was far from having fully recovered in Klépierre’s shopping malls in June 2020. Please wait.
The Q1 20 figures from the old world were unsurprisingly good with a stable revenue, lfl. As Hammerson confirmed today that Orion decided not to buy its £400m retail parks in the UK, we can assume that all other players will experience some difficulties in selling assets in the coming quarters. How will Klépierre’s balance sheet react to the crisis?
Erosion of Gross Asset Value was 1.1% in H2 19 (at constant perimeter) and 2% over FY 19. Don’t wait for a strong share price rebound but annual dividend yield looks safe (c.7%) as the retailer’s sales stand in positive territory (+1.8% for FY 19).
Except for France (36% of revenue) at +0.7% lfl, stable below inflation, the bulk of Klépierre’s tenants revenue showed an acceleration all over Europe. The key accelerations were located in Germany, Italy and Scandinavia.
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Companies: Duke Royalty Limited
No change in the narrative. Aviva’s ship sails on as usual. The PRT business is still going well, inflation remains an impediment to a strong P&C improvement, retail customers seem more interested in the rising cost of living than savings’ products and Aviva investors see no real signs of an improvement.
This is the same story as in recent quarters and, in that context, our thesis remains the same.
Companies: Aviva plc
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On the 15th May, Critical Metals plc released an operational update relating to their
Molulu copper project in the DRC.
1. 6,500t of copper ore grading 3% copper has been mined
2. The mining focus is moving towards the high grade sulphide copper ore grading
above 8.3% copper
3. No cobalt has been identified in the mining so far using hand-held XRF
4. Dewatering of the pits has begun with a trench decanting water from the small
As soon as the road rehabilitation
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Duke has released a Q1/24E trading update which points to a continuation of steady growth in recurring cash revenues and resilient underlying portfolio companies. Guidance for the quarter is for £6m of recurring cash revenues, and total cash revenues are expected to be c£7.5m once the buyout premium from Instor is accounted for. Duke's valuation looks very compelling at current levels with the FY24E dividend yield over 10% whilst being backed by FCF generation.
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Trident Royalties Plc (AIM: TRR) has, this morning, announced the acquisition of two royalties and a production-linked milestone payment over the La Preciosa Silver Project, owned by Avino Silver & Gold Mines Ltd (TSX: ASM, mkt cap US$87m) in the State of Durango, Mexico. The consideration consists of US$7m cash to Coeur Mining (NYSE: CDE, mkcap US$1.1bn) on closing with a further US$1m in either cash or shares at Trident's election upon receipt of the milestone payment. The acquisition is Tride
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Higher rates and increasing leverage justify a higher discount
Some of the de-rating from the past 5Y average premium of 6% is justified given the magnitude of the increase in bond yields. HICL has only raised its discoun
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BNP Paribas Exane - Sponsored Research
BSF Enterprise Plc (BSF) is a biotechnology company focused on acquiring, combining, and building businesses in the lab-grown tissue space. It aims to achieve this through an acquisition-led growth strategy and has already acquired the tissue engineering and cellular agriculture company, 3D Bio Tissues.
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