Our opinion on the current state of LIGHTHCAP(LTE)Lighthouse Capital (LTE) (previously Greenbay) was one of the Resilient group of REITs (real estate investment trusts) along with Resilient itself, Rockcastle, and Fortress. These companies were the subject of a damning report by 36One Asset Management, which stated that their share prices were too high due to their cross-shareholdings. Consequently, Lighthouse's share price (after a 20-for-1 consolidation in November 2018) fell from 5420c in December 2017 to as low as 688c in February 2019.
The CEO, Stephen Delport, indicated that going forward, the company will focus about 80% of its capital on owning market-beating investments in Europe. Clearly, by changing its name, Lighthouse is attempting to distance itself from the Resilient group of companies and establish itself as an independent property company. The Financial Sector Conduct Authority (FSCA) found that Lighthouse had not been involved in any price manipulation in the Resilient group. Later in September 2019, the FSCA found that there had been no wrongdoing by any of the members of the group at all.
Lighthouse held 882m shares in Hammerson worth about 405m euros on 3rd May 2021. On 14th May 2021, Resilient announced that its shareholding of Lighthouse had passed 35%, prompting a mandatory offer for the balance of Lighthouse's issued shares at 713c per share. On 12th August 2021, the company announced that it had raised R2,6bn in an oversubscribed bookbuild. The funds were to be used to purchase four shopping malls in France.
In its results for the year to 31st December 2023, the company reported a distribution of 2.7 euro cents compared with 3.25c in the previous period. The company's net asset value (NAV) was 42 euro cents compared with 40.5c in the previous period. The loan-to-value (LTV) was 14%. The company stated, "Lighthouse forecasts a distribution of 2.40 to 2.50 EUR cents per share for FY2024. The macroeconomic landscape continues to improve with inflation abating and short-term interest rates anticipated to decline during 2024."
In a pre-close update for the six months to 30th June 2024, the company said, "During 1H2024, Lighthouse concluded the acquisition of two malls, Salera (50% share) and H2O. Lighthouse's 50% share of Salera was acquired for EUR 87.25 million (inclusive of transaction costs), which represented a net initial yield of 7.7%. These acquisitions were funded by the disposal of Hammerson shares and have resulted in Lighthouse's loan-to-value ratio increasing from 14.0% at FY2023 to 20.3% at 25 April 2024."
Technically, the share has been in an extended sideways market and had begun to rise until the advent of the Ukraine crisis. Since October 2023, the share has been in an upward trend. We see this rand-hedge company as relatively cheap at current levels.
