A quick update to the recent movement I have in my portfolio.
I managed to get through the queue by buying 10,000 shares of FCL at a share price of $1.48. Selling pressure has been strong in recent weeks, and we can see again that today it closes with a rather huge volume, given the low liquidity this counter have.
The Group is gaining momentum with building up a guardian of their industrial properties, especially after they have listed their industrial arms in Fraser Logistics Trust. The latest strategic investment in “Project Titan” with SET listed Ticon has attested to that. The latter having 18 industrial estates and 33 logistics locations under their development.
In Australia itself, the Group continued to extend their footprint by expanding their presence into the Sydney Western suburb area for their industrial properties development.
Fraser Logistic Trust should benefit over time from the aggressive development and strategic investment from the sponsor so it’ll be close in my watchlist.
The Group paid out 8.6 cents in total the last two years as dividends and the management guided that they may do the same for this financial year. This would translate into a decent 5.8% based on the current price.
Some people are worried about their high gearing, but you can see based on the nature of their income and coverage ratio that they are at a very comfortable position.
Their current recurring income is expected to be at around $698m. This was based on the lease and the listing of the 4 Reits under their arm which they have a stake in. To pay 8.6 cents dividends, the company would need to fork out about $525m. This would be in their comfortable range of doing so.
I think that’s just about the thesis for me coming into this play, as with other developers which I have previously vested in.
Some selling pressure has begun, perhaps something is brewing.