The market is giving an initial thumbs down to Colony Northstar’s 4Q17 results. A few observations:
- Book value per share of $12.52 ($6.8Bn common equity, 543mm shares)
- Tangible book value per share of $8.43 ($6.8Bn common equity, $1.5Bn goodwill, $0.9Bn intangibles, -0.2Bn minority interest intangibles, 543mm shares)
- $300mm repurchase plan was completed in 4Q so no authorization was available ytd 2018. Average price paid was $12.82 for the year.
- New $300mm repurchase plan. Disappointing that it was not increased vs 2017, but the good news is that it can buy more than twice as many shares …
- Dividend reduced to $0.44/year which is estimated to equal 2018 “net cash flow, excluding gains”. This implies $239mm of “net cash flow, excluding gains”. The company reported basic 2017 FFO of -$26mm, gains of $135mm, and “Core FFO” of $665mm. It’s not clear to me how the 2018 guidance implied in the dividend corresponds to reported 2017 results.
- Closing of $1.4Bn digital infrastructure fund after year-end
- $280mm of third party capital raised in 4Q17 bringing the full-year total to $2Bn. Successful transformational to the co-investment business model will require more outside money.
- I don’t see any big surprises in the results of the “verticals”: Healthcare, Hospitality, Industrial.
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