Posted in Idea Update, Mid Cap, UK Update for CSP – Activist Built 9.4% Position – Spin-Off of the Housebuilding – New Chairman – New Mandate Maxim Bogomaz posted on January 2, 2021January 2, 2021 No Comment Browning West, the third-largest shareholder in Countryside Properties PLC, with a 9.4% stake started to take activist actions in CSP. The activist wrote letters to the board, demanding to immediately appoint Browning West's CIO, Usman Nabi, to the Board, replace Countryside's Chairman and task the New Chairman with a mandate to "Let Partnerships Prosper". Read More
Posted in Idea Update, Mid Cap, UK Update for CSP 3Q 2020 – Equity Placing – Partnerships Growth – Shares Went Down ~20% Maxim Bogomaz posted on August 12, 2020August 13, 2020 1 Comment CSP decided to make an Equity Placing to raise £250m. The number of issued shares amounted to 16.6% of ordinary shares. The market took this negatively, and the stock went down 20%. Price decline should be considered in the context that the housebuilding industry went down as well, but not as significantly. This post will address what capital raise and Q3 update mean and how it impacts my thesis. Read More
Posted in Investment Idea, Mid Cap, UK Investment Thesis: LONG Countryside Properties (CSP LN Equity) Maxim Bogomaz posted on July 15, 2020August 12, 2020 No Comment CSP is a compelling long (~2.4x return / ~18.5% IRR over a 5-year period) due to a strong combination of macro tailwinds (undersupply of housing) and company-specific factors. The company has two businesses with very different financial profiles (ROIC, margins, asset turnover), and Mr Market does not see outstanding unit economics of the better business … yet. This, in combination with COVID and Brexit uncertainties, created a fantastic buying opportunity. The first business is a traditional housebuilder with 25% ROIC and modest growth. The second business is a true gem: capital-light urban regeneration business that develops houses for local authorities with 50%+ ROIC, 8+ years revenue visibility and a multi-year growth runway. The Housebuilding business should be valued at ~5x EV/EBITA 2021 in line with public peers. Then, the gem business is available for purchase at ~9.3x EV/EBITA 2021, which is just far too low for a 50%+ ROIC business with a long growth runway. Read More
