Apologies for my long hiatus, it has been hard to find interesting, reasonably valued stocks. Blackwall Property Funds (BWF) manage and service ~$600m of properties for various property vehicles. What’s exciting is they are in the early rollout phase of their shared office product ‘WOTSO Workspaces’. The strategy is to utilise BWF's balance sheet to buy, fit out and lease the property, then look to sell the property. Part of the strategy is the retention of management rights by BWF. Recurring revenue from management rights has increased materially with this strategy. Scale benefits are now also starting. Management believes the WOTSO product has significant scope for growth. Strip out cash & investments and you get a property management company with good recurring revenue growth on a very attractive P/E. BWF has a market cap of $21m at a share price of $0.40, zero debt, $3m cash and investments of $11.9m. I estimate a fully franked yield of 9.25% in FY16. Coupled with a buyback and an attractive yield, it’s interesting.

Patrick Poke

Good to have you back on the platform Mark, thanks for sharing.

Graeme Holbeach

I have a tiny legacy holding in this company resulting from my participation in the original Pelorus float in 2006. Although we were told the company came through the GFC relatively unscathed, there have been numerous subsequent break ups, consolidations, privatisations, name changes, acquisitions, a large court case loss etc. While WATSO is a great concept, I’m not convinced that the benefits will not be lost in some future re-arrangement.

Mark Tobin

Hi Graeme many thanks for the historical perspective. However I can only speak to the current position BWF finds itself in and its current performance. Hopefully the WOTSO concept will continue to deliver results to shareholders new and old. I will however carefully monitor any proposed restructures or capital management initiatives given the insight you have provided.