ray of hope for sunland

http://www.theage.com.au/money/investing/ray-of-hope-for-sunland-investors-20120328-1vynf.html

Ray of hope for Sunland investors
Matthew Kidman
March 29, 2012

One area advisable to stay away from in the market is property in south-east Queensland. Bank of Queensland investors had a rude awakening earlier this week about the woes in the sunshine state.

Opportunity though can appear in the darkest of corners. Sunland Group has a chequered history as a listed company with poor operational decisions.

Countering these has been strong capital management. Sunland has bought back more than 120 million of its shares at a big discount to the net tangible assets (NTA). This is a win for all remaining shareholders because the company buys its shares at a discount to NTA and then cancels them to boost the value to the remaining shareholders.
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Sunland announced another share buyback in November but is yet to pull the trigger. A tough first half robbed the group of cash needed for the buyback. The company is hoping for improved cash flow in the second half of the year as property sales settle.

If the company is able to buy 48 million shares under the buyback at about 70¢ a share, it will push the NTA per share from $1.69 to $2. That is creating immense value for shareholders. The catalyst will be an announcement by Sunland saying it has started to buy back its stock again.