Accordia Golf Trust and lower DPU.

Reader:
Hey AK, what do you make of Accordia Golf Trust latest results? Looks pretty dismal, all important numbers are down. Any positives to it at all?

AK:
eh... you say leh?

Reader:
From the numbers I don't see anything good. But management says that tourism may have a positive impact in mid to long term
And they said there was bad weather, maybe the weather might improve. That's about all the good I could see from the report

AK:
I would ask if the dip in results is due to something more enduring.
If so, the decline would become a trend.

Reader:
True. But difficult to say how much is due to earthquake and bad weather. And how much due to fundamentals. 

AK:
You will have to make a judgement call 😉

Reader:
I have small position only so I think I'll hold for now , at least the dividend is good

AK:
If we are investing for income and if we got in at a lower price, this fits. 🙂


...unfavorable conditions during the year resulting in lesser operating days as
compared to previous year:
• 1H FY16/17: Earthquake in Kyushu (April 2016); Typhoon (August and September 2016);
Heavier rains (June 2016)
• 2H FY16/17: More snowfalls (February 2017)

See presentation:
http://accordiagolftrust.listedcompany.com/newsroom/20170525_183557_ADQU_RRL9A22VE4KR13RC.2.pdf

When we invest in Accordia Golf Trust, we have to be prepared for some possible fluctuation in revenue and I said this in 2015 too: 
http://singaporeanstocksinvestor.blogspot.sg/2015/11/accordia-golf-trust-dpu-of-232c-and.html

Sino Grandness and rights issue.

Reader:
Just checking can you comment on SINO GRANDNESS rights issue?
Is it worth subscribing to the rights?
Thanks

AK:
Always ask what is the reason for issuing rights. It seems like they have trouble repaying debt and, hence, the rights issue. If so, the rights issue does not add value for investors.
Subscribe if you believe that the company is able to do much better in future.

Reader:
ok thanks for the advise.

AK:
If you are putting in more money but the performance declines, it is a bad deal.

Reader:
yeah



Remember, not all rights issues are created equal. Some will enrich investors and some will impoverish them. 

In general, I do not like rights issues which happen because the balance sheet needs strengthening. They weaken our own balance sheet and do nothing to improve our cash flow.

Related post:
A lesson on rights issue from 2011.