It is as I suspected. The reason why the buy-back hasn't...

It is as I suspected. The reason why the buy-back hasn't happened is CASH...or more succinctly the much needed cash to fund the expanding stock of developed ILU's. Remember they announced a further$70m borrowing facility in August and we all thought this was the fodder needed to fund buy back...but no, it was there to prop up the inventory. It’s very likely on the sales figures announced today that there will be some 713 new ILU’s for sale at June 2019 with an estimated value of around $420m…up from $347m at June 2018.

But, cash wise the company does have some options. They are putting the US assets up for sale; hopefully, it will realise cost of around $50m…why they ever bought it in the first place is beyond me. The Currumbin land should pull around $25m and they will realise cash by selling a few smaller villages. INA ditched a few in Tasmania last year and got good coin approximating NTA.

AOG loan facilities have many months to run, so no problem there.

The 1HFY19 results will be terrible as they are indicating a strong skew towards 2H.

The sales rate of existing stock will be around 7.5% of total in FY19 whereas the expected for the industry is around 12%. Excluding a write down of assets to fair value, I still see eps of 10c to 13c plus and a dividend of around 5c to 7c. I bought heavily today and now have more than the equivalent of my ‘ILU’ in AOG shares.   

The real positive in an otherwise fairly standard and sombre announcement by a property-based company is the action happening in a corporate sense. For those old enough to remember the good old cowboy and Indian movies, it seems the cavalry have mounted their horses. When they will arrive and how much they have in their saddlebags are the burning questions.