2nd Chance Properties

[camelking]

getting crowded ....this company......hahahaha

[CityFarmer]

But, new shareholders will suffer if their earnings are unable to catch up with the new nett increase in number of shares. For eg., DPS,

FY10 = 3.8ct (331,554,249 shares)
FY11 = 3.2ct (458,184,969 shares)

The increase in shares was due to a 1 for 4 bonus shares issue. This have negligible impact on the absolute dividends collected by shareholders. If not for the bonus issue, the DPS for FY 11 would have been 4.0 cents ie an increase.

(Not Vested)

Yes, you are right. Old (loyal) shareholders would be reaping their rewards in terms of higher absolute dividend payout from both the bonus issue and the exercise of Wrt13.

The point I wanted to highlight to new shareholders (like me) is that the DPS is likely going to be lower. Even in FY11, there was a 10% increase in the number of shares from exercise of Wrt13. For FY12 todate, >20%. So, unless the earnings can catch up (with the share base increase), there's a very high likelihood that DPS will be lower. That's one of the risk any potential shareholder need to consider and not just rely on prior years DPS...

Yes, old shareholders are rewarded handsomely.

For new shareholders, due diligent needed base on the latest outstanding shares, EPS and of course DPS.

I got in @ $0.38, with free warrants. I am expecting DPS of 3.3 cts, which is more than 8% yield (excluding the free warrants). Even the DPS drop, the yield should stay above 6%.

Exercising of warrants will inject new capital into the company, thus increase the return. The dilution is difference with bonus issue.

[Nick]

If I am not mistaken, the take up rate for the scrip dividend is very high.

AR 2011 pg 17:

It is true that the more cash you distribute, the less you have for growth. We have overcome this problem by adopting the Scrip Dividend Scheme, with which more cash will be retained if more shareholders take up scrip. The controlling shareholder and present CEO have committed himself to opt for scrip on a permanent basis. Results from the recent Scrip Dividend Scheme FY10 showed that only 8.67% of shareholders opted for cash dividend.

Shareholders who opt for cash dividend may face dilution in DPS if the Company cannot utilize the proceeds effectively. Historically, the Company managed to raise DPS despite issuing bonus warrants and scrip shares - clearly, they have a track record and shareholders who opted for scrip would have benefited from the compound returns. New shareholders will have to decide whether can the Management continue to deliver - in some sense, this isn't unique as it should be asked for any company !

(Not Vested)

[KopiKat]

If I am not mistaken, the take up rate for the scrip dividend is very high.

AR 2011 pg 17:

It is true that the more cash you distribute, the less you have for growth. We have overcome this problem by adopting the Scrip Dividend Scheme, with which more cash will be retained if more shareholders take up scrip. The controlling shareholder and present CEO have committed himself to opt for scrip on a permanent basis. Results from the recent Scrip Dividend Scheme FY10 showed that only 8.67% of shareholders opted for cash dividend.

Shareholders who opt for cash dividend may face dilution in DPS if the Company cannot utilize the proceeds effectively. Historically, the Company managed to raise DPS despite issuing bonus warrants and scrip shares - clearly, they have a track record and shareholders who opted for scrip would have benefited from the compound returns. New shareholders will have to decide whether can the Management continue to deliver - in some sense, this isn't unique as it should be asked for any company !

(Not Vested)

For FY11, 16.2% opted for cash.
DRP is at 10% discount, so IMO, it does make sense to opt for DRP.

---

I am expecting DPS of 3.3 cts, which is more than 8% yield (excluding the free warrants).

Your expected DPS = 3.3ct was provided as a Dividend Guidance on 7-May. I know someone else who's vested and was told about this guidance, so I went to check.

[CityFarmer]

I am expecting DPS of 3.3 cts, which is more than 8% yield (excluding the free warrants).

Your expected DPS = 3.3ct was provided as a Dividend Guidance on 7-May. I know someone else who's vested and was told about this guidance, so I went to check.

Yes, the guidance is issued on 3rd quarter report, which is close to full year result. Base on the historical record, it should be reliable.

With the change of financial year in FY2012, probably more DPS will be awarded due to >12 months period covered.

[CityFarmer]

The management continue to buy-back share, almost on daily basis

Up to today, total bought back already approaching 20 Mils share, representing 4.19% of total outstanding share as the last mandate.

The management had spent $7-8 Mils on the buy-back so far, will it be able to continue?

[Nick]

The way I see it - Second Chance shares are probably yielding higher than most of the listed REITs at the moment so the Management might have deemed it more prudent to 'invest' in its shares instead.

(Not Vested)

[sportsinvestment]

True. That is how I always found it with REITs, and I invest in them often (although not so much recently).

[money]

The management continue to buy-back share, almost on daily basis

Up to today, total bought back already approaching 20 Mils share, representing 4.19% of total outstanding share as the last mandate.

The management had spent $7-8 Mils on the buy-back so far, will it be able to continue?

Yield of 2ndChance is around 8%. Management can always sell reits that it owns (those currently yielding less than 8%) to buyback its own shares. And it makes a lot of sense cos most of the reits in singapore are more leveraged than 2ndchance

[CityFarmer]

The management continue to buy-back share, almost on daily basis

Up to today, total bought back already approaching 20 Mils share, representing 4.19% of total outstanding share as the last mandate.

The management had spent $7-8 Mils on the buy-back so far, will it be able to continue?

Yield of 2ndChance is around 8%. Management can always sell reits that it owns (those currently yielding less than 8%) to buyback its own shares. And it makes a lot of sense cos most of the reits in singapore are more leveraged than 2ndchance

The management had reduced the holding on properties recently, there is still "Property held for sale" of $10 Mils to be disposed (as in Q4 result). So probably we might see a pause after the $10 Mils is exhausted.