The growth of Macau - the Las Vegas of the east - continues to reward London-listed developer Macau Property Opportunities (MPO). Occupancy has fallen marginally at the Waterside, a luxurious block of flats that accounts for nearly half the company's book value, but rental growth remains strong at 15 per cent year on year. Tom Ashworth of Sniper Capital, which manages the investment fund, says he will continue to prioritise rental growth - which drives up the building's value - over full occupancy.
The company's portfolio rose 6.5 per cent in value over the latest six-month period. Adjusted book value per share (NAV) - which marks trading properties to market value - increased by 6.2 per cent in dollar terms to 319¢ (210p), boosted by share buy-backs. Macau Property purchased and cancelled 7 per cent of its equity capital over the period. Mr Ashworth vows that Macau Property will not use its ample cash resources for any other purpose while its share price remains at a 35 per cent discount to underlying book value.
Disposals can help to close discounts, but Mr Ashworth insists that now would be too early to sell the Waterside. "The next four years are going to be the most exciting for Macau yet," he enthuses, pointing to major casino construction projects and a bridge to nearby Hong Kong due to open in 2016. He does, however, hope to offload a smaller residential development called the Fountainside to owner-occupiers when it is completed this spring.
MACAU PROPERTY OPPORTUNITIES (MPO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 136p | MARKET VALUE: | £129m | |
| TOUCH: | 135-137p | 12-MONTH HIGH: | 138p | LOW: 99p |
| DIVIDEND YIELD: | nil | TRADING PROPERTIES: | $62.4m | |
| DISCOUNT TO NAV: | 8% | |||
| INVESTMENT PROPERTIES: | $240m | NET DEBT: | 40% | |
| Half-year to 31 Dec | Net asset value (¢) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 210 | -1.20 | -1.17 | nil |
| 2012 | 225 | 3.24 | 3.26 | nil |
| % change | +7 | - | - | - |
£1=$1.52 | ||||
