Plough I dont think they are permitted to even consider your question.
My reading (and viewing) of Grady's behaviour was that he was very confident of recovering net book value over time and that the market will learn to see that they can liquidate an illiquid asset but that it will take a few years.
My only concern is what he did not say and that was would the recovery include the costs associated with selling these assets. That meaning that he has to pay for a development team and is that a cost that wont be recovered and therefore the value of the land in todays money is lower and in fact you have to discount back the money you will receive in a few years anyway.
That is why I value the Net asset value below the value placed upon it in the financial statements by management. As a developer they don't have to take these items into account as they are ongoing parts of their business as developers.
My biggest concern and only one that i have recently started feeling is that I think the market is looking to climb back towards the highs of 2007/8 and whilst all boats rise in an updraft I don't think they all catch the wave - I am really thinking that this stock will underperform the rest unless there is a real development towards its objectives. I also don't think that Mulpha have the resources to wave a magic wand given all of the assets they are also developing. For real change to happen I think they have to just wait this out but that will mean that we could lose a lot of upside elsewhere whilst that happens and I think it will continue to make this share underperform - I just wish they could raise a bit of funds and resume distributions - it would change the game plan in the short term.
By the way I also studied a long time ago - However I dont think that is bad I think accountants have been trying to make financial statements more meaningful and as an unintended consequence I think they have become less meaningful. The number of businesses that now have internal measurements that dont come from the financial results grows each year. Look at infrastructure assets , then look at BBG and the likes and ask yourself if our reporting is so much better why are there these huge revaluations or devaluations and a whole lot of failures where the financial picture differs so vastly from the previous published one because you change assumptions - really are they more representative of the real picture or just more technically correct as a snapshot which has vague reference to what the future will hold.
I think that there will be a solution here but I am hoping that that is on the back of some innovative restructure ideas.
FKP Price at posting:
$1.19 Sentiment: None Disclosure: Held
