Investors are being far too cautious with their valuation of Alpha Real Trust (ARTL:154.5p), a company that invests in high-yielding property and asset-backed debt and equity investments.
Alpha has just reported a 4.6 per cent rise in net asset value (NAV) per share to 213.7p and increased the annual pay out by half. The directors have also declared a quarterly dividend of 1p a share for the first quarter of the 2020/21 financial year. The company has a cash-rich balance sheet, too: cash accounted for £44.8m of NAV of £127.6m at 31 March 2020, and that excludes the £4.5m banked from this month’s sale of Alpha's Armouries development site in Birmingham.
The cash pile is set to climb further. That’s because Alpha’s investment in the Galaxia project, an 11.2-acre development in an established suburb of Delhi, India, is carried at £2.5m in the accounts, a fraction of the £9.2m Supreme Court order Alpha won against its development partner Logix. A third of this award has been lodged by Logix with the court and the balance will be released when the sale of the site completes. Alpha has a charge over the site and a purchaser willing to buy it for £6.1m. If the full award is recovered as now seems likely, it adds 11p a share to NAV per share and boosts Alpha’s cash pile to £58.5m (99p a share).