Dolphin Capital Investors Q3 Update, Fund Raising
Edison | Dec 12, 2012 11:20AM ET
The recent €50m equity issue is a game changer, as it helps finance Dolphin Capital Investors’ (DCI) short-term business plan, should enable it to progress developments and improves potential to generate revenues from partnership deals and villa sales. Its plans for the initial phases of four advanced residential and leisure schemes attracted a new investor which contributed €30m of equity, as well as strong demand; four times oversubscription for available shares from existing shareholders. Sensitivities, other than construction risk, remain exposure to the Greek economy and international demand for luxury villas and leisure, although Aristo just reported its best quarter since 2007. New money will help secure two years of development, reduce potential for further NAV dilution, help unlock the value of early projects and provide breathing space to negotiate with JV investors. Adjusted for new shares and cash, Q3 NAV/share, net of deferred tax was 81p (101c), well above the current share price.
Strong Endorsement From New And Existing Investors
The commitment by new and existing investors is an endorsement of the business plan. At the core is completion of the first phases of four schemes under way in Greece, Cyprus, Panama and the Dominican Republic. If DCI can deliver these to budget and schedule, and hit sales targets revised for the current market, revenues should generate cash to finance subsequent phases of these developments.
Modest Visibility, But Financed For Two Years Of Development
DCI’s revenues are unpredictable, as they relate to sales of high-end apartments and villas, investment by partners and exits from existing schemes. However, the new equity provides valuable certainty regarding finance for its first four developments, which target distinct country markets and high-end buyers of luxury second homes.
Valuation: Share Rebound Reflects Lower-Risk Outlook
The c 60% share price improvement since the equity issue was announced reflects improved potential to deliver short-term development plans and achieve sales to second-home buyers, JV partners and other exits. However, the shares are still 68% below adjusted NAV/share, a substantial discount for risks associated with country (especially Greece) weighting and luxury second home markets. New funds reduce the risk of further dilutive issues and DCI will progress other projects through zoning, permitting, design and branding to bring them to advanced status and improve potential for cash returns. The strategy aims to bring DCI to cash flow positive status and enable it to return capital to shareholders via share buy-backs and dividends.
Get The News You Want
To Read the Entire Report Please Click on the pdf File Below.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.