The AFR does not think that. It was the opinion of an analyst at Patersons when choosing a small Reit. Given there aren’t that many small Reits alive, he didn’t need to choose from many.
As well his opinion should be almost completely ignored given the fees Patersons earns from Aspen.
A more balance view of Aspen is as follows:
1. Aspen has not grown the net worth of it’s business any greater than the capital it has raised over 5 years eg Circa $380M.
2. Aspen pays its two main Executive Directors an unjustifiable level of remuneration.
3. The analyst is plain wrong on gearing, he needs to stop believing the Aspen presentations and pick up a calculator. Aspen’s gearing level is only at the figure he states if you take the rubbish assets into account. Eg Investments in the almost insolvent Diversified Fund and the value of its loans to such entities etc etc. Try working out the level of debt against the real estate security the banks actually take as security. They have come from “breach” (close to disaster) to a much more comfortable level. However the analyst, like yourself, fail to understand that commercial property has lost a further 10% since 31/12/09 valuations and are expected to shed a further 10% by calendar year end. I wouldn’t be getting too excited about the mythical Aspen Gearing levels.
4. If the near death experience of the group is not bad enough we have to grapple with the literny of corporate governance issues. Do you really want me to revisit this history or is the current inexcusable loans to directors that are currently being funded out of other shareholders equity enough of an example? So Aspan has now expanded its ever increasingly bizarre business model to include margin loans to directors? Before you get all sniffy at my “margin loan” label for these loans, I ask you to ask yourself this? Why would you borrow $7.5M from Aspen at say 8.3% when you can borrow the funds using “real estate security” for 5.5% from a bank? The answer of course is that there is something wrong with the security being provided. (is it the type, the amount or what?) Why wouldn’t a normal lender touch them? Why wouldn’t a specialist lender which charges a higher rate (say 6.5%) like La Trobe or Liberty or Peppers touch them? As usual the two slicks offer up half the story for the likes of you Monarch, to swallow with glee.
5. With the exception of the Parks Fund, it looks like every business unit is tanking.
6. Just about every “Guidance” release that this company has made to the ASX over the past 12 months has later to be shown to be utter %$#&.
I could go on but I think I have made the point.
Why would you put money that demands respect into this company’s share’s based on its track record.
APZ Price at posting:
34.5¢ Sentiment: None Disclosure: Held
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