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Valuation of $2.15
stale
Added 3 years ago
Simple Earnings multiple of 15
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#Participate in cap raise or no
stale
Added 3 years ago

I already hold this in real life and am deciding if I want to add more to the portfolio through the capital raise 

Has been a good performer so far (27% PA) for what I intended to be a slightly riskier REIT / Property play than your standard commercial / industrial plays.  

I like the thematic that a data centre is a long term asset which will have demand well into the future.  

Management has been strong to date and I think the departure of 360 Capital is nothing more than its not really where their strategy has them focussed anymore and they want to cash in after setting it up.  

The capital raise is not significant discounted at the moment ($1.93 vs $1.95) so monitoring the share price now in the run up to having to decide by Fri 8 OCT if I participate or not.  I was intending to add to it prior to the announcement of the capital raise and am just waiting to seee the most efficient path.  I currently have an order in the system and waiting to see if it hits.

My simple valuation  of $2.15 is based on an earnings multiple of  15 which I believe is a reasonable multiple for a small and relatively illiquid developer / property manager in a high growth property area.  I expect it will start to get more attention as it continues to grow and I am looking at a 5yr+  investment timeframe as it is in my SMSF. 

I expect there will be more capital raises ahead.

 

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#ASX Announcements
stale
Added 3 years ago

Boat, racing car, tax bill – there are often good reasons, however, when 3 of 4 directors offload the entirety of their holdings and then there is a capital raise I scratch my head. 

360 Capital, which announced last month they were offloading their holding which accounted for a third of the GDC script. The directors are all with 360 Capital which will be the explanation. 

The summary is the divestment and the cap raise probably should not be linked. 

That said, Macquarie has also exited their holding. 

This is a sector that has legs, the market maintains strong growth prospects both hosting public and private cloud. 

The capital raise, is expected to generate $42M, is to be used for “strategic investments” with no other detail although this is basically the business. The group invests in and have data centre interests in Asia Pac as well as Europe both wholly owned or in JV arrangements. 

The other couple of straws here are worth reading. Pat has a more detailed and balanced view than mine – especially the benefits of 360 Capital exit, rather that it being a red flag.

 

 

 

 

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#why the run
stale
Added 3 years ago

No longer a passive distributor of earnings - an operating business that retains earnings for organic growth, but watch the ev/ebitda gap vs peers close (a discount will persist for size of course). Tribeca and Regal have taken up 10m shares between them at $1.93. Both catalyst hunting operations. They are looking at that gap I'd think & I'd also think that some conversations behind closed doors are pretty close to the wind. I'm in this one in 'real life'.

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