Ann: FY24 Appendix 4E & Annual Report, page-7

For what it is worth, my attempt to look into the future.

TGP/TOT have been smart operators in the past but have completely stuffed up this time around for shareholders.

Cannot see how they can add value except by selling properties at near book value, even if they were able to lift occupancy from 92 to 98% that would only add $800 to $900k, an EPS increase of 0.39cps

Provided there are no more equity raising / dilutions, operational EPS with some DRP to help out should just sustain a dividend of 3cps. At 39c the dividend yield would be 7.7% plus for the next 2.5 years dividends could be fully franked to give a grossed up yield of 10.9%. Not to be sneezed at.

Like timbowls I am interested in what the game play could be

• try selling properties at or near current valuations (unlikely as management are very driven by their fees)
• wait out the next couple of years
• for interest rates to drop (a 1% drop on $73.4m is worth $73.4k, a 2% drop is $1,468m or 0.66cps or a 23% increase in EPS - not insignificant)
• does not appear to be any opportunity to significantly increase rents over the next 5 years so we are stuck with the 3.1% annual increases
• taken from P14 of the presentation "Economic rents significantly above market rents, likely no new supply in the medium term leading to face market rental growth". Not sure how TOT can take advantage of this when most rent reviews are fixed and most of the expiry dates are 2028/29 and into the early 2030s.
• Construction inflation is over 30%, so values of A grade properties should also rise all be it by a smaller amount. But encumbered by rents that are fixed in relatively long term leases will further dampen property
• raise more capital to buy into new properties - probably not for a few years in the hope people will forget
• ????

IMHO if think management will wait, if RBA cuts the cash rates by 2%, term deposits will drop to 2.5 to 3%, people will move up the risk curve and be happy to buy TOT at a dividend yield of say 6.5%, adding in benefit of 2% drop in TOT's interest rate then EPS would be 3.66cps. The a rough share price of 58c.

The TGP 2024 presentation shows the Balance Sheets has TOT $50.3m (does that include equity and loans?) but TGP is listed as holding 39.52% of TOTs shares which were valued at $32.56m on 30/6/2024. Can anybody explain the discrepancy?

Interested in comments, mistakes, etc

Cheers