Cheap as Chips

lse:inl

#1

I’ve bought back in here today is I believe these are fairly valued assuming Armageddon for them of not getting planning permission on half their sites and a collapse in property prices and as cheap if things are better than this.

Jacko


#2

And a pretty good prime site purchased yesterday; hopefully uncontaminated (except by Tesco!)


#3

I tend to agree. I’m just wondering how cheap I can get in to average down as I am now underwater with my current holding (not counting money made on trades previously).

I wonder how much its commercial rental part of the business model is pulling down the share price?

Given the 25 year leases made to the likes of Supermarket convenience stores (the only growth area concerning supermarkets), I would have though the growing rental revenue would help it through any faltering in other parts of the business during the current uncertainty. those parts being mainly planning permission consultancy, selling land with newly gained planning permission and a small number of completed properties per year (from memory around 250?).

I give a weak buy to reflect my current wavering on the subject.


#4

most of the rental income comes from the houses on the Beaconsfield estate.
That should be safe


#5

Tom WM, “most of the rental income comes from the houses on the Beaconsfield estate.”

I never realised that Tom, Thanks for bringing my attention to it…

I think I may have confused INL with ESP, a REIT in which I am also invested, which is focussed on student accommodation rentals, but which often incorporates retail space for rent within the ground floor of its accommodation blocks.

This from the last INL trading statement (6 months to Dec 2015) is pretty clear about the situation:

"The gross rental income from commercial and residential assets at the end of the first half was £892,000 (2014*: £331,000), with the increase predominantly driven by the rental of the houses at Wilton Park, Beaconsfield. Annualised rental income is now at its highest ever level of £2.3 million and it is intended that this will go some way to underpinning the operating costs as the business expands in the future. In this regard, we are pleased to announce that since the period end we have pre-let a 4,500 sq ft neighbourhood convenience store at RAF Stanbridge in Leighton Buzzard, which is due to open in September 2016, to Co-operative Food on a 15 year lease with upward only, RPI linked, rent reviews at a rent of £68,000 per annum. "

Although housing companies have had a good couple of days, I still feel there will be further dips in share price, possibly throughout the summer until a new P.M. is in place at least, in September. By then we should have a much clearer idea of how Brexit has affected housing sales - if at all, though I think it must do from the general level of uncertainty if nothing else.

There should also be a final year report from INL around that time, which will probably have an update on the situation leading up to, and post, the Brexit vote. The trading update due (I think) later this month may be too early to get a proper read on any impact.

Due to INL’s relatively low average selling price and their close work with local authorities, a slow down in the general housing market might well be in their own sales interests, although would impact land sales presumably.

Come what may, I hope to purchase more INL at perhaps a little under @50pps and have a limit order set to try and catch a low intraday price.