ARM Properties Plc PP

[zainabusman]

Originally Posted by wanaj0

Beachwood is so far that they were not able to sell to many subscribers. This invariable affected the cashflow and their ability to deliver. That is the crux of the matter.

Even delivering Fara Park was a challenge.

If you notice, they are not keen on developing virgin land in the immediate future.

A more experienced developer would have known that real estate is all about location. If u get that wrong, it becomes difficult to make money.

[Michael]

Originally Posted by tobenna

Not sure why Avocado and Apache are not being specific about the issues with ARM.

Let me help clarify.
ARM Properties owns Beechwood Estate somewhere along the Lekki/Ajah axis that was promised to buyers to be completed in December 2006.
The estate is not complete.
No communication whatsoever on what the issues are or where the delays are coming from.
Except a rather impolite letter to purchasers threatening revocation of the properties where 50% or less had been deposited as down payment and imposing interest rates.
The offer prospectus does not go into any details on this property. Infact, it seems as if they are trying to release as little information on this as possible.
This is not just any estate project like Apache seems to imply. It is a multi million dollar project with 920 plots and hundreds of dissatisfied customers that was advertised as completely sold out in 2007. Now the prospectus says 80% sold out.
For a property company with about 10 properties developed so far to have their biggest or 2nd biggest project after Fara Park having issues is a serious indication of what they can do with investor funds.

Unfortunately, I have a soft spot for ARM as an investing arm.
That's why this case is not in court yet.

As an aside, why advertise Adiva Plainfields and the website www.myadiva.com in the prospectus when the domain has not even been registered? Thats kinda like putting a fake office address up isn't it?
Someone smart, anybody, go register the domain and wait for them to come and buy the name from you.

A company that is that disrespectful to its clients will not do well by shareholders either. On Principle I will neither Invest here nor encourage others to do so. Mind you The Forward looking P/E based on the ARM forecast is only as good as the people behind it.

[waaan5]

Originally Posted by zainabusman

A more experienced developer would have known that real estate is all about location. If u get that wrong, it becomes difficult to make money.

Precisely yes. For potential buyers just get this - location,location,location- should be a paramount consideration when it comes to making real estate investments if you are interested in appreciation. From the list of real estate investments being considered by ARM (in their pp doc.), have they learned this?

[Avocado]

Excellent, the resurrection of this discussion.

Apparently, ARM as an investment venture have cultured soft spots with many investors; this isn't bad.

Tobenna: www.myadiva.com is already taken; they (or someone else, quite unlikely though) got it registered. The conclusion is irresistible, ARM disseminated material untruth about Beechwood; this may not seem to be much in the Nigerian field, but ARM got their reputation built by solid associations with credible brands. wanaj0: I thought Fara was a (partial, if) success until a few stories emerged. Beechwood has become a full-blown nightmare. And ARM have been carrying on secure in the knowledge that nothing would happen by way of legal retribution.

A small note: "falling in love" with a company is unwise, especially when the company screws up with investors. And ARM has no exceptional track record in real estate; the latest document has more than a tiny bit of a rose-coloured outlook; and if there's mould on the surface of this loaf, its roots are quite surely deep.
.

[Monwowo]

I was looking at the ARM properties Plc "teaser" and there were some interesting things there regarding this placement. ARM claimed to have 12yrs of experience in this sector and I did not see the financial statement for at least the last 5yrs to see how they did. For the current yr (2008), the PAT is just 28M. This leaves them with EPS of 2k and PE of 208 (as of July 4, 2008 analysis date in the "teaser").

They however, tried to do a sector comparison with Union homes and Aso savings (UPDC - this is what was in the teaser and I assumed this referred to Aso savings from the discussion in the document) with respective PE of 25.67 and 11.65 respectively (as of July 4 closing prices).

Erroneous, ARM claimed they were better investment because their PE was 4.44. This 4.44 is a forward PE for 2009. Apple to apple, for 2008, ARM is at PE of 208 and the Union homes at 25.67 and UPDC (this is what was in the teaser and I assumed this referred to Aso savings from the discussion in the document) at 11.65. ARM needs to use the forward PEs of 2009 for these companies to make a comparism.

ARM properties has good investment philosophy and good business strategies but the numbers must have been mis-represented to present a "rosy" outlook. To arrive at the dividend pay for 2009 and 2010, note that they estimated a payout rate of 80%. That is a bit too high for a "new" company that needs fund to establish, to be a market leader in their sector.

In my view, the investment is expensive at the offer price unless I missing something.

[Babs_O]

Reading through all comments, this PP is a no go area. The chances of making a loss is very very high. No need for the trouble of filling a form and cheque and locking up ones money for years. Better to give the money to a housing charity if one exists in Nigeria.

[waaan5]

Originally Posted by Avocado

Excellent, the resurrection of this discussion.

Apparently, ARM as an investment venture have cultured soft spots with many investors; this isn't bad.

Tobenna: www.myadiva.com is already taken; they (or someone else, quite unlikely though) got it registered. The conclusion is irresistible, ARM disseminated material untruth about Beechwood; this may not seem to be much in the Nigerian field, but ARM got their reputation built by solid associations with credible brands. wanaj0: I thought Fara was a (partial, if) success until a few stories emerged. Beechwood has become a full-blown nightmare. And ARM have been carrying on secure in the knowledge that nothing would happen by way of legal retribution.

A small note: "falling in love" with a company is unwise, especially when the company screws up with investors. And ARM has no exceptional track record in real estate; the latest document has more than a tiny bit of a rose-coloured outlook; and if there's mould on the surface of this loaf, its roots are quite surely deep.
.

Thanks Avocado and others who took time to digest the teaser doc and comment on the ARM pp. I was thinking of doing this before but not any longer. The bear aftermath makes the secondary mrkt better investment destination that uncertain pps at this point. Check out the recent opinion of Atedo Peterside in that regard.

[casey]

the market has beat our predictions once again, the bulls are back i hope for long though. i've missed out alot on some rally spree in the past cos of strict analysis. my advice just buy some

[BLUEMONEY]

Originally Posted by casey

the market has beat our predictions once again, the bulls are back i hope for long though. i've missed out alot on some rally spree in the past cos of strict analysis. my advice just buy some

Well I hope so too. Becuase i am tired of COWS that they keep calling The BULL and after one week is gone and leaving the market in a worse condition.

[Michael]

Originally Posted by BLUEMONEY

Well I hope so too. Becuase i am tired of COWS that they keep calling The BULL and after one week is gone and leaving the market in a worse condition.

IT SEEMS WE ARE STILL IN COW TERRITORY

[muranay@yahoo.com]

It is not over yet.

[BLUEMONEY]

Originally Posted by Michael

IT SEEMS WE ARE STILL IN COW TERRITORY

Well it seems so but lets wait and see what happens between now and Friday.

[BLUEMONEY]

Originally Posted by Michael

IT SEEMS WE ARE STILL IN COW TERRITORY

After the close of the market on friday last week, it was convincing enough that the Run we had the week before was a COW RUN.

[casey]

cows on rampage at the NSE yet they advice u to buy more, i don't get! the market has totally gone wild, prices dropping like dead birds. what do we do???

[BLUEMONEY]

Originally Posted by casey

cows on rampage at the NSE yet they advice u to buy more, i don't get! the market has totally gone wild, prices dropping like dead birds. what do we do???

Personally I will advise you to stay on the sidelines for now. Staying at the sidelines most times is as good as winning.
I dont intend going back to the secondary market until there is a sustained Bullish Run for at least three weeks and the possibility of the Run being continious.

[billions]

Originally Posted by casey

cows on rampage at the NSE yet they advice u to buy more, i don't get! the market has totally gone wild, prices dropping like dead birds. what do we do???

If u hv any money that u will need in d very near future, i will advise u to sell and get such money out of d market.


We will still make money in d market but that may be in Q1 of next year.