Well the Q2 is now out and I am happy with the results and insight from Management
- Reporting: It is very helpful that they have now included Segment earnings and FFO of the divisions. I would like to think they finally listened to shareholders about this.
- Capital Allocation: We are seeing further clarity regarding capital allocation and the sale of REIT & Investment properties ("We continue to monitor our asset holdings in all operating divisions"). Let's see how much the Saskatchewan properties are worth when the sale occurs. They are sending the right signal and I think that the days of hoarding underperforming properties is coming to an end.
- US Properties: Harmony finally sold down 84 lots for $16.44 million which indicates a price of $195k per lot (in $CDN) or about $144k USD per lot (49% Gross Margin).
- Cap Rates: There wasn't much included on this. Perhaps a battle for a different day (year end).
- Dividend Payout Ratio: The payout ratio ($0.16 per quarter) is still well below 30% as measured by FFO ($0.56 per Q2) and
Book value per share is now $38.32 (with the reminder that the land is held at acquisition cost). At the current price, the P/BV is 0.30X. My prediction is that we will see a special dividend within the next 18 months based on the capital they free up disposing investment properties.
Curious to hear the thoughts of other!
LR