just looked at this stock this afternoon due to its tanking...

just looked at this stock this afternoon due to its tanking traderman. Reading the annual report I have a number of concerns:

Their investment model relies on asset sales to pay distributions and all 'profit' is based on paper asset valuations. Indeed net rental income after running costs was 75m for FY07 versus interest payments owed on its rental property of 105m. In otherwords RRT had a net 30m cash outflow before asset sales or equity raising. This should have been apparent to all just based on its annual report but it seems it is only the announcement that it cant make its intended distribution until an asset sale that has made the market realise that future distributions rely on property sales.

On paper its NTA look great: 2442m assets vs 2021m debt, primarily made up of 2053m property portfolio against which there is 1947m debt. The problem is the NTA can only be realised for shareholders via property sales. Management have already had one 'restructure' and don't seem to keen on giving up their far too generous management and performance fees by reducing assets under management.

Quite why the sale of 'Mt Gravatt' has been held up who knows but RRT have flagged that even if they do achieve a quick sale they don't intend on paying the 5.5c distribution they flagged only three months ago. That in itself should give pause for thought particularly as their stated reason is a very vague 'due to market circumstances'. If they were confident of being able to pay distribution into the future they wouldn't cancel them as they have done.