TR Property and Telecom Plus AGMs

Today (26/07/2022) there were two Annual General Meetings for companies in which I hold shares – TR Property Investment Trust (TRY) and Telecom Plus (TEP), both of which are long-standing holdings. I didn’t manage to attend either physically because I had an appointment at Guy’s Hospital in the morning.

However I did manage to log in to watch most of the TRY meeting including the manager’s presentation by Marcus Phayre-Mudge which was very interesting. I’ll only cover a few points as you should be able to watch a recording via the company’s web site.

This was a hybrid meeting in the sense you could attend both physically or on-line but voting was done on a poll and questions had to be submitted in advance unless you attended physically. This is not an unreasonable compromise in my view. Combining a show of hands vote with an on-line vote is obviously very complex so for bigger companies it is not an unreasonable solution in my view.

Marcus reported that TRY NAV Total Return was up 21.4% last year (to March 2022) but it’s way down since then. There was a question to the board re the dividend not being covered by earnings – they have used some of the revenue reserves in the last two years to maintain and increase the dividend but expect coverage will improve in future. Do I have any concerns about this? No is the answer.

The cost of debt is rising and some holdings have been taken out by public to private deals – some at a premium. People are returning to work in offices in most major European cities due to relatively short commuting times, unlike in London. There is macro uncertainty at present which is affecting the property market.

There was an interesting discussion on the housing market in Germany where TRY is overweight and where there is some clamour for rental controls particularly in Berlin. With Germany facing economic problems from the disruption to gas supplies because of the war in Ukraine, it is worth listening to Marcus’s session for that alone.

The current discount to NAV is less than 2% so I think there may be better bets if you wish to invest in property trusts. For example Schroder REIT (SREI) is on 32%. But TRY has certainly been well managed over the last few years.

The other AGM I missed was Telecom Plus which was also run as a hybrid meeting. There was a resolution put to the meeting to revise the articles of the company so as to permit the company to hold wholly virtual meetings. The notice said “These changes are being introduced to provide the board with greater flexibility to align with technological advances and evolving best practice, particularly in light of the Covid pandemic….”. I voted to support the change but 45% of shareholders voted against it. Clearly there is strong opposition to holding a virtual only meeting and quite rightly. I hope that companies will not drop physical meetings altogether as they provide for much better engagement with shareholders. Telecom Plus need to take note of the vote.

Virtual meetings do save a lot of time, so long as the technology works well. Interesting to discover today that Guy’s Hospital IT systems had been down for the last week after their servers were fried in the heatwave last week. As a former IT manager I find it both astonishing and concerning that they had not a better back-up and recovery system for such a critical organisation. It’s just another example of how the NHS is not as competent as it should be, which is getting lots of media coverage of late.

Roger Lawson (Twitter:  )

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