Pour ceux que ça intéresse, je mets ici quelques points qui m’ont paru intéressants lors la conf call d’Artis du 2 novembre. Je passe sur la lecture du document de présentation aux investisseurs (par ailleurs très intéressante).
À propos de l’ampleur de la coupe de dividende et du processus qui y a conduit :
Jonathan Kelcher
Thanks. Good afternoon. The first on the size of the distribution cut. How did you guys come around to the 50% number?
Armin Martens
Yeah, it didn’t happen in one day. There were two perspectives, one is, do we right size the distribution and carry on or do we elect for a more and more significant cut, we decided on a more significant cut that will give us some good positive cash flow that we can use to grow. And in terms of growing, it’s not just about funding our development pipeline, but it’s about buying back our units and paying down debt. So we landed on a bigger cut instead of just rightsizing, rightsizing might have been anywhere from 20% to 30% cut, 50% is a large cut, but it sends a good message we feel to investors that our payout ratios always save. We’ve always got positive cash flow, we’ve got flexibility now for unit buyback, flexibility for debt to pay down, we’ve got a lot of options on the table now to create NAV growth, so that’s –and then we did some modeling. We modeled 44% cut, 50%, 56% cut, obviously the higher cut the more you can do with the money, more accretion you can generate, but we landed on the 50% cut in that way.
Dean Wilkinson
Thanks. Hey, everyone. Armin, if I could just follow along with the lines of Jon’s question there. Looking at the distribution and obviously things have changed. But from last quarter, you kind of did make the comment, 14 years we’ve never contemplated a cut, we’ve increased it twice. Have things materially changed that much since August to now and you’re seeing a larger deterioration or was - help us sort of get from point A to Point B there?
Armin Martens
Yeah its - I mean last 90 days, I guess it started in July already, but we saw our units trade down a lot aggressively. And all of a sudden, we find ourselves in October trading at an 8 year low and we noticed and of course the Central Bank have come out and with hawkish narrative and bond yields are trading at an 8 year high, that happened very quickly.
In addition to that, Dean, we got a lot of inbound calls from combination of investors and analysts suggesting that they want more clarity from Artis on its strategic direction and how we’re going to grow back or get back into payout ratio those was under 100%. And we could highly - couldn’t answer those questions well during the last quarter. We brought this to the Board’s attention I guess twice in the last two weeks. And then the Board landed on this decision turns a new strategic initiative.
À propos de l’exécution du programme de vente :
Jim Green
And would need to move very quickly on the asset sales today, with the exception of the multi-family sites that still need these zoning to come through before we can really sell them at the maximum value.
Armin Martens
Yeah, we really think we can do the bulk of this in less than three years.
À propos des rachats d’actions :
Dean Wilkinson
And then last question for me is, did you anticipate in your model that entire 600 million of net proceeds going towards the share buyback or how much of you penciled in there?
Armin Martens
No, not all of it, we’ve got 270 million roughly in the model budgeted for unit buyback and then the rest for our development.
[…]
Howard Leung
And I get the NCIB right now, you’re allowed to kind of buyback 130 million in total for the year or so, is that the 270 million will be split between two years?
Jim Green
Yeah, it’s not quite because the NCIB also allows, there’s one block trade a week allowed in addition to the maximum NCIB number. So hard to see where that gets depends on the size of the block trades, but you get one exemption a week for a block trade.
Nous aurons donc un programme de rachat d’actions pour 270 millions. Ce n’est pas négligeable pour une société de 1500 millions de market cap.
On apprend par ailleurs que les perceptives sont toujours pas terribles à Calgary (ceci expliquant peut-être une partie du changement de stratégie) :
Armin Martens
It’s going to be lumpy. We’ve got some good news coming from markets, but we think our Calgary office vacancy will increase. And our Calgary office NOI will decrease before - next year before things get better for us there.
Enfin, l’agitateur du jour fut… un analyste non identifié.
Unidentified Analyst
Just to be a little bit controversial. As one of your alternate strategies, did you ever look at Artis REIT from the perspective of an investor and ask yourself what would be the investors’ return if you were to sell everything and distribute to current unit holders?
Armin Martens
I’ll give that some consideration in terms of a strategic review if you will and which wasn’t for me undergone. And there’s two directions one is you sell the REIT and - to the best maximum price you can get another as implement a new strategic plan. And our largest shareholder that owns 11% of our units is on our board, our largest shareholder as well as other - all of the board members unanimously were of the opinion that now is not a good time to pursue selling the REIT or selling all of the real estate and shutting down. They think we’ve got a good plan here, a good opportunity to increase value, increase unitholder value, increase our NAV. The idea of selling the REIT, entertaining office for the REIT, it can always be revisited at another date, but - so that’s not the direction. The board unanimously agreed that the best way to maximize unitholders value would be to implement these new strategic initiatives.
Globalement, j’en retire une impression positive. Le management sait rendre crédible son objectif de croissance de 4% de l’AFFO et de 4,5% de la NAV par an. Il semble décidé à adopter un comportement profitable à long terme pour les actionnaires. Des doutes persistent pourtant quand on se souvient que ce même management déclarait ne pas avoir besoin de couper le dividende…
Déontologie : je détiens une position acheteuse/vendeuse sur une ou plusieurs société(s) listée(s) dans ce message.
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