Apparently they are one of the most conservative analyst in the...

Apparently they are one of the most conservative analyst in the country, but as i said before i have lost faith in Huntley i however do hope they are right in this situation.

A hold of upto $2.56 which is currently representing a discount of 44%.


Good to know that IOOF is becoming a sub holder, they have been agressive buyers of late, possible super funds returning or maybe a buyer? I won't be selling for anything less then $3 base on their NTA.

Good Luck all i'm holding long term, i'm also expecting another dividend next month, along with further IR cuts and news on their Hotel sales.



Investment Rating
GPT is one of Australia’s largest AREITs, being a stapled security comprising a unit in the trust and a share in the management company. GPT has three inter-linked business streams, each based on investment property, being ownership, development and management with assets in Australia, New Zealand, Europe and the USA. GPT actively seeks to recycle capital with development properties providing stock for ownership by either the trust or third party funds managed by GPT, with each stage generating fees. Earnings are grounded in relatively safe, steady growth revenue from the Australian investment property portfolio, with around 25% of operating income (December 2007) sourced from higher growth but riskier activities. Short term capital growth may be expected to be volatile, being influenced by the markets wavering confidence in management. GPT should be considered by income investors willing to bear high capital risk in the short term.


Result Description

* GPT has issued a half-year update for the period ending June 30, 2008, following their July 7, 2008 announcement of a significant downgrade in expected 2008 earnings.


* While GPT claim to be on track to deliver guidance, several key aspects are of concern. Expected bottom line income appears on track, but this currently reflects revenue around 6% below expectations offset by expenses around 17% below expectations.


* Distribution is 11.4cpu for the half-year, in line with previous guidance for 20.0cpu full-year.


* The July announcement anticipated a slight improvement in gearing by June 2008, but the half-year update indicates a deterioration from 36.3% (December 2007) to 37.3%. Interest cover plummeted from 3.9x to 2.7x.


* 20bps weakening in Australian office and retail capitalisation rates on revaluations were offset by rental growth, but the European portfolio was revalued down $70m or 16%. NTA fell 4.7% from $3.86 (December 2007) to $3.68.


Impact

* The half-year update questions GPT’s ability to deliver its forecast earnings and the saleability of the hotel and resort portfolio, further damaging the credibility of management.


* GPT closed today at $1.69 representing a forecast full-year dividend yield of 11.8% and a discount to current net asset backing of 54.1%.


* GPT should be considered by income investors willing to bear high capital risk in the short term.


Recommendation Impact (Last Updated: 03/09/2008)
Our recommendation is retained at BUY.