Andrew Peller Ltd T.ADW.A

Port Moody update

[Stonksonlyup90]

Interesting disclosure in Note 10 on Port Moody.

I assume they are getting close to transacting. Good move to save on the taxes. I don't know what value the land is on the books for, but $4m of current income tax implies a gain of $32m ($4m / 0.5 TCG / 25% tax rate)

[Jonathan9]

Good catch. I believe this will be a catalyst along with lower interest rates, and improving business fundamentals.  Use it to repay a big chunk of debt, potential for a small bolt on acquisition for opportunistic growth and keep a higher level of cash on the balance sheet. 

[Jonathan9]

Investor presentation says $50M+ First time I've seen a number presented. I expect they are now pretty confident in that estimate. Investor presentation is well done in my opinion. Definitely an emphasis on asset value. My estimate of fair value is $8-12 per share.

[Stonksonlyup90]

Thanks for highlighting, i didn't realize we had an uodated investor presentation. i like the emphasis on "near term deleveraging". Long overdue and should help to strengthen free cash flow by unlocking undervalued assets and paying down debt. $50m for Port Moody is right around expectations that they have been guiding to for over a year.  

[Puma1back]

Thanks for the reminder to not forget that the corp web site needs to be periodically checked . the confusing part imo is how PWC could sign off on last year's statements disclosing that all of the lands owned by the corp are part of the assets in operational use when clearly much of the $41 m of land value relates to a non-core parcel of land being rezoned for condos? That is rubbish and

[Stonksonlyup90]

@Puma1back  This APL land in Port Moody has been held for decades. It would be on the books at Book Value, can't write it up to Fair Market Value per accounting standards. Therefore it's extremely trivial as to value on the statements, value/gain will be recognized when sale occurs.

[Puma1back]

I don't think the book value is that low Stonks - they triggered the tax transaction pre- capital gains increase. The taxes on the gain were only $4 million which implies a gain under $20 million. I can't believe when they rolled the land down they pegged a price other than fair value.  Anyway,  if you google the address it looks that whatever business is renting the land has