{"id":257472,"date":"2025-05-26T05:00:09","date_gmt":"2025-05-26T05:00:09","guid":{"rendered":"https:\/\/peraltafinancing.com\/business\/investing\/maynard-paton-mountview-estates-90-shares-trade-12-below-nav-steepest-discount-for-more-than-10-years-after-fy-2024-admits-third-consecutive-sub-60-gross-margin-and-re-emphasise\/"},"modified":"2025-05-26T05:00:09","modified_gmt":"2025-05-26T05:00:09","slug":"maynard-paton-mountview-estates-90-shares-trade-12-below-nav-steepest-discount-for-more-than-10-years-after-fy-2024-admits-third-consecutive-sub-60-gross-margin-and-re-emphasise","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=257472","title":{"rendered":"Maynard Paton | MOUNTVIEW ESTATES: \u00a390 Shares Trade 12% Below NAV \u2014 Steepest Discount For More Than 10 Years \u2014 After FY 2024 Admits Third Consecutive Sub-60% Gross Margin And Re-Emphasises Subpar Gains From Post-2014 Purchases"},"content":{"rendered":"<p> <br \/>\n<\/p>\n<div itemprop=\"text\">\n<p>02 November 2024<br \/><strong>By Maynard Paton<\/strong><\/p>\n<p>FY 2024 results summary for <strong>Mountview Estates<\/strong> <strong>(MTVW)<\/strong>:<\/p>\n<ul class=\"wp-block-list\">\n<li>A reasonable FY performance, which showed revenue up 8%, profit up 22% and the final dividend up 10% after buyers looking for \u201c<em>improvement potential\u201d<\/em> paid \u201c<em>good prices<\/em>\u201d for a more normal \u201c<em>profile<\/em>\u201d of properties.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>Sales by larger landlords allowed MTVW to spend a substantial \u00a348m on new properties, but the advance to net asset value (NAV) was just 2% after MTVW took on greater debt, paid 6%-plus interest, incurred higher tax and sold properties for \u00a359m.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>The absence of another formal estate valuation remains frustrating, especially given properties purchased after a 2014 valuation continue to realise subpar \u2018reversionary\u2019 gains and the overall property-sales gross margin was less than 60% for the third consecutive year. <\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>The board continues to be well paid, attract 30%-plus protest votes and enjoy entrenched support through a family concert party\u2026 although not every family member seems a die-hard shareholder and recent AGM remarks even hinted MTVW could one day undertake a trade sale.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>The \u00a390 shares offer a 5.8% income, trade 12% below NAV \u2014 the steepest discount for at least ten years \u2014 and may be worth \u00a3182 if the group\u2019s properties were all sold today at their vacant possession value. I continue to hold.<\/li>\n<\/ul>\n<p><span id=\"more-32764\"\/><\/p>\n<h2 class=\"gb-headline gb-headline-b1a8bcda gb-headline-text\"><strong>Contents<\/strong><\/h2>\n<h2 class=\"gb-headline gb-headline-269a1662 gb-headline-text\" id=\"news-links-share-data-disclosure\"><strong>News links, share data and disclosure<\/strong><\/h2>\n<ul class=\"wp-block-list\">\n<li><strong>Share price: <\/strong>\u00a390<\/li>\n<li><strong>Share count: <\/strong>3,899,014<\/li>\n<li><strong>Market capitalisation: <\/strong>\u00a3351m<\/li>\n<\/ul>\n<h2 class=\"gb-headline gb-headline-7af38402 gb-headline-text\" id=\"why-i-own\"><strong>Why I own MTVW<\/strong><\/h2>\n<figure class=\"gb-block-image gb-block-image-0b451712\"><img fetchpriority=\"high\" decoding=\"async\" width=\"1100\" height=\"389\" class=\"gb-image gb-image-0b451712\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2020\/12\/MTVW-houses-banner-1100x389-1.jpg\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2020\/12\/MTVW-houses-banner-1100x389-1.jpg 1100w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2020\/12\/MTVW-houses-banner-1100x389-1-300x106.jpg 300w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2020\/12\/MTVW-houses-banner-1100x389-1-1024x362.jpg 1024w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2020\/12\/MTVW-houses-banner-1100x389-1-768x272.jpg 768w\" sizes=\"(max-width: 1100px) 100vw, 1100px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>Board led by veteran family manager who continues to lead an aggregate 50%\/\u00a3177m concert-party shareholding. \u00a0<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>Properties are carried at cost, and when eventually sold at their \u2018reversionary\u2019 values may generate total proceeds significantly in excess of the recent market cap.<\/li>\n<\/ul>\n<p><strong>Further reading: <\/strong><a href=\"https:\/\/maynardpaton.com\/2014\/04\/18\/mountview-estates-plc-why-im-up-70-in-3-years\/\">My MTVW Buy report<\/a> | <a href=\"https:\/\/maynardpaton.com\/mtvw\/\">All my MTVW posts<\/a>  | <a rel=\"noreferrer noopener\" href=\"https:\/\/www.mountviewplc.co.uk\/\" target=\"_blank\">MTVW website<\/a> <\/p>\n<h2 class=\"gb-headline gb-headline-3c82bade gb-headline-text\" id=\"results-summary\"><strong>Results summary<\/strong><\/h2>\n<figure class=\"gb-block-image gb-block-image-9130f2e3\"><img loading=\"lazy\" decoding=\"async\" width=\"1070\" height=\"450\" class=\"gb-image gb-image-9130f2e3\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/11\/MTVW-AR-2024-results-summary.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/11\/MTVW-AR-2024-results-summary.png 1070w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/11\/MTVW-AR-2024-results-summary-300x126.png 300w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/11\/MTVW-AR-2024-results-summary-1024x431.png 1024w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/11\/MTVW-AR-2024-results-summary-768x323.png 768w\" sizes=\"auto, (max-width: 1070px) 100vw, 1070px\"\/><\/figure>\n<h2 class=\"gb-headline gb-headline-6227f6d0 gb-headline-text\" id=\"revenue-profit-net-asset-value-dividend\"><strong>Revenue, profit, net asset value and dividend<\/strong><\/h2>\n<ul class=\"wp-block-list\">\n<li>Despite referring to \u201c<em>economic difficulties\u201d\u2026<\/em><\/li>\n<\/ul>\n<p class=\"has-global-color-8-background-color has-background\">[H1 2024]<br \/>\u201c<em>Despite the <\/em><strong><em>economic difficulties<\/em><\/strong><em> being suffered throughout the country\u2026\u201d<br \/>\u2026<br \/>\u201cWe will not abandon our financial prudence, but I am determined that we shall protect our staff from the <\/em><strong><em>worst economic misfortunes<\/em><\/strong><em>\u201c<br \/>\u2026<br \/>\u201cWe live in <\/em><strong><em>difficult times<\/em><\/strong><em>, but I believe that this Company will continue to prosper and can continue to care for its staff and its shareholders.\u201d<\/em>\u00a0<\/p>\n<ul class=\"wp-block-list\">\n<li>\u2026the preceding H1 reported quite satisfactory progress and provided hope this FY might not be as bad as MTVW\u2019s weak share price has suggested (<a href=\"#valuation\">see Valuation<\/a>).\u00a0<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>H2 revenue gained 11% to \u00a340.2m while H2 operating profit advanced 29% to \u00a319.9m:<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-72033204\"><img loading=\"lazy\" decoding=\"async\" width=\"700\" height=\"400\" class=\"gb-image gb-image-72033204\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart01.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart01.png 700w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart01-300x171.png 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\"\/><\/figure>\n<figure class=\"gb-block-image gb-block-image-06e896a0\"><img loading=\"lazy\" decoding=\"async\" width=\"700\" height=\"400\" class=\"gb-image gb-image-06e896a0\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart09.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart09.png 700w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart09-300x171.png 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>The H2 performance meant FY revenue increased 8% to \u00a379.5m, the highest level ever bar FY 2016 (\u00a379.8m)\u2026<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>\u2026and FY operating profit improved 22% to \u00a341.4m, the highest level since FY 2017 (\u00a346.8m).<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>Revenue was split 74%\/26% between property sales and rental income, which broadly matched the preceding ten-year average (73%\/27%): \u00a0 \u00a0<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-021c6094\"><img loading=\"lazy\" decoding=\"async\" width=\"700\" height=\"400\" class=\"gb-image gb-image-021c6094\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart10.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart10.png 700w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart10-300x171.png 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>Note that MTVW typically sells its regulated-tenancy properties when the tenancy ends \u2014 which almost always occurs when the tenant dies:<\/li>\n<\/ul>\n<p class=\"has-global-color-8-background-color has-background\">\u201c<em>Regulated tenancies by their nature are not for any specific period of time <\/em><strong><em>and in most cases they do not become vacant until the death of the tenant<\/em><\/strong><em>. It is difficult to predict with any certainty the time at which Mountview\u2019s inventory properties might become vacant<\/em>.\u201d<\/p>\n<ul class=\"wp-block-list\">\n<li>This FY once again reiterated a \u201c<em>finely balanced<\/em>\u201d outlook for the housing market\u2026<\/li>\n<\/ul>\n<p class=\"has-global-color-8-background-color has-background\">\u201c<em>Looking forward economic indicators, including projected inflation levels, are looking more positive albeit projected to lead to only sluggish growth in the coming years leaving many households yet to regain pre-pandemic real disposable income levels.<\/em><strong><em> Thus the wider outlook is once more finely balanced<\/em><\/strong><em> as any one of a number of factors could tip the balance<\/em>\u201c<\/p>\n<ul class=\"wp-block-list\">\n<li>\u2026but also repeated the claim that MTVW\u2019s \u201c<em>lower priced<\/em>\u201d property portfolio could escape the worst of any economic ructions:<\/li>\n<\/ul>\n<p class=\"has-global-color-8-background-color has-background\">\u201c<em>We are fortunate that the properties that Mountview brings to auction are typically in high demand as they <\/em><strong><em>offer a lower priced entry to the housing market<\/em><\/strong><em> or, if sold to developers, <\/em><strong><em>provide opportunity for \u2018developer profit\u2019<\/em><\/strong><em>. We are hopeful therefore that <\/em><strong><em>Mountview will continue to be well placed to weather any continued downturn in the general housing market<\/em><\/strong><em>, should it occur, through both continuing sales of attractive properties and also with the opportunity to purchase potentially discounted replacement properties both through auction and private tender.<\/em>\u201d\u00a0<\/p>\n<ul class=\"wp-block-list\">\n<li>MTVW reckoned this FY was supported through buyers paying \u201c<em>good prices<\/em>\u201d for properties with \u201c<em>improvement potential<\/em>\u201c:<\/li>\n<\/ul>\n<p class=\"has-global-color-8-background-color has-background\">\u201c<em>We have mentioned before the attractiveness of Mountview properties coming up for sale\u2026 and, despite the seeming weakness in the London housing market compared with the rest of the UK, this has continued to be the case in the current year<\/em><strong><em> with good prices being achieved whatever the route to market<\/em><\/strong><em>.<\/em><\/p>\n<p>We do anticipate that this trend will continue into the current year,<strong><em> as buyers faced with higher interest rates look for properties with improvement potential<\/em><\/strong><em>.<\/em>\u201c<\/p>\n<ul class=\"wp-block-list\">\n<li>Most of MTVW\u2019s properties are located within London or south-east England, and 708 (86%) of the 820 properties sold during the last five FYs achieved less than \u00a3500k:<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-94418816\"><img loading=\"lazy\" decoding=\"async\" width=\"700\" height=\"400\" class=\"gb-image gb-image-94418816\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart02.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart02.png 700w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart02-300x171.png 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>FY interest payments more than tripled to \u00a33.7m due to the higher rate of interest paid on a greater level of debt (<a href=\"#financials-balance-sheet\">see Financials: balance sheet<\/a>).\u00a0<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>In fact, interest payments absorbed 5.2% of revenue during H2, the highest six-month proportion since H2 2013 (6.9%):<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-7227b0b0\"><img loading=\"lazy\" decoding=\"async\" width=\"700\" height=\"400\" class=\"gb-image gb-image-7227b0b0\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart03.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart03.png 700w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart03-300x171.png 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>MTVW bemoaned the higher tax rate limiting earnings growth to 7%:<\/li>\n<\/ul>\n<p class=\"has-global-color-8-background-color has-background\">\u201c<em>It is a matter of great disappointment that <strong>t<\/strong><\/em><strong><em>he Government had seen fit to increase Corporation Tax by over 30%<\/em><\/strong><em> (19% to 25%) thus limiting the increase in earnings per share to 7.4%.<\/em>\u201d\u00a0<\/p>\n<ul class=\"wp-block-list\">\n<li>FY earnings of \u00a328m less the \u00a319m dividends paid during the year meant this FY\u2019s net asset value (NAV) increased by just \u00a39m (+2%) to \u00a3400m or \u00a3102.50 per share:<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-654ccb94\"><img loading=\"lazy\" decoding=\"async\" width=\"700\" height=\"400\" class=\"gb-image gb-image-654ccb94\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart04.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart04.png 700w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart04-300x171.png 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>FY NAV of \u00a3400m comprised properties of \u00a3472m, debt of \u00a367m and net other liabilities of \u00a36m, and exceeds the \u00a3351m market cap (<a href=\"#valuation\">see Valuation<\/a>).\u00a0<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>This FY set a new NAV high following FYs 2022 and 2023, during which NAV dropped a fraction after MTVW paid two special dividends amounting to a combined \u00a35.25 a share:<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-d29a6368\"><img loading=\"lazy\" decoding=\"async\" width=\"700\" height=\"400\" class=\"gb-image gb-image-d29a6368\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart08.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart08.png 700w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart08-300x171.png 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>NAV has increased by approximately \u00a333m or 9% since H2 2019.\u00a0<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>Include dividends paid of \u00a3108m, and the combined additional NAV and dividend return comes to \u00a3141m or 38% over five years:<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-6d0e5278\"><img loading=\"lazy\" decoding=\"async\" width=\"700\" height=\"400\" class=\"gb-image gb-image-6d0e5278\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart06.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart06.png 700w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart06-300x171.png 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>Five-year shareholder returns through increased NAV and dividends have slowed during recent years.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>For example, increased NAV and accumulated dividends came to \u00a3153m during the five years to H2 2021 (a 49% combined NAV and dividend return) \u2014 and reached \u00a3164m during the five years to H2 2019 (a 62% combined NAV and dividend return):<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-4f51972d\"><img loading=\"lazy\" decoding=\"async\" width=\"700\" height=\"400\" class=\"gb-image gb-image-4f51972d\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart07.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart07.png 700w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart07-300x171.png 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>The hope is future NAV and dividend growth can now improve by MTVW continuing to sell for \u201c<em>good prices<\/em>\u201d while undertaking shrewd property purchases. This FY suggested such investments have been made:<\/li>\n<\/ul>\n<p class=\"has-global-color-8-background-color has-background\">\u201c<em>The Company has made <\/em><strong><em>many good purchases<\/em><\/strong><em> during the year ended 31 March 2024 and continues to be in position to<\/em><strong><em> take advantage of good opportunities<\/em><\/strong><em>.\u201d<\/em><\/p>\n<ul class=\"wp-block-list\">\n<li>This FY lifted the final dividend by 10% to 275p per share to take the FY payout 5% higher to 525p per share:<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-db44b667\"><img loading=\"lazy\" decoding=\"async\" width=\"700\" height=\"400\" class=\"gb-image gb-image-db44b667\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart05.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart05.png 700w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart05-300x171.png 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/find-and-update.company-information.service.gov.uk\/company\/00328020\/filing-history\" target=\"_blank\" rel=\"noreferrer noopener\">Companies House<\/a> shows the ordinary dividend has never been cut since at least 1985 \u2014 after which the payout has risen 117-fold.<\/li>\n<\/ul>\n<h2 class=\"gb-headline gb-headline-cc0515be gb-headline-text\" id=\"trading-properties-disposals\"><strong>Trading properties: disposals<\/strong><\/h2>\n<ul class=\"wp-block-list\">\n<li>The 174 properties sold during this FY were split 82 during H1 and 92 during H2:<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-f774a9ee\"><img loading=\"lazy\" decoding=\"async\" width=\"700\" height=\"400\" class=\"gb-image gb-image-f774a9ee\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart12.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart12.png 700w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart12-300x171.png 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>The 174 properties sold almost matched the 173 average witnessed during the preceding ten years:<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-1976602a\"><img loading=\"lazy\" decoding=\"async\" width=\"700\" height=\"400\" class=\"gb-image gb-image-1976602a\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart13.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart13.png 700w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart13-300x171.png 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>This FY\u2019s average sale price of \u00a3340k did not appear influenced by numerous sales of <a href=\"https:\/\/www.allsop.co.uk\/insights\/the-foundations-remain-solid-for-freehold-ground-rent-investments\/\" target=\"_blank\" rel=\"noreferrer noopener\">ground rents<\/a>, which had distorted the comparable FY\u2019s \u00a3295k average sale price (or \u00a3395k average without ground rents).<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>Average sale prices can also be skewed by MTVW occasionally raising \u00a31m-plus from a single transaction. This FY included two \u00a31m-plus disposals, while the preceding FY included five:<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-f1cb7920\"><img loading=\"lazy\" decoding=\"async\" width=\"1050\" height=\"250\" class=\"gb-image gb-image-f1cb7920\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-disposals.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-disposals.png 1050w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-disposals-300x71.png 300w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-disposals-1024x244.png 1024w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-disposals-768x183.png 768w\" sizes=\"auto, (max-width: 1050px) 100vw, 1050px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>This FY\u2019s \u00a3340k average sales price was at the upper end of the \u00a3273k-\u00a3347k range witnessed since FY 2017.\u00a0<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>The higher average sales price meant total FY proceeds from sold properties climbed 9% to \u00a359m \u2014 not far short of the record \u00a361m from FY 2016:<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-a63abcd6\"><img loading=\"lazy\" decoding=\"async\" width=\"700\" height=\"400\" class=\"gb-image gb-image-a63abcd6\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart37.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart37.png 700w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart37-300x171.png 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\"\/><\/figure>\n<h2 class=\"gb-headline gb-headline-611ccfd6 gb-headline-text\" id=\"trading-properties-acquisitions\"><strong>Trading properties: acquisitions<\/strong><\/h2>\n<ul class=\"wp-block-list\">\n<li>This FY witnessed 135 properties acquired for \u00a345m (before purchasing expenses):<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-3a156815\"><img loading=\"lazy\" decoding=\"async\" width=\"1050\" height=\"550\" class=\"gb-image gb-image-3a156815\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-acquisitions.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-acquisitions.png 1050w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-acquisitions-300x157.png 300w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-acquisitions-1024x536.png 1024w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-acquisitions-768x402.png 768w\" sizes=\"auto, (max-width: 1050px) 100vw, 1050px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>The 135 properties acquired were split 86 during H1 and 49 during H2:<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-cc5ccd67\"><img loading=\"lazy\" decoding=\"async\" width=\"700\" height=\"400\" class=\"gb-image gb-image-cc5ccd67\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart15.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart15.png 700w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart15-300x171.png 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>49 properties acquired during H2 2024 versus 80-plus purchased during each of H1 2024, H2 2023 and H1 2023 may suggest shrewd buying opportunities have become slightly harder to find.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>Of the \u00a345m (before purchasing expenses) spent acquiring properties during this FY, a chunky \u00a338m (86%) was spent on portfolios of properties:\u00a0<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-26da4c02\"><img loading=\"lazy\" decoding=\"async\" width=\"700\" height=\"400\" class=\"gb-image gb-image-26da4c02\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart16.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart16.png 700w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart16-300x171.png 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>Coupled with an even chunkier \u00a342m spent acquiring property portfolios during the comparable FY, MTVW\u2019s recent buying activity does appear to be prompted by larger landlords wishing to sell.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>The comparable FY implied market and\/or regulatory concerns were causing some landlords to exit the sector:<\/li>\n<\/ul>\n<p class=\"has-global-color-8-background-color has-background\">[FY 2023] \u201c<em>There are hypotheses circulating tha<\/em><strong><em>t the growing opportunities for purchasing have arisen due to either general concerns about the property market or more directly, concerns among buyers about acquiring properties with sitting tenants in the face of proposed reforms to the rental market<\/em><\/strong><em>. In either case both play into Mountview\u2019s core values around careful purchasing of primarily regulated tenancies and patience in waiting for vacant possession, with the latter highly aligned with the aims behind the proposed leasehold reform.<\/em> \u201c<\/p>\n<ul class=\"wp-block-list\">\n<li>This FY did not speculate on why some landlords were selling, but did mention \u201c<em>changing and evolving legislation<\/em>\u201c:<\/li>\n<\/ul>\n<p class=\"has-global-color-8-background-color has-background\">\u201c<em>Operationally, we will monitor the requirements resulting from <\/em><strong><em>changing and evolving legislation<\/em><\/strong><em>. This will <\/em><strong><em>include environmental legislation and the Leasehold and Freehold Reform Act (2024)<\/em><\/strong><em> (the Act) hastily rushed through Parliament during the wash-up period prior to Parliament being dissolved on 30 May 2024. Early comments have noted not just the terms of this Act but also its gaps, which will need future legislation. Moreover, implementing even the current Act will require further secondary legislation<\/em>.\u201d<\/p>\n<ul class=\"wp-block-list\">\n<li>Board remarks at the <a href=\"https:\/\/maynardpaton.com\/2023\/10\/28\/mountview-estates-lowly-50-fy-gross-margin-despite-record-395k-average-sales-price-signals-property-purchases-realising-limited-gains-and-leaves-100-shares-trading-at-nav\/#comment-13264\">2023 AGM<\/a> implied forthcoming legislation had prompted the aforementioned disposals of ground rents during the comparable FY.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>This FY showed MTVW owning 2,320 tenanted properties, which suggests a possible EPC improvement bill of up to \u00a319m or \u00a34.76 per share based on Rightmove\u2019s \u00a38k estimate:\u00a0<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-14eb8edd\"><img loading=\"lazy\" decoding=\"async\" width=\"1050\" height=\"310\" class=\"gb-image gb-image-14eb8edd\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-units.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-units.png 1050w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-units-300x89.png 300w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-units-1024x302.png 1024w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-units-768x227.png 768w\" sizes=\"auto, (max-width: 1050px) 100vw, 1050px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>91% of MTVW\u2019s properties have an EPC rating of E or above (or are exempt), with 9% yet to receive an assessment:<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-542e592f\"><img loading=\"lazy\" decoding=\"async\" width=\"1050\" height=\"400\" class=\"gb-image gb-image-542e592f\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-epc.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-epc.png 1050w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-epc-300x114.png 300w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-epc-1024x390.png 1024w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-epc-768x293.png 768w\" sizes=\"auto, (max-width: 1050px) 100vw, 1050px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>Including purchasing expenses, this FY witnessed \u00a348m used to buy new properties \u2014 well above the average \u00a329m spent annually since an enormous \u00a3100m was invested during FY 2008:\u00a0<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-8ccfe8ad\"><img loading=\"lazy\" decoding=\"async\" width=\"700\" height=\"400\" class=\"gb-image gb-image-8ccfe8ad\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart14.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart14.png 700w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart14-300x171.png 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>Following this FY\u2019s acquisitions and disposals, regulated tenancies remain MTVW\u2019s predominant trading property:<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-ef1b786b\"><img loading=\"lazy\" decoding=\"async\" width=\"700\" height=\"400\" class=\"gb-image gb-image-ef1b786b\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart17.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart17.png 700w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart17-300x171.png 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>The number of regulated tenancies owned by MTVW topped 3,000 25 years ago, topped 2,400 ten years ago but today stands at less than 1,900:<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-68e98f40\"><img loading=\"lazy\" decoding=\"async\" width=\"700\" height=\"400\" class=\"gb-image gb-image-68e98f40\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart11.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart11.png 700w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart11-300x171.png 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\"\/><\/figure>\n<h2 class=\"gb-headline gb-headline-367dd934 gb-headline-text\" id=\"trading-properties-gross-margin-rental-income\"><strong>Trading properties: gross margin and rental income<\/strong><\/h2>\n<ul class=\"wp-block-list\">\n<li>MTVW\u2019s margin and profit can fluctuate due to the unpredictable mix of properties becoming available for sale during any particular period.\u00a0<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>The percentage gain on each property sold \u2014 reflected by MTVW\u2019s gross margin \u2014 is typically correlated to the duration of MTVW\u2019s ownership, which can range from a few years to a few decades.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>This FY implied the profile of properties sold had reverted to some normality:\u00a0<\/li>\n<\/ul>\n<p class=\"has-global-color-8-background-color has-background\">\u201c<em>In 2023\/24, and in contrast with last year, the improved sales performance also translated into improvements throughout the rest of the P&amp;L, <\/em><strong><em>as the cost factors related to timing and location of purchase reverted to the kind of profile we saw before 2022.<\/em><\/strong>\u201c<\/p>\n<ul class=\"wp-block-list\">\n<li>In fact, this FY\u2019s 58% gross margin achieved through property sales was a welcome improvement on the unusually low 50% registered during the preceding FY:<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-1874e164\"><img loading=\"lazy\" decoding=\"async\" width=\"700\" height=\"400\" class=\"gb-image gb-image-1874e164\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart18.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart18.png 700w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart18-300x171.png 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>However, this FY was the <strong><em><span style=\"text-decoration: underline;\">third<\/span><\/em><\/strong> consecutive FY with a property-sales gross margin of less than 60% \u2014 the first time such a run has occurred since the three years to FY 2000.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>A property-sales gross margin of 58% is equivalent to buying a property for \u00a3100k and selling it for \u00a3238k.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>The run of sub-60% gross margins now gives a lower five-year average versus the preceding five-year periods:\n<ul class=\"wp-block-list\">\n<li>FYs 2020 to 2024: 58% average;<\/li>\n<li>FYs 2015 to 2019: 63% average;<\/li>\n<li>FYs 2010 to 2014: 60% average;<\/li>\n<li>FYs 2005 to 2009: 61% average, and;<\/li>\n<li>FYs 2000 to 2004: 62% average.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>The lower-than-normal gross margins may suggest past property purchases were bought for too much or\/and sold for too little.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>Still, gross margins can rebound significantly as the unpredictable mix of properties becoming available for sale changes. For example, the 43% property-sales gross margin for FY 2009 had rebounded to a super 67% by FY 2012.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>MTVW\u2019s FY rental income gained 5% to set a new FY record at \u00a320.4m:<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-d4d2a14b\"><img loading=\"lazy\" decoding=\"async\" width=\"700\" height=\"400\" class=\"gb-image gb-image-d4d2a14b\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart38.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart38.png 700w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart38-300x171.png 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>The FY rental-income gross margin remained at a normal 69%:<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-2d212980\"><img loading=\"lazy\" decoding=\"async\" width=\"700\" height=\"400\" class=\"gb-image gb-image-2d212980\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart20.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart20.png 700w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart20-300x171.png 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>During the last ten years, FY rental income has gained 15% or \u00a32.6m while the carrying value of all properties has advanced 35% or \u00a3121m:<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-5437bd2a\"><img loading=\"lazy\" decoding=\"async\" width=\"700\" height=\"400\" class=\"gb-image gb-image-5437bd2a\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart21.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart21.png 700w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart21-300x171.png 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>The figures suggest for every net \u00a31m spent on new properties during the last ten years, an extra \u00a321k (2.1%) has been added to the rent.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>On a five-year basis, rental income has advanced by \u00a31.4m versus the carried value of properties increasing by \u00a351m \u2014 suggesting an extra \u00a327k (2.7%) has been added to the rent for every net \u00a31m spent on new properties.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>Board comments at the 2024 AGM implied MTVW sought to buy regulated tenancies supplying rental incomes of between 2.5% and 3% of cost.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>FY rental income of \u00a320m equates to an effective 4.4% rental yield from this FY\u2019s average \u00a3460m carrying value of all properties:<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-34b510bc\"><img loading=\"lazy\" decoding=\"async\" width=\"700\" height=\"400\" class=\"gb-image gb-image-34b510bc\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart22.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart22.png 700w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart22-300x171.png 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>4.4% is the lowest rental yield from MTVW\u2019s properties since at least FY 1998.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>This FY generated a rental income \u2018surplus\u2019 of \u00a33m after rental income of \u00a320m paid maintenance costs of \u00a36m, administration costs of \u00a37m and bank interest of \u00a34m:\u00a0<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-54276869\"><img loading=\"lazy\" decoding=\"async\" width=\"700\" height=\"400\" class=\"gb-image gb-image-54276869\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart23.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart23.png 700w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart23-300x171.png 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>If rental income is used to fund property maintenance costs, administration costs and interest costs, then the proceeds from property sales are left to cover tax and dividends.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>This FY generated a \u00a329m \u2018surplus\u2019 of property-sales revenue following the \u00a320m declared ordinary dividend and \u00a39m taxation charge:<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-f7948760\"><img loading=\"lazy\" decoding=\"async\" width=\"700\" height=\"400\" class=\"gb-image gb-image-f7948760\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart24.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart24.png 700w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart24-300x171.png 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>A \u00a329m \u2018surplus\u2019 of property-sales revenue should leave ample room for further payout improvements while reinvesting the rest into new purchases.<\/li>\n<\/ul>\n<h2 class=\"gb-headline gb-headline-307edf26 gb-headline-text\" id=\"trading-properties-properties-valued-by-allsop\"><strong>Trading properties: properties valued by Allsop<\/strong><\/h2>\n<ul class=\"wp-block-list\">\n<li>MTVW continues to dispose of properties at a reasonable premium to a past valuation.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>To recap, MTVW commissioned property agent Allsop during September 2014 to assess the group\u2019s estate.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>Allsop returned a \u00a3666m valuation \u2014 some 2.1x the \u00a3318m book value of the properties owned at the time.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>The Allsop assessment was based on MTVW\u2019s properties remaining in their regulated-tenancy state and therefore excluded any \u2018reversionary\u2019 gain (i.e. the value uplift that occurs when a regulated tenancy finishes, the rent reverts to a proper market level and the property can then be sold at a fair market value).\u00a0<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>The Allsop assessment was never applied to the formal accounts. MTVW\u2019s properties instead remain on the balance sheet at their cost price.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>Following the Allsop assessment, MTVW reveals the proceeds from sold properties versus their Allsop valuation:<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-90a758a9\"><img loading=\"lazy\" decoding=\"async\" width=\"1050\" height=\"270\" class=\"gb-image gb-image-90a758a9\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-allsop1.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-allsop1.png 1050w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-allsop1-300x77.png 300w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-allsop1-1024x263.png 1024w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-allsop1-768x197.png 768w\" sizes=\"auto, (max-width: 1050px) 100vw, 1050px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>This FY witnessed MTVW sell properties with a combined \u00a329.6m Allsop valuation for \u00a346.6m \u2014 a premium of 57%.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>This FY\u2019s 57% premium was split 63% during H1 and 52% during H2:<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-839f9bdb\"><img loading=\"lazy\" decoding=\"async\" width=\"700\" height=\"400\" class=\"gb-image gb-image-839f9bdb\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart25.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart25.png 700w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart25-300x171.png 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>The H1 63% premium was MTVW\u2019s highest save for the 65-66% achieved during FY 2022.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>The H2 52% premium was MTVW\u2019s lowest since H2 2020.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>The realised premium versus the Allsop valuation can fluctuate depending on the mix of properties sold during that particular period.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>The realised premium has implications for estimating MTVW\u2019s potential share price (<a href=\"#valuation\">see Valuation<\/a>).<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-e5ddea36\"><img loading=\"lazy\" decoding=\"async\" width=\"1165\" height=\"338\" class=\"gb-image gb-image-e5ddea36\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2019\/07\/MTVW-AR-2015-example-properties.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2019\/07\/MTVW-AR-2015-example-properties.png 1165w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2019\/07\/MTVW-AR-2015-example-properties-300x87.png 300w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2019\/07\/MTVW-AR-2015-example-properties-768x223.png 768w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2019\/07\/MTVW-AR-2015-example-properties-1024x297.png 1024w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2019\/07\/MTVW-AR-2015-example-properties-624x181.png 624w\" sizes=\"auto, (max-width: 1165px) 100vw, 1165px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>During the 9.5 years following the Allsop assessment, MTVW has raised \u00a3434m from selling properties the agent had valued at \u00a3289m.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>Selling properties that Allsop had valued at \u00a3289m implies the book value (i.e. the original cost) of the properties sold was \u00a3138m (i.e. \u00a3289m divided by the aforementioned 2.1x multiple).\u00a0<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>Selling Allsop-valued properties with a \u00a3138m book value indicates Allsop-valued properties with a \u00a3180m book value remain within MTVW\u2019s ownership (i.e. the \u00a3318m book value at the September 2014 assessment less the \u00a3138m since sold).<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>If MTVW has taken 9.5 years to sell Allsop-valued properties with an estimated original book value of \u00a3138m, the remaining Allsop-valued properties of \u00a3180m could therefore take a further 12 years to sell.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>This FY showed total trading properties possessing a \u00a3446m book value, implying properties purchased after the Allsop review have a \u00a3267m book value (i.e. \u00a3446m less the remaining Allsop-valued properties of \u00a3180m).<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>As more Allsop-valued properties are sold and other properties are purchased, the less relevant the 2014 Allsop valuation becomes to MTVW\u2019s share price.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>MTVW\u2019s results commentary has never referred to the Allsop valuation since the assessment was undertaken, and this FY repeated the following explanation from previous years:<\/li>\n<\/ul>\n<p class=\"has-global-color-8-background-color has-background\"><em>\u201cThe [Allsop] valuation is <\/em><strong><em>not a useful tool for running the business <\/em><\/strong><em>because we are always going to await vacant possession, and no perceived uplift in value can justify selling a tenanted property. The nature of our business and the rules and conventions under which we operate <\/em><strong><em>place no obligation upon us to value our trading stock<\/em><\/strong><em> at any given time and therefore the valuation has not been updated since.<\/em>\u201d\u00a0<\/p>\n<ul class=\"wp-block-list\">\n<li>Numerous shareholders have questioned the board during several AGMs about the prospect of another Allsop-type valuation. However, the board has repeatedly rejected another assessment. Reasons given have included:\u00a0\n<ul class=\"wp-block-list\">\n<li>The assessment is not used by management;<\/li>\n<li>The assessment is expensive, and;<\/li>\n<li>There is no accounting requirement.\u00a0<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>Board comments at the 2024 AGM confirmed the directors were unanimous in their decision not to undertake another Allsop-type valuation.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>An irony perhaps of the board not undertaking another valuation is that, should the directors want to sell, they may not achieve a satisfactory price for their shares.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>The wife of MTVW non-exec Dr Andrew Williams for example raised \u00a3315k after selling MTVW shares during September at \u00a392.50 \u2014 10% below this FY\u2019s NAV (<a href=\"#sinclair-family-concert-party\">see Sinclair family concert party<\/a>).<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>Had MTVW undertaken another Allsop-type assessment and revealed further \u2018hidden value\u2019 within its property estate, the shares may now be trading <strong>above<\/strong> NAV\u2026<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>\u2026and the wife of Dr Williams may have raised somewhat more than \u00a3315k (<a href=\"#valuation\">see Valuation<\/a>).<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>The board may argue MTVW\u2019s long-term dividend and NAV records do not suggest outside shareholders have been unfairly treated by a lack of formal valuations.\u00a0<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>September 2024 marked ten years since the Allsop assessment was undertaken. I doubt the board has commissioned another revaluation to publish within the upcoming interim results to celebrate the anniversary.<\/li>\n<\/ul>\n<h2 class=\"gb-headline gb-headline-6e252298 gb-headline-text\" id=\"trading-properties-properties-not-valued-by-allsop\"><strong>Trading properties: properties not valued by Allsop\u00a0<\/strong><\/h2>\n<ul class=\"wp-block-list\">\n<li>The Allsop assessment and associated disclosures allow shareholders to evaluate the properties not valued by Allsop.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>During this FY, properties bought after the Allsop valuation raised proceeds of \u00a312.5m:<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-4ea46a37\"><img loading=\"lazy\" decoding=\"async\" width=\"1050\" height=\"270\" class=\"gb-image gb-image-4ea46a37\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-allsop2.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-allsop2.png 1050w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-allsop2-300x77.png 300w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-allsop2-1024x263.png 1024w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-allsop2-768x197.png 768w\" sizes=\"auto, (max-width: 1050px) 100vw, 1050px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>But what was the original cost of those properties that raised the \u00a312.5m?<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>The Allsop-valued properties sold during this FY had an Allsop valuation of \u00a329.6m, which suggests their book value (i.e. purchase price) was \u00a329.6m\/2.1x = \u00a314.1m.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>The total book value of properties sold during this FY was \u00a324.7m, which implies the book value of the properties bought after the Allsop valuation and sold during this FY was \u00a324.7m less \u00a314.1m = \u00a310.5m.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>Raising \u00a312.5m from selling properties with an estimated \u00a310.5m purchase price indicates MTVW disposed of the properties at a 19% premium.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>Board AGM remarks (during both the <a href=\"https:\/\/maynardpaton.com\/2021\/07\/15\/mountview-estates-estimated-nav-still-surpasses-200-per-share-after-remarkable-h2-shows-welcome-1-55x-sales-premium-and-12-5-final-dividend-lift\/#comment-12966\">2021<\/a> and <a href=\"https:\/\/maynardpaton.com\/2023\/10\/28\/mountview-estates-lowly-50-fy-gross-margin-despite-record-395k-average-sales-price-signals-property-purchases-realising-limited-gains-and-leaves-100-shares-trading-at-nav\/#comment-13264\">2023<\/a> events) stressed MTVW purchased regulated tenancies at 75% of their vacant possession value.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>In theory at least, a regulated property purchased one day at 75% of vacant possession value \u2014 which then becomes vacant the next day \u2014 <span style=\"text-decoration: underline;\"><em>should enjoy an immediate 33% \u2018reversionary\u2019 value uplift.<\/em><\/span><\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>I estimate during the 9.5 years following the Allsop valuation, MTVW has raised a total \u00a364m from selling properties not valued by Allsop with an estimated book value (i.e. purchase price) of \u00a360m:<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-003b0392\"><img loading=\"lazy\" decoding=\"async\" width=\"700\" height=\"400\" class=\"gb-image gb-image-003b0392\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart26.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart26.png 700w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart26-300x171.png 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>I estimate during the last five years, MTVW has raised a total \u00a349m from selling properties not valued by Allsop with an estimated book value of \u00a344m.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>My estimates indicate MTVW\u2019s purchases following the Allsop assessment of September 2014 have <span style=\"text-decoration: underline;\"><em>led to \u2018reversionary\u2019 value uplifts well below the 33% that buying at 75% of vacant possession should generate<\/em><\/span>.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>My estimates could easily explain why NAV growth has slowed and property-sales gross margins have declined during recent years; properties bought and then sold since September 2014 have seemingly realised limited gains.\u00a0<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>My estimates may also explain why the share price has made little headway during the same time:<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>Of course, not every property MTVW has purchased following the Allsop assessment has been sold.\u00a0<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>Those properties not valued by Allsop but still owned by MTVW could be sitting on huge paper gains, while those that have been sold were held for relatively short durations that would always limit their final profit.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>Furthermore, MTVW acquires properties other than regulated tenancies, which may require more than the 9.5 years since the Allsop assessment to maximise their upside.\u00a0<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>Still, buying properties for an estimated \u00a360m\/\u00a344m and selling for \u00a364m\/\u00a349m can\u2019t be deemed a rousing success \u2014 especially when 33% \u2018reversionary\u2019 uplifts should be enjoyed \u2014 and probably explains the <a href=\"https:\/\/maynardpaton.com\/2023\/10\/28\/mountview-estates-lowly-50-fy-gross-margin-despite-record-395k-average-sales-price-signals-property-purchases-realising-limited-gains-and-leaves-100-shares-trading-at-nav\/#protest-votes-david-pears-executive-pay\">pointed questions from David Pears at the 2023 AGM<\/a>.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>Board responses to those question at the 2024 AGM included:<\/li>\n<\/ul>\n<p class=\"has-global-color-8-background-color has-background\">[AGM 2024]<br \/>\u201c<em>We\u2019re satisfied that the purchasing process is robust<\/em>\u201c<br \/>\u201c<em>We are content with the returns which have been delivered.<\/em>\u201c<br \/><strong>\u201c<\/strong><em>Calculations from the outside are based upon summary level information and lead to a different answers to what you get from the inside, which include precise costs associated with the individual properties.<\/em>\u201c<\/p>\n<ul class=\"wp-block-list\">\n<li>The board also referred to:\n<ul class=\"wp-block-list\">\n<li>Purchase costs;<\/li>\n<li>Valuations being inherently imprecise;<\/li>\n<li>The mix of properties sold each year;<\/li>\n<li>Factors influencing individual properties, and;<\/li>\n<li>Longer periods of ownership tend to lead to higher gross margins.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>Purchase costs are included within the carrying value of the trading properties:<\/li>\n<\/ul>\n<p class=\"has-global-color-8-background-color has-background\"><em>\u201c<strong>INVENTORIES \u2013 TRADING PROPERTIES<\/strong><br \/>These comprise residential properties, all of which are held for resale, and are shown in the financial statements at the lower of cost and estimated net realisable value. <strong>Cost includes legal fees and commission charges incurred during acquisition<\/strong> together with improvement costs. Net realisable value is the net sale proceeds which the Group expects on sale of a property in its current condition with vacant possession.<\/em>\u201c<\/p>\n<ul class=\"wp-block-list\">\n<li>The board said during the 2024 AGM that it would consider disclosing more information to prove how recent purchases have realised satisfactory gains.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>In the meantime, the lack of any further Allsop-type assessment leaves me to assume the properties not valued by Allsop but still carried on the balance sheet are unlikely to have an eventual sale value vastly in excess of their aforementioned \u00a3267m aggregate purchase price.<\/li>\n<\/ul>\n<h2 class=\"gb-headline gb-headline-edba13c9 gb-headline-text\" id=\"financials-balance-sheet\"><strong>Financials: balance sheet<\/strong><\/h2>\n<ul class=\"wp-block-list\">\n<li>MTVW\u2019s accounts remain very straightforward, with properties and debt the two prime entries.\u00a0<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>The aforementioned \u00a348m spent on new properties alongside a favourable working-capital movement left free cash flow at \u00a310m, with dividends of \u00a319m then increasing FY net debt from \u00a356m to \u00a366m.\u00a0<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>Net debt at \u00a366m is the highest since FY 2014 (\u00a377m) but is equivalent to only 14% of the group\u2019s \u00a3472m total property estate:<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-0bf93d18\"><img loading=\"lazy\" decoding=\"async\" width=\"700\" height=\"400\" class=\"gb-image gb-image-0bf93d18\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart27.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart27.png 700w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart27-300x171.png 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>For perspective, MTVW operated with net debt equivalent to 25% or more of its property estate during FYs 2008, 2009, 2010, 2012 and 2013.\u00a0<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>MTVW\u2019s banking facilities allow borrowings of up to \u00a390m, equivalent to 19% of the total property estate.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>Finance costs of \u00a33.7m for this FY were more than triple the \u00a31.2m for the comparable FY, and implied a 6.3% interest rate on H2\u2019s \u00a366m average debt:<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-144fd2fe\"><img loading=\"lazy\" decoding=\"async\" width=\"700\" height=\"400\" class=\"gb-image gb-image-144fd2fe\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart28.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart28.png 700w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart28-300x171.png 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>My estimated H2 interest cost of 6.3% is the highest since H1 2008 (6.7%).<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>This FY reconfirmed MTVW\u2019s borrowings are variable rate with a margin of approximately 2% above <a href=\"https:\/\/www.bankofengland.co.uk\/markets\/sonia-benchmark\" target=\"_blank\" rel=\"noreferrer noopener\">SONIA<\/a>:<\/li>\n<\/ul>\n<p class=\"has-global-color-8-background-color has-background\"><em>1. The Group has a short-term borrowing facility of \u00a310 million (2022: \u00a310 million) with Barclays Bank. This is due for review in November 2023 and the rate of interest payable is:<\/em><br \/><em>\u2022 <\/em><strong><em>1.6% over base rate <\/em><\/strong><em>on overdraft<\/em><br \/><em>\u2022 Headroom of this facility at 31 March 2023 amounted to \u00a39.94 million (2022: \u00a310 million).<\/em><\/p>\n<p><em>2. The Group has a \u00a360 million (2022: \u00a360 million) long-term revolving loan facility with Barclays Bank with a termination date of March 2027. <\/em><strong><em>The rate of interest is 1.9% above SONIA.<\/em><\/strong><em> The loan is secured by a cross guarantee between Mountview Estates P.L.C. and its subsidiaries. The loan is not repayable by instalments. Headroom under this facility at 31 March 2023 amounted to \u00a320 million (2022: \u00a358 million).<\/em><\/p>\n<p><em>3. The Group has re-negotiated a \u00a320 million long-term revolving loan facility with HSBC Bank. The termination date for this facility is March 2028. <\/em><strong><em>The rate of interest payable on the loan is 2.1% above SONIA. <\/em><\/strong><em>The loan includes a Negative Pledge. The loan is not repayable by instalments. As at 31 March 2023 headroom under this facility amounted to \u00a33.3 million (2022: \u00a32.8 million).\u201d<\/em><\/p>\n<ul class=\"wp-block-list\">\n<li>Assuming gross debt stays at \u00a367m and SONIA stays at 6.95%, annual finance costs would advance from \u00a33.6m to \u00a34.7m, or 119p per share, during FY 2025.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>Paying an extra \u00a31m or so through higher interest will dampen immediate NAV growth\u2026<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>\u2026but should (in theory!) enhance longer-term NAV \u2014 assuming of course the properties purchased by the extra borrowings generate eventual returns well in excess of my projected 6.95% annual debt cost!<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>Board remarks during the 2024 AGM reiterated an informal gearing limit of 25%.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>The aforementioned rental-income surplus of \u00a33m after all maintenance, administration and finance costs would (in theory!) allow MTVW to borrow a further \u00a348m at 6.95%, which would take gearing to 24%.<\/li>\n<\/ul>\n<h2 class=\"gb-headline gb-headline-b798d31a gb-headline-text\" id=\"financials-costs-employees\"><strong>Financials: costs and employees<\/strong><\/h2>\n<ul class=\"wp-block-list\">\n<li>This FY\u2019s \u00a39.5m tax charge was MTVW\u2019s first that was derived under the current 25% UK standard rate, and would have been \u00a37.2m under the previous 19% rate.\u00a0<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>The \u00a32.3m extra tax eroded this FY\u2019s NAV by approximately 58p per share.\u00a0<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>FY administration expenses increased 6% to \u00a37m:<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-3485ae45\"><img loading=\"lazy\" decoding=\"async\" width=\"1070\" height=\"309\" class=\"gb-image gb-image-3485ae45\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-admin-costs.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-admin-costs.png 1070w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-admin-costs-300x87.png 300w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-admin-costs-1024x296.png 1024w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-admin-costs-768x222.png 768w\" sizes=\"auto, (max-width: 1070px) 100vw, 1070px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>Employee costs remain the majority of administration expenses. FY administration expenses comprised employee costs of \u00a35.4m and other costs of \u00a31.6m.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>A significant proportion of employee costs are payments to the directors. FY employee costs consisted of \u00a32.4m paid to the directors and \u00a33.0m covering the salaries of other employees plus the group\u2019s social security expense:<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-f85d49cc\"><img loading=\"lazy\" decoding=\"async\" width=\"1050\" height=\"250\" class=\"gb-image gb-image-f85d49cc\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-employees1.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-employees1.png 1050w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-employees1-300x71.png 300w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-employees1-1024x244.png 1024w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-employees1-768x183.png 768w\" sizes=\"auto, (max-width: 1050px) 100vw, 1050px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>Total FY employee costs advanced 8% following 30% bonuses and \u201c<em>over-inflation salary increases<\/em>\u201c:<\/li>\n<\/ul>\n<p class=\"has-global-color-8-background-color has-background\">\u201c<em>As in recent years, in the light of both their performance and our desire to help protect them from the impact of cost of living factors, which are outside their control, we have taken the opportunity to <\/em><strong><em>award bonuses of over 30% of salary <\/em><\/strong><em>and also, continuing the trend over a number of years, of <\/em><strong><em>granting over-inflation salary increases<\/em><\/strong><em>.<\/em>\u201c<\/p>\n<ul class=\"wp-block-list\">\n<li>FY administration costs excluding employee costs stayed at \u00a31.6m for the third consecutive year:<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-8d73ff03\"><img loading=\"lazy\" decoding=\"async\" width=\"700\" height=\"400\" class=\"gb-image gb-image-8d73ff03\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart29.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart29.png 700w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart29-300x171.png 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>Total administration expenses absorbed 34% of rental revenue during this FY, the highest proportion since FY 2007 (38%):<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-1b64478b\"><img loading=\"lazy\" decoding=\"async\" width=\"700\" height=\"400\" class=\"gb-image gb-image-1b64478b\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart30.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart30.png 700w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart30-300x171.png 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>Mind you, administration expenses versus the value of total properties have remained very consistent at approximately 1.5%:<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-abf62d1b\"><img loading=\"lazy\" decoding=\"async\" width=\"700\" height=\"400\" class=\"gb-image gb-image-abf62d1b\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart31.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart31.png 700w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart31-300x171.png 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>Higher salaries for employees \u2014 and directors! \u2014 may therefore not be entirely out of step with the group\u2019s NAV progress.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>Staff numbers have bobbed between 25 and 30 over time while the total cost per employee has advanced to \u00a3180k:\u00a0<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-f723132b\"><img loading=\"lazy\" decoding=\"async\" width=\"700\" height=\"400\" class=\"gb-image gb-image-f723132b\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/11\/MTVW-FY-2024-spreadsheet-chart32.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/11\/MTVW-FY-2024-spreadsheet-chart32.png 700w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/11\/MTVW-FY-2024-spreadsheet-chart32-300x171.png 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>Exclude the executives, and the average employee salary may be a useful \u00a383.5k:\u00a0<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-3a54736f\"><img loading=\"lazy\" decoding=\"async\" width=\"1088\" height=\"340\" class=\"gb-image gb-image-3a54736f\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-employees3.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-employees3.png 1088w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-employees3-300x94.png 300w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-employees3-1024x320.png 1024w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-employees3-768x240.png 768w\" sizes=\"auto, (max-width: 1088px) 100vw, 1088px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>For perspective, during the last ten years total employee costs have climbed 107% while the ordinary dividend is up 163% and NAV is up 50%.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>MTVW\u2019s chunky salaries may be a by-product of keeping other expenditure to a bare minimum. In particular, audit fees absorbed a tiny 0.13% of this FY\u2019s revenue.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>Nothing is certainly spent on investor communications beyond the annual report, the occasional terse RNS, hosting shareholder meetings and the website.<\/li>\n<\/ul>\n<h2 class=\"gb-headline gb-headline-a1df84d6 gb-headline-text\" id=\"boardroom-protest-votes\"><strong>Boardroom: protest votes<\/strong><\/h2>\n<ul class=\"wp-block-list\">\n<li>MTVW\u2019s shareholders fall into three camps:\n<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>MTVW\u2019s last eight AGMs have witnessed c30% protest votes against:\n<ul class=\"wp-block-list\">\n<li>Re-electing certain non-execs and, recently, both the executives;<\/li>\n<li>Approving the board\u2019s pay, and;<\/li>\n<li>Re-appointing the auditors.\u00a0<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>The protest votes have been led by the Murphy family and connected parties.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>From what I gather, the Murphy family:\n<ul class=\"wp-block-list\">\n<li>Is aggrieved about the board\u2019s (generous) pay;<\/li>\n<li>Has lost the trust of the non-execs to act on the views of all shareholders;<\/li>\n<li>Is frustrated about a general lack of influence at board level, and;<\/li>\n<li>Has become increasingly concerned about the low gains realised on properties purchased following the Allsop valuation (<a href=\"#trading-properties-properties-not-valued-by-allsop\">see Trading properties: properties not valued by Allsop<\/a>).<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>The Murphy family stated during the <a href=\"https:\/\/maynardpaton.com\/2021\/07\/15\/mountview-estates-estimated-nav-still-surpasses-200-per-share-after-remarkable-h2-shows-welcome-1-55x-sales-premium-and-12-5-final-dividend-lift\/#comment-12966\">2021 AGM<\/a> that it was no longer in direct communication with the board and would engage with the directors only through a \u201c<em>public forum<\/em>\u201c. I understand that policy remains in place.<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-2de40f50\"><a href=\"https:\/\/maynardpaton.com\/sharepad\/\" target=\"_blank\" rel=\"noopener noreferrer\"><img loading=\"lazy\" decoding=\"async\" width=\"1030\" height=\"330\" class=\"gb-image gb-image-2de40f50\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-sharepad-dd-talisman.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-sharepad-dd-talisman.png 1030w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-sharepad-dd-talisman-300x96.png 300w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-sharepad-dd-talisman-1024x328.png 1024w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-sharepad-dd-talisman-768x246.png 768w\" sizes=\"auto, (max-width: 1030px) 100vw, 1030px\"\/><\/a><figcaption class=\"gb-headline gb-headline-998ce191 gb-headline-text\"><em><sub>(Source: <a href=\"https:\/\/maynardpaton.com\/sharepad\/\" target=\"_blank\" rel=\"noreferrer noopener\">SharePad<\/a>)<\/sub><\/em><\/figcaption><\/figure>\n<ul class=\"wp-block-list\">\n<li>Judging by the 2023 AGM\u2019s post-meeting chit-chat, let\u2019s just say Mr Pears was not a happy shareholder.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>The Murphy family, (presumably) <a href=\"https:\/\/talismanglobal.co.uk\/\" target=\"_blank\" rel=\"noreferrer noopener\">Talisman<\/a> and other unhappy shareholders prevented the re-election of certain non-execs at the 2024 AGM \u2014 and the seven prior AGMs:<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-9b050185\"><img loading=\"lazy\" decoding=\"async\" width=\"700\" height=\"400\" class=\"gb-image gb-image-9b050185\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart33.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart33.png 700w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart33-300x171.png 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>I don\u2019t know why c243k fewer protest votes \u2014 equivalent to 6% of the share count \u2014 were lodged during 2024 versus 2023.\u00a0<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>I am quite sure the Murphy family (and connections) and Talisman participated in the 2024 AGM voting, given the polls revealed a 32% protest vote against MTVW\u2019s two executives:<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-4a15ae38\"><img decoding=\"async\" class=\"gb-image gb-image-4a15ae38\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-agm-results-non-execs.png\" alt=\"\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>The Murphy family (and connections) and Talisman have clearly become fed-up with the executives, given the votes against the executives have increased from immaterial numbers to 3%, then 9% and now 32% during the last three years.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>Following each AGM, MTVW is entitled to convene a general meeting (GM) and hold a further vote to re-elect the ousted non-execs.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>The ousted non-execs have (to date) all been re-appointed at the subsequent GMs because the Sinclair family concert party can then vote on the non-exec re-elections (unlike at the AGMs, where the concert party is prohibited from voting on particular \u2018independent\u2019 resolutions):<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-617d3371\"><img loading=\"lazy\" decoding=\"async\" width=\"700\" height=\"400\" class=\"gb-image gb-image-617d3371\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart34.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart34.png 700w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart34-300x171.png 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>Stock-market rules dictate any company incurring a 20%-plus AGM or GM protest vote has to contact the unhappy investors and publish an update to all shareholders within six months.\u00a0<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>Six months after the 2023 GM, during May 2024, MTVW announced:<\/li>\n<\/ul>\n<p class=\"has-global-color-8-background-color has-background\">[RNS May 2024] \u201c<em>Following the meeting, the Company identified, as far as possible, those shareholders who did not support the resolutions and attempted to engage with them to seek their views. <strong>Some shareholders did not wish to engage, other shareholders raised matters which are under consideration by the Board and its Committees.<\/strong> The Board is grateful to those shareholders who took part in the engagement process and value the feedback provided. The Company re-affirms its commitment to ongoing shareholder engagement and will continue to offer to have discussions with shareholders and will take into account their concerns and considerations in the future.\u201d\u201d<\/em><\/p>\n<ul class=\"wp-block-list\">\n<li>Board remarks at the 2024 AGM did not reveal which shareholders engaged and which matters were raised:<\/li>\n<\/ul>\n<p class=\"has-global-color-8-background-color has-background\">[AGM 2024] \u201c<em>The discussions were <strong>with shareholders who are not here today<\/strong> and we will not disclose what was said, and certainly not without their permission.<\/em> <em>They raised questions and, where we felt that it was appropriate that we could make the change, we have.<\/em>\u201c<\/p>\n<ul class=\"wp-block-list\">\n<li>I speculate the shareholders who \u201c<em>raised matters which are under consideration by the Board and its Committees\u201d <\/em>included David Pears, who did not attend the 2024 meeting.\u00a0<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>Whether any of the matters raised have actually converted into action remains to be seen.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>But 15 AGM\/GM protest votes since 2017 suggest the \u201c<em>engagement process<\/em>\u201d has no influence on board decisions.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>The ineffective protest votes have not yet persuaded the Murphy family to sell; Companies House indicates Margaret Murphy has maintained a 500k-plus shareholding since at least 1980:<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-ea190ea0\"><img decoding=\"async\" class=\"gb-image gb-image-ea190ea0\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/05\/MTVW-AR-1980-shareholdings-for-H1-2024.png\" alt=\"\"\/><\/figure>\n<figure class=\"gb-block-image gb-block-image-b9d6de73\"><a href=\"https:\/\/maynardpaton.com\/sharepad\/\" target=\"_blank\" rel=\"noopener noreferrer\"><img loading=\"lazy\" decoding=\"async\" width=\"1030\" height=\"330\" class=\"gb-image gb-image-b9d6de73\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-sharepad-dd-mamurphy.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-sharepad-dd-mamurphy.png 1030w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-sharepad-dd-mamurphy-300x96.png 300w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-sharepad-dd-mamurphy-1024x328.png 1024w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-sharepad-dd-mamurphy-768x246.png 768w\" sizes=\"auto, (max-width: 1030px) 100vw, 1030px\"\/><\/a><figcaption class=\"gb-headline gb-headline-a8390a53 gb-headline-text\"><em><sub>(Source: <a href=\"https:\/\/maynardpaton.com\/sharepad\/\" target=\"_blank\" rel=\"noreferrer noopener\">SharePad<\/a>)<\/sub><\/em><\/figcaption><\/figure>\n<ul class=\"wp-block-list\">\n<li>Talisman has not announced any selling since reporting its last purchase during January 2023:<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-8b279900\"><a href=\"https:\/\/maynardpaton.com\/sharepad\/\" target=\"_blank\" rel=\"noopener noreferrer\"><img loading=\"lazy\" decoding=\"async\" width=\"1240\" height=\"140\" class=\"gb-image gb-image-8b279900\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-sharepad-talisman.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-sharepad-talisman.png 1240w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-sharepad-talisman-300x34.png 300w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-sharepad-talisman-1024x116.png 1024w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-sharepad-talisman-768x87.png 768w\" sizes=\"auto, (max-width: 1240px) 100vw, 1240px\"\/><\/a><figcaption class=\"gb-headline gb-headline-e26f855a gb-headline-text\"><em><sub>(Source: <a href=\"https:\/\/maynardpaton.com\/sharepad\/\" target=\"_blank\" rel=\"noreferrer noopener\">SharePad<\/a>)<\/sub><\/em><\/figcaption><\/figure>\n<h2 class=\"gb-headline gb-headline-ab3193c0 gb-headline-text\" id=\"boardroom-new-non-executive-executive-pay\"><strong>Boardroom: new non-executive and executive pay<\/strong><\/h2>\n<ul class=\"wp-block-list\">\n<li>The ongoing search to find a replacement non-executive was discussed at length during the 2024 AGM.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>The replacement non-exec will be \u2018independent\u2019 of the Sinclair family concert party, and could therefore allow the Murphy family and other unhappy shareholders to enjoy greater influence at board level.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>The preceding FY claimed the replacement non-exec would be recruited within \u201c<em>six to nine months<\/em>\u201d:<\/li>\n<\/ul>\n<p class=\"has-global-color-8-background-color has-background\">[FY 2023] \u201c<strong><em>The Nomination Committee has commenced its search for a new, suitably experienced and qualified independent Non- Executive Director<\/em><\/strong><em> and has engaged an external recruitment consultant Stephenson Executive Search Ltd, which has no other connection with the Group. <\/em><strong><em>The Nomination Committee is reasonably confident that it will be in a position to complete the recruitment and appointment process within the next six to nine months<\/em><\/strong><em>. It is envisaged that the new independent NED will have a short period of overlap with Ms Archibald to enable a smooth and seamless transition of Ms Archibald\u2019s role and duties as chair of the Remuneration Committee and her other committee membership roles and responsibilities.<\/em><\/p>\n<ul class=\"wp-block-list\">\n<li>The 2023 annual report was published on 28 July 2023, and therefore the new appointment ought to have been announced by the end of April 2024.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>This FY revealed:\n<ul class=\"wp-block-list\">\n<li>No replacement had been found, and;<\/li>\n<li>The outgoing non-exec would now stay on until 31 March 2025:<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p class=\"has-global-color-8-background-color has-background\">\u201c<em>In 2023 the Committee were aware that Mhairi Archibald\u2019s service agreement covering her third tenure as a NED was due to end on 30 June 2023 and at that point would reach the nine-year limit usually applicable to NED tenures in accordance with the 2018 Code and related guidance. The Committee therefore started its search for a new, suitably experienced and qualified independent NED and engaged an external recruitment consultant Stephenson Executive Search Ltd, which has no other connection with the Group, for this purpose.\u00a0<\/em><\/p>\n<p><em>The search is on-going and, while we have yet to fill the position, the Committee remains focused on completing the search and appointment. In the meantime, <\/em><strong><em>the Committee has agreed to extend Ms Archibald\u2019s contract until 31 March 2025 with the aim of completing the new appointment and enabling a short period of overlap with Ms Archibald<\/em><\/strong><em>. This will ensure a smooth and seamless transition of Ms Archibald\u2019s role and duties as chair of the Remuneration Committee and her other committee membership roles and responsibilities.<\/em>\u201d\u00a0<\/p>\n<ul class=\"wp-block-list\">\n<li>Corporate-governance protocols say non-execs should serve no more than nine years on the same board. MTVW\u2019s outgoing non-exec will have served ten years and nine months if\/when she leaves the board on 31 March 2025.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>Board remarks at the 2024 AGM about the non-exec search can be summarised as:\n<ul class=\"wp-block-list\">\n<li>A number of candidates were interviewed;<\/li>\n<li>None were deemed suitable;<\/li>\n<li>They were unsuccessful for a variety of reasons (including \u201c<em>the chemistry was not right<\/em>\u201c), and;<\/li>\n<li>The search continues with further interviews in the coming weeks.\u00a0<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>The circular included a resolution asking shareholders to approve lifting the total fees paid to the non-execs from \u00a3250k to \u00a3350k:<\/li>\n<\/ul>\n<p class=\"has-global-color-8-background-color has-background\">[Circular October 2024] \u201c<em>A third resolution is included in the notice of general meeting that addresses the issue of directors\u2019 fees. The Company will seek shareholders\u2019 approval to amend Article 96 of the Company\u2019s Articles of Association <\/em><strong><em>to increase the level of total fees payable to Non-Executive Directors from \u00a3250,000 to \u00a3350,000. <\/em><\/strong><em>This will provide sufficient headroom for the appointment of an additional NED which may occur within the next few months, taking the total of NEDs to four (from three) to allow for a period of overlap between the incoming and outgoing NEDs.<\/em>\u201d\u00a0<\/p>\n<ul class=\"wp-block-list\">\n<li>For this FY, the non-execs were paid a total \u00a3194k and will receive a total \u00a3200k for FY 2025:<\/li>\n<\/ul>\n<p class=\"has-global-color-8-background-color has-background\">\u201c<strong><em>The Board considered the fees payable to the Non-Executive Directors and approved increases of \u00a32k for each NED<\/em><\/strong><em> thus \u00a3108k to \u00a3110k for the Chairman, an increase of 1.85%, and from \u00a343k to \u00a345k for other Non-Executive Directors representing a 4.65% increase year on year.\u201d<\/em><\/p>\n<ul class=\"wp-block-list\">\n<li>The existing \u00a3250k limit on total non-exec pay ought to cover any overlap between the replacement non-exec and the outgoing non-exec, given:\n<ul class=\"wp-block-list\">\n<li>Total non-exec fees for FY 2025 will be \u00a3200k;<\/li>\n<li>The outgoing non-exec will be paid \u00a345k during FY 2025;<\/li>\n<li>Her replacement may also collect \u00a345k, and;<\/li>\n<li>The period of overlap should not be too long.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>I suppose the new \u00a3350k limit on total non-exec pay can be viewed in two ways.\u00a0<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>Either MTVW could recruit a renowned non-exec \u2018heavyweight\u2019, who demands a hefty fee but who will truly represent independent shareholders at board level.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>Or MTVW could recruit another compliant non-exec, who demands a hefty fee to compensate for being subject to regular protest votes and awkward questions at shareholder meetings.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>The circular said further non-exec interviews would take place:<\/li>\n<\/ul>\n<p class=\"has-global-color-8-background-color has-background\">[Circular October 2024] \u201c<em>The Board is progressing its search for a new NED and has <\/em><strong><em>a shortlist of candidates to interview.<\/em><\/strong>\u201c<\/p>\n<ul class=\"wp-block-list\">\n<li>The absence of an appointment is not encouraging for the Murphy family and other unhappy shareholders. The worry is the board\u2019s nomination committee, which is chaired by chief executive Duncan Sinclair, is not pursuing the appointment with suitable urgency:\u00a0<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-769756c3\"><img loading=\"lazy\" decoding=\"async\" width=\"1050\" height=\"290\" class=\"gb-image gb-image-769756c3\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-nomcom.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-nomcom.png 1050w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-nomcom-300x83.png 300w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-nomcom-1024x283.png 1024w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-nomcom-768x212.png 768w\" sizes=\"auto, (max-width: 1050px) 100vw, 1050px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>Perhaps the board has struggled to find a qualified non-exec who meets the appropriate diversity criteria. This FY stated:<\/li>\n<\/ul>\n<p class=\"has-global-color-8-background-color has-background\">\u201c<em>The Board is aware that the target in LR 9.8.6 R(9)(a)(ii), <strong>having at least one Board member from a minority ethnic background, has not been met<\/strong> and its consideration will form part of its deliberations in building a diverse and inclusive culture on the Board.\u201d <\/em><\/p>\n<ul class=\"wp-block-list\">\n<li>The outgoing non-exec is chair of the remuneration committee, and I speculate the replacement non-exec will then take that role:<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-4efbf3ba\"><img loading=\"lazy\" decoding=\"async\" width=\"1050\" height=\"320\" class=\"gb-image gb-image-4efbf3ba\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/11\/MTVW-AR-2024-results-remcom.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/11\/MTVW-AR-2024-results-remcom.png 1050w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/11\/MTVW-AR-2024-results-remcom-300x91.png 300w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/11\/MTVW-AR-2024-results-remcom-1024x312.png 1024w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/11\/MTVW-AR-2024-results-remcom-768x234.png 768w\" sizes=\"auto, (max-width: 1050px) 100vw, 1050px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>Chairing the remuneration committee is of course a vital board role given the history of executive pay.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>In particular, the chief executive has collected a bonus every year since at least 2001, and such bonuses have pushed his total pay beyond \u00a31m since FY 2020:<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-4a1db24e\"><img loading=\"lazy\" decoding=\"async\" width=\"700\" height=\"400\" class=\"gb-image gb-image-4a1db24e\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart35.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart35.png 700w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart35-300x171.png 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>The feeling among many AGM attendees over the years is the executives are paid handsomely for essentially:\n<ul class=\"wp-block-list\">\n<li>Putting vacant properties into auction;<\/li>\n<li>Collecting rent, and;<\/li>\n<li>Buying properties during recent years that may not have earned worthwhile gains on disposal.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>MTVW is the only company I know that includes executive-remuneration ratios within its annual reports:<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-dc37b769\"><img loading=\"lazy\" decoding=\"async\" width=\"1060\" height=\"630\" class=\"gb-image gb-image-dc37b769\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-5yr-summary.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-5yr-summary.png 1060w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-5yr-summary-300x178.png 300w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-5yr-summary-1024x609.png 1024w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-5yr-summary-768x456.png 768w\" sizes=\"auto, (max-width: 1060px) 100vw, 1060px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>The remuneration ratios may not be strictly accurate, as I believe the executive-remuneration figures exclude the associated social security costs:<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-c014095a\"><img loading=\"lazy\" decoding=\"async\" width=\"1050\" height=\"250\" class=\"gb-image gb-image-c014095a\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-employees2.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-employees2.png 1050w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-employees2-300x71.png 300w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-employees2-1024x244.png 1024w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-employees2-768x183.png 768w\" sizes=\"auto, (max-width: 1050px) 100vw, 1050px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>Total executive pay has been equivalent to a consistent 0.5% of the total property estate:<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-366fcd87\"><img loading=\"lazy\" decoding=\"async\" width=\"700\" height=\"400\" class=\"gb-image gb-image-366fcd87\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart36.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart36.png 700w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart36-300x171.png 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>0.5% of the total property estate does not sound a lot, but starts to add up given the total property estate advanced by just 12% \u2014 or 2.3% per annum \u2014 between FY 2019 and this FY.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>One positive about the board\u2019s remuneration is the absence of a share-option scheme. MTVW has in fact not issued any new shares since at least 1979.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>The sole non-exec who is not voted off the board at every AGM is Dr Andrew Williams, who is a grandson of MTVW co-founder Frank Sinclair.\u00a0<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>Dr Williams is a member of the Sinclair family concert party (but has not been listed as such \u2014 see Sinclair family concert party) and apparently \u201c<em>represents the interests of the family and private shareholders generally<\/em>\u201c:<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-3267b9a0\"><img loading=\"lazy\" decoding=\"async\" width=\"830\" height=\"750\" class=\"gb-image gb-image-3267b9a0\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-non-execs.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-non-execs.png 830w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-non-execs-300x271.png 300w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-AR-2024-results-non-execs-768x694.png 768w\" sizes=\"auto, (max-width: 830px) 100vw, 830px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>I attended MTVW\u2019s <a href=\"https:\/\/maynardpaton.com\/2019\/07\/15\/mountview-estates-2019-results-show-encouraging-h2-as-nav-climbs-to-94-per-share-and-closer-to-97-share-price\/#comment-12556\">2019<\/a>, <a href=\"https:\/\/maynardpaton.com\/2021\/07\/15\/mountview-estates-estimated-nav-still-surpasses-200-per-share-after-remarkable-h2-shows-welcome-1-55x-sales-premium-and-12-5-final-dividend-lift\/#comment-12966\">2021<\/a>, <a href=\"https:\/\/maynardpaton.com\/2023\/10\/28\/mountview-estates-lowly-50-fy-gross-margin-despite-record-395k-average-sales-price-signals-property-purchases-realising-limited-gains-and-leaves-100-shares-trading-at-nav\/#comment-13264\">2023<\/a> and 2024 AGMs and Dr Williams did not speak during the formal Q&amp;A sessions at all four events.<\/li>\n<\/ul>\n<h2 class=\"gb-headline gb-headline-605b3d3d gb-headline-text\" id=\"sinclair-family-concert-party\"><strong>Sinclair family concert party<\/strong><\/h2>\n<ul class=\"wp-block-list\">\n<li>The Sinclair family concert party is led by MTVW chief executive Duncan Sinclair, and eight years of the party outvoting unhappy shareholders prove the arrangement effectively controls the group.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>MTVW first formally mentioned the concert party during FY 2005, at which point the aggregate party shareholding was \u201c<em>approximately 53%<\/em>\u201c.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>Leading concert-party members Mr Alistair Sinclair, Mrs Elizabeth Langrish-Smith, Mrs Angela Williams and Mrs Susan Simkins are children of MTVW co-founder Frank Sinclair.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>Chief executive Duncan Sinclair is the son of MTVW co-founder Irving Sinclair.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>I believe every other concert-party member listed above is a relation of either Mrs Elizabeth Langrish-Smith, Mrs Angela Williams or Mrs Susan Simkins.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>The question for unhappy shareholders is how long can the Sinclair family concert party remain intact to retain effective control of the group?<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/find-and-update.company-information.service.gov.uk\/company\/00328020\" target=\"_blank\" rel=\"noreferrer noopener\">Companies House<\/a> reveals the leading party members are between 69 and 77 years old:\n<ul class=\"wp-block-list\">\n<li>Duncan Sinclair (born October 1947);<\/li>\n<li>Mr Alistair Sinclair (born September 1949);<\/li>\n<li>Mrs Elisabeth Langrish-Smith (born April 1952);<\/li>\n<li>Mrs Angela Williams (born April 1952), and;<\/li>\n<li>Mrs Susan Simkins (born May 1955).<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>At some point the collective 50.4% will be controlled entirely by younger members of the Sinclair family, who may have an alternative approach to handling a \u00a3177m aggregate investment.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>After the \u00a3315k disposal by the wife of Dr Williams, other concert-party members need only sell shares worth \u00a31m or so at \u00a390 for the concert party\u2019s stake to fall below 50%\u2026<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>\u2026which may then allow the concert party to be outvoted.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>No wonder board remarks at the 2024 AGM about the concert party\u2019s holding were limited to simply \u201c<em>It\u2019s over 50%<\/em>\u201c.\u00a0<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>From what I can tell from my AGM attendances and messages via my <a href=\"https:\/\/maynardpaton.com\/contact\/\">contact page<\/a>, the concert party has not lined up a family member to one day succeed chief executive Duncan Sinclair.\u00a0<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>Back in 2014, MTVW\u2019s then chairman had indicated succession planning was underway:<\/li>\n<\/ul>\n<p class=\"has-global-color-8-background-color has-background\">[FY 2014] \u201c<em>Duncan Sinclair has been with the Company for 43 years, during which he has occupied the positions of Company Secretary, Director, Executive Chairman and Chief Executive. The Company has grown and developed significantly since Duncan became Chief Executive in 1990. <\/em><strong><em>The search to find and establish Duncan\u2019s successor is on going and now intensifying<\/em><\/strong><em>. This is an important phase in the Company\u2019s development.<\/em>\u201c<\/p>\n<ul class=\"wp-block-list\">\n<li>But a year later that chairman had left and Duncan Sinclair said he was staying put:<\/li>\n<\/ul>\n<p class=\"has-global-color-8-background-color has-background\">[FY 2015] \u201c<em>Our management teams continue to evolve and it may become appropriate to appoint one or more of these personnel to the Board. The continuing good results and the sound financial structure of the Company are a testimony to tried and trusted methods and tried and trusted personnel. Whilst we are aware of the need for our management structure to evolve for the future benefit of the Company, <\/em><strong><em>our results do not suggest that radical surgery is needed as a matter of urgency<\/em><\/strong><em>.<\/em><\/p>\n<p>\u201c<em>The default retirement age has been abolished and shareholders will be aware that many companies are being well served by men and women who would once have been regarded as being of advanced years. I may be considered to fall into this category, but <\/em><strong><em>I will be happy to step aside when we have in position those of proven ability who are capable of producing results at the level for which I have been responsible for an extended period of years<\/em><\/strong><em>.<\/em>\u201c<\/p>\n<ul class=\"wp-block-list\">\n<li>With Duncan Sinclair still in charge today, that 2015 text suggests MTVW has never found anybody to match his \u201c<em>proven ability<\/em>\u201d.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>At some point of course, a new chief executive will be needed and, without an obvious family successor, the Sinclair family concert party could be at risk of losing its grip on the boardroom.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>But the wait for a leadership change could be protracted. Chief executive Duncan Sinclair is 77 and his father, co-founder Irving Sinclair, retired from the board at 86.\u00a0<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>Still, MTVW has always been a company for long-haul investors. The group was established during 1937 and floated during 1960, since when the shares have climbed from (an estimated) 11p to \u00a390 with at least another \u00a360 per share of dividends declared along the way.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>Family shareholders (even unhappy ones) have generally kept their shares through thick and thin\u2026 attracted presumably by the genuine asset backing, reliable dividend and the prospect one day of a trade sale when family leadership is no longer available.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>Board remarks during the 2024 AGM provided encouragement that a trade sale may one day occur. When asked about what happens to MTVW when the shrinking pool of regulated tenancies finally disappears, the chief executive said:<\/li>\n<\/ul>\n<p class=\"has-global-color-8-background-color has-background\">[AGM 2024] \u201c<em>We will have to consider what else to do. It could be that we just gradually pay dividends and ultimately return the capital and wind up the company in that manner. On the other hand, there may be another company that has other specialisations but is <\/em><strong><em>very capable of taking the rump of our portfolio, who may come in and buy that rump<\/em><\/strong><em>. We\u2019re not very near that date yet.<\/em>\u201c<\/p>\n<ul class=\"wp-block-list\">\n<li>In the meantime, one could surmise while MTVW patiently waits for its regulated properties to be vacated to earn a suitable return\u2026<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>\u2026 unhappy shareholders are patiently waiting for the boardroom to be vacated to earn a suitable return.<\/li>\n<\/ul>\n<h2 class=\"gb-headline gb-headline-0651f5de gb-headline-text\" id=\"valuation\"><strong>Valuation<\/strong><\/h2>\n<ul class=\"wp-block-list\">\n<li>MTVW\u2019s shares might be attracting bid interest today were it not for the majority concert-party holding.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>I calculate the shares could be worth \u00a3182 were all of the group\u2019s regulated tenancies to end immediately and the properties then sold at a fair market value.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>The following table outlines my \u00a3182 sums:<\/li>\n<\/ul>\n<div class=\"gb-container gb-container-238a7f06\">\n<table id=\"tablepress-1005\" class=\"tablepress tablepress-id-1005\">\n<tbody>\n<tr class=\"row-1\">\n<td class=\"column-1\">Property stock Sept 2014 (\u00a3k)<\/td>\n<td class=\"column-2\">317,651<\/td>\n<\/tr>\n<tr class=\"row-2\">\n<td class=\"column-1\">Less sold Allsop-assessed stock (\u00a3k)<\/td>\n<td class=\"column-2\">(137,904)<\/td>\n<\/tr>\n<tr class=\"row-3\">\n<td class=\"column-1\"\/>\n<td class=\"column-2\">179,747<\/td>\n<\/tr>\n<tr class=\"row-4\">\n<td class=\"column-1\">Allsop-premium-to-book<\/td>\n<td class=\"column-2\">2.10x<\/td>\n<\/tr>\n<tr class=\"row-5\">\n<td class=\"column-1\">Sold-premium-to-Allsop <\/td>\n<td class=\"column-2\">1.57x<\/td>\n<\/tr>\n<tr class=\"row-6\">\n<td class=\"column-1\"\/>\n<td class=\"column-2\">591,558<\/td>\n<\/tr>\n<tr class=\"row-7\">\n<td class=\"column-1\"\/>\n<td class=\"column-2\"\/>\n<\/tr>\n<tr class=\"row-8\">\n<td class=\"column-1\">Stock purchased since Sept 2014<\/td>\n<td class=\"column-2\">266,651<\/td>\n<\/tr>\n<tr class=\"row-9\">\n<td class=\"column-1\"\/>\n<td class=\"column-2\"\/>\n<\/tr>\n<tr class=\"row-10\">\n<td class=\"column-1\"><strong>Possible property stock value (\u00a3k)<\/strong><\/td>\n<td class=\"column-2\"><strong>858,209<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><!-- #tablepress-1005 from cache -->\n<\/div>\n<ul class=\"wp-block-list\">\n<li>I have taken the estate\u2019s September 2014 value of \u00a3318m and subtracted the (estimated) \u00a3138m book value of Allsop-assessed properties sold since that date.\u00a0<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>I then multiplied the \u00a3180m remainder by the 2.1x \u2018Allsop-premium-to-book\u2019 multiple and then added the 57% \u2018sold-premium-to-Allsop\u2019 gain that was realised during this FY.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>I arrived at a \u00a3592m estimate for all of MTVW\u2019s properties that were owned at September 2014 but have yet to be sold.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>Since September 2014, MTVW has acquired additional properties with a \u00a3267m book value.\u00a0<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>Adding the \u00a3592m and the \u00a3267m together gives \u00a3858m.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>This next table adjusts that \u00a3858m for 25% taxation, the \u00a326m conventional property portfolio, net debt and other liabilities to give a possible NAV of \u00a3708m or \u00a3182 per share:<\/li>\n<\/ul>\n<div class=\"gb-container gb-container-81b126f2\">\n<table id=\"tablepress-1006\" class=\"tablepress tablepress-id-1006\">\n<tbody>\n<tr class=\"row-1\">\n<td class=\"column-1\">Possible property stock value (\u00a3k)<\/td>\n<td class=\"column-2\">858,209<\/td>\n<\/tr>\n<tr class=\"row-2\">\n<td class=\"column-1\">Less tax at 25% (\u00a3k)<\/td>\n<td class=\"column-2\">(102,953)<\/td>\n<\/tr>\n<tr class=\"row-3\">\n<td class=\"column-1\">Plus other investments (\u00a3k)<\/td>\n<td class=\"column-2\">25,568<\/td>\n<\/tr>\n<tr class=\"row-4\">\n<td class=\"column-1\">Less net debt (\u00a3k)<\/td>\n<td class=\"column-2\">(65.761)<\/td>\n<\/tr>\n<tr class=\"row-5\">\n<td class=\"column-1\">Less other liabilities (\u00a3k)<\/td>\n<td class=\"column-2\">(6,573)<\/td>\n<\/tr>\n<tr class=\"row-6\">\n<td class=\"column-1\"\/>\n<td class=\"column-2\"\/>\n<\/tr>\n<tr class=\"row-7\">\n<td class=\"column-1\"><strong>Possible NAV (\u00a3k)<\/strong><\/td>\n<td class=\"column-2\"><strong>708,490<\/strong><\/td>\n<\/tr>\n<tr class=\"row-8\">\n<td class=\"column-1\"><strong>Possible NAV per share (\u00a3)<\/strong><\/td>\n<td class=\"column-2\"><strong>181.71<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><!-- #tablepress-1006 from cache -->\n<\/div>\n<ul class=\"wp-block-list\">\n<li>My estimated NAV sums are not perfect, and the following questions remain unanswered:\n<ul class=\"wp-block-list\">\n<li>How long will MTVW take to sell all of its properties?<\/li>\n<li>Will future house-price inflation compensate for being unable to sell all the properties immediately?<\/li>\n<li>How relevant is the 2014 Allsop assessment today?<\/li>\n<li>Will properties bought since the 2014 Allsop assessment continue to be sold close to cost price?<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>MTVW\u2019s shares have drifted lower to trade 12% below NAV:<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>The best time to buy appears to be when the market cap trades at (or below) NAV, at which point no future gains from any property purchases are priced into the valuation.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>What future gains could lie ahead?<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>As noted earlier, the combined additional NAV and dividend return over the last five years comes to \u00a3141m or 38% \u2014 equivalent to a compound average return of 6.7%:<\/li>\n<\/ul>\n<figure class=\"gb-block-image gb-block-image-dcd6e91b\"><img loading=\"lazy\" decoding=\"async\" width=\"700\" height=\"400\" class=\"gb-image gb-image-dcd6e91b\" src=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart06.png\" alt=\"\" srcset=\"https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart06.png 700w, https:\/\/maynardpaton.com\/wp-content\/uploads\/2024\/10\/MTVW-FY-2024-spreadsheet-chart06-300x171.png 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\"\/><\/figure>\n<ul class=\"wp-block-list\">\n<li>The next five years repeating that 6.7% annualised return may not enthuse prospective investors given:\n<ul class=\"wp-block-list\">\n<li>MTWV\u2019s returns have been declining over time;<\/li>\n<li>Post-2014 property purchases appear to have realised very modest gains;<\/li>\n<li>Ongoing protest votes have not persuaded the board to undertake a new Allsop-type valuation, and;<\/li>\n<li>New legislation will probably increase costs and reduce future margins.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>Perhaps a discount to NAV is actually now required to generate suitable investment returns.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>The 12% discount to NAV is the steepest for more than ten years:<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>For further perspective, the shares sank to \u00a321 at the depths of the 2008 banking crash, giving buyers a 0.44x NAV multiple versus the then \u00a348 per share NAV.<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>Taking a positive view, the aforementioned 2014 Allsop assessment pushed the shares to \u00a3125 during early 2015 as buyers paid 1.69x the then \u00a374 per share NAV:<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>Another Allsop assessment divulging further \u2018hidden value\u2019 could easily prompt a favourable price-to-NAV re-rating.\u00a0<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>Occasional bouts of wider market optimism can also push the share price well beyond NAV. In particular:\n<ul class=\"wp-block-list\">\n<li>The \u00a3145 peak during 2021 was equivalent to 1.42x the then \u00a3102 per share NAV, and;<\/li>\n<li>The \u00a380 peak during 2007 was equivalent to 1.75x the then \u00a346 per share NAV.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>At least future returns from today should be front-loaded by dividends: \u00a0<\/li>\n<\/ul>\n<ul class=\"wp-block-list\">\n<li>The illustrious ordinary payout supplies a 5.8% income at a \u00a390 share price \u2014 the highest yield for at least 30 years excluding the banking crash.<\/li>\n<\/ul>\n<p><strong>Maynard Paton<\/strong><\/p>\n<\/p><\/div>\n\n","protected":false},"excerpt":{"rendered":"<p>02 November 2024By Maynard Paton FY 2024 results summary for Mountview Estates (MTVW): A reasonable FY performance, which showed revenue up 8%, profit up 22% and the final dividend up 10% after buyers looking for \u201cimprovement potential\u201d paid \u201cgood prices\u201d for a more normal \u201cprofile\u201d of properties. Sales by larger landlords allowed MTVW to spend [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[96],"tags":[24581,18842,5469,19116,11071,46142,22287,31178,91931,50933,57651,92991,20724,92990,14371,42448,91934,92053,9792,1003],"dealstore":[],"offerexpiration":[],"class_list":["post-257472","post","type-post","status-publish","format-standard","hentry","category-investing","tag-admits","tag-consecutive","tag-discount","tag-estates","tag-gains","tag-gross","tag-margin","tag-maynard","tag-mountview","tag-nav","tag-paton","tag-post2014","tag-purchases","tag-reemphasises","tag-shares","tag-steepest","tag-sub60","tag-subpar","tag-trade","tag-years"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.4 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Maynard Paton | MOUNTVIEW ESTATES: \u00a390 Shares Trade 12% Below NAV \u2014 Steepest Discount For More Than 10 Years \u2014 After FY 2024 Admits Third Consecutive Sub-60% Gross Margin And Re-Emphasises Subpar Gains From Post-2014 Purchases - Som2ny Network<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fivemor.com\/?p=257472\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Maynard Paton | MOUNTVIEW ESTATES: \u00a390 Shares Trade 12% Below NAV \u2014 Steepest Discount For More Than 10 Years \u2014 After FY 2024 Admits Third Consecutive Sub-60% Gross Margin And Re-Emphasises Subpar Gains From Post-2014 Purchases - Som2ny Network\" \/>\n<meta property=\"og:description\" content=\"02 November 2024By Maynard Paton FY 2024 results summary for Mountview Estates (MTVW): A reasonable FY performance, which showed revenue up 8%, profit up 22% and the final dividend up 10% after buyers looking for \u201cimprovement potential\u201d paid \u201cgood prices\u201d for a more normal \u201cprofile\u201d of properties. 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