URB Investments Limited

URB Details

Trading at Higher Level: URB Investments Limited (ASX: URB), a listed investment company, invests in a diversified portfolio of assets with exposure to urban renewal and regeneration. The company is managed by Contact Asset Management. Management fee is 0.50% of URB’s total assets and performance fee is 15% of the outperformance over a Pre-Tax NTA 12 month return of 8%.

Net Tangible Asset (NTA): Pre-Tax and post-tax NTA backing, both stood at $1.15 per share as at 30 June 2019.

Asset Allocation:As per the latest update, Direct property currently accounts for less than 20% of the total portfolio. The company has capped the investments in Direct upto 75% of the total portfolio.


Asset Allocation of the Company (Source: Company Reports)

Equity Portfolio Assets:URB has a concentrated portfolio of 30 stocks with a focus on Urban Renewal. The portfolio is diversified with sectors such as Real Estate, Healthcare, Consumer, Utilities, Building Materials and Industrials. URB avoids investing in banking and Resources stocks. As per the latest release on 12 July 2019, the top three holdings of the portfolio are comprised of Purt No 4, Transurban Group, and Sydney Airport with a total contribution of 9.0%, 7.7% and 6.2%, respectively. Top 20 holdings and cash & cash equivalents accounted for 94.3%.


Top 10 Holdings of Equity Portfolio (Source: Company Reports)

1H19 Performance: Company’s ordinary income for the period stood at $1,152,744 as compared to $1,304,531 in the corresponding period last year. In addition, special dividend income for the period stood at $12,977 as compared to $355,628 in 1H18. URB received $724,964 of special distributions from direct property investments which were nil in the corresponding period last year. The company recognised fair value gains of $3,928,146 on direct property investment holdings, resulting in total revenue from ordinary operations and special investment income of $5,818,851 as compared to $1,660,159 in pcp. In the period, the Equity Portfolio generated $982,814 in ordinary and special dividends and distributions during 1H19 as compared to $1,247,852 in 1H18.

Ordinary and special distributions of $855,837 were received from the seed assets in the Direct Property Portfolio from the earlier $337,141 on pcp with the Company earning an additional $52,054 interest from the cash portion of the Investment Portfolio.Operating expenses were incurred at $505,733 as compared to $453,054 in 1H18, resulting in an operating profit before tax of $5,313,118 against $1,207,105 in pcp.

Recent Updates:

The company updated that 360 Capital FM Limited as responsible entity for 360 Capital Total Return Active Fund, has become its initial substantial holder with voting right of 6.67%.

The company, on 29 March 2019, informed that it had issued 104,310 fully paid ordinary shares for the consideration price of $0.99 per share. The issue of shares was pursuant to the Company’s Dividend Reinvestment Plan (DRP).

Stock Recommendation: The stock has witnessed a rise of 19.90% in the last 1-year and 20.57% in the last 6 months as at 12 July 2019. At the current market price of $1.080, the stock is available at price to earnings multiple of 16.070x with earnings of $0.067. Currently, the stock is trading at a higher level of $1.080. Hence, we presume that the company’s stock price has discounted all the positive factors in the present market price and recommend a “Sell” rating on the stock at the current market price of $1.080 per share (up 1.877% on 12 July 2019).


URB Daily Chart (Source: Thomson Reuters)

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