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Alaris Equity Partners Income 5 50 convertible unsecured subordinated Debentures T.AD.DB

Alternate Symbol(s):  ADLRF | T.AD.DB.A | T.AD.UN

Alaris Equity Partners Income Trust (the Trust) is a Canada-based private equity company. The Trust, through its subsidiaries, provides alternative financing to private companies. The Trust’s operations consist primarily of investments in private operating entities. The principal objective of the Trust is to generate stable and predictable cash flows for payment of distributions to unitholders of the Trust. The Trust offers a range of services, which include services, healthcare services, industrial services, professional services, information technology services, and construction-related services. The Company’s investments are made through a wholly owned Canadian corporation, Alaris Equity Partners Inc., and its American investments are made through, Alaris Equity Partners USA Inc. (Alaris USA) and Salaris USA Royalty Inc. (Salaris USA). The Trust also has a wholly owned subsidiary in the Netherlands, Alaris Cooperatief U.A. (Alaris Cooperatief).


TSX:AD.DB - Post by User

Post by mickeymouseon Mar 24, 2021 12:32am
258 Views
Post# 32864260

Redemptions/conference call and payout ratio

Redemptions/conference call and payout ratioIf you listen to the conference call there are several comments related to the "redemptions" and the possible implications.  From the fourth quarter results it does mention that KImco and Federal Resources are evaluating possible moves but nothing is "IMMINENT".  This is also mentioned in the conference call comments and Alaris management is actively supporting the Kimco redemption as it would result in $20 million in deferred distirbutions coming to Alaris that they would have to wait years to collect without redemption.  A KImco redemption is viewed by management as a positive.

The Federal Resources redemption for $86 million is a slightly different story - FR has quadrupled their business over the last few years and has a very strong ECR so it is a stable and lucrative postion for Alaris.  The one positive is that this will provide cash to reinvest - from the last three months it is very apparent that there are numerous possible deals in the pipeline for Alaris and they confirmed this in the conference call comments.

The dividend was left at .31 for this quarter and sounds like it will stay there for the next quarter - the impetus for a dividend increase will be the restoration of full distirubutions from PFGP.  A comment was made that at the time of the call their membership numbers were improving week to week as more states reopen from the pandemic - the expectation is that full distributions will resume in July.

The current yield is close to 8% and their payout ratio is slightly over 68% - if full distributions from PFGP resume in July the payout ratio will drop even lower and they may revisit their distributon for Q3 - there at least two analysts predicting an increase in distributions later this year.

The common equity postions (versus the prefs only approach used in the past) Alaris is now taking in some of these companies has started to pay off and it has opened up many more deal possibilities which is definitely a positive development going forward.

The management commented on their frustration with the volatile trading price of their stock and they seem to be questioning whether the market share price will reflect a higher dividend - so the 70-80% target payout ratio they have mentioned in numerous previous calls may be changing.






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