FRP Holdings Inc. has already watched its stock jump since Election Day and the commercial real estate developer is hoping for more of a Trump bump in the coming year.
Jacksonville-based FRP develops and operates office and industrial properties mainly in the Baltimore-Washington, D.C., market and no, there’s nothing obvious in the president-elect’s agenda that would benefit that business. Most analysts say the outlook for commercial real estate is uncertain as the new administration moves in.
However, FRP, which was originally part of Florida Rock Industries Inc., continues to own properties that are mined for construction materials under lease agreements and the outlook for that is promising.
“We remain hopeful that the new administration in Washington will follow through on their promise to rebuild our nation’s crumbling infrastructure,” CEO Tom Baker said during FRP’s quarterly conference call last week.
FRP’s mining royalties segment is much smaller than its commercial real estate operation.
While the mining business produced $7.5 million in revenue in the fiscal year ended Sept. 30, FRP’s asset management business produced $28.7 million in revenue.
But the mining segment continues to be “the real performer” for the company, President David deVilliers said in the conference call.
“We believe that volume increases from our locations will be the norm for the foreseeable future as construction activity in Florida and Georgia continues to improve,” deVilliers said.
Operating profits in the mining royalties business jumped 63.6 percent to $6.8 million in fiscal 2016, while the operating profit of FRP’s developed buildings fell 2.1 percent to $11.8 million.
Baker said its commercial properties, which were 89.9 percent leased as of Sept. 30, face a more challenging year.
“We do have a very big task ahead of us in fiscal 2017 as we have an inordinate number of expiring leases and will need to find some new tenants,” he said.
“While we may take a step back in our asset management segment as we re-lease the expiring spaces, I am confident there will be only a short step back and our team will have us back to 90 percent plus occupied very quickly,” Baker said.
FRP’s stock has risen from about $32 on Election Day to about $38 recently, after topping $40 last month.
“Over the long-term, we remain excited about our future and our ability to grow shareholder value,” Baker said.
CSX Corp. gives optimistic forecast
CSX Corp.’s stock also benefited from Trump’s election and it got a further boost last week when the Jacksonville-based railroad company issued a more optimistic earnings forecast.
After previously predicting fourth-quarter earnings would be flat or slightly lower than last year, Chief Financial Officer Frank Lonegro told an investor conference “we now expect fourth-quarter earnings per share on a reported basis to be flat to slightly up, as macroeconomic headwinds impacting the company’s volume are moderating,” according to a CSX news release.
The company said the volume of freight transported by CSX was down 3 percent quarter to date, “and many markets are showing more moderate declines than in previous quarters. Coal in particular is showing sequential volume stabilization and is essentially flat in the fourth quarter to date.”
Meanwhile, CSX’s finances continue to benefit from cost-cutting initiatives, Lonegro said.
CSX’s stock rose $1.01 to $35.81 Wednesday after Lonegro’s forecast and reached a 52-week high of $36.86 on Thursday.
Largest EverBank stockholder sells early
It could be months before TIAA completes its buyout of EverBank Financial Corp. and the Jacksonville-based bank’s largest stockholder apparently couldn’t wait.
Sageview Partners L.P. filed a registration statement last week with the Securities and Exchange Commission to sell 7 million shares of EverBank stock, representing 5.5 percent of the company’s outstanding shares.
Underwriter UBS Investment Bank agreed to buy the shares from Sageview for $19.11 each, which was lower than EverBank’s closing price of $19.35 on Monday when the sale was announced.
TIAA agreed in August to buy EverBank for $19.50 a share. That deal is expected to close in the first half of 2017.
The registration statement did not say why Sageview wanted to sell its shares early. Its rush to sell didn’t trigger any alarms on Wall Street, as EverBank’s stock fell just 7 cents Tuesday to $19.28 after the announcement.
Sageview became EverBank’s largest stockholder when it made a $100 million capital investment in the then privately held company in 2008. It remained the largest shareholder after EverBank’s initial public offering in 2012.
Sageview still owned 10.3 million EverBank shares, or 8.22 percent of the company, as of Sept. 28, according to a proxy statement for a special meeting of EverBank shareholders to vote on the TIAA buyout. Stockholders voted nearly unanimously to approve the deal at that Nov. 9 meeting.
Last week’s SEC filing did not say when Sageview sold its other shares, but said it will no longer own any EverBank stock after the sale of 7 million shares.
Sageview took in about $134 million in proceeds from the stock sale.
Shoe Carnival earnings disappoint
Shoe Carnival Inc.’s stock dropped sharply Tuesday after a disappointing earnings report.
The footwear chain controlled by former Jacksonville Jaguars owner Wayne Weaver reported earnings of 54 cents a share for the third quarter ended Oct. 29, 7 cents higher than the previous year but 2 cents lower than the average forecast of analysts, according to Yahoo Finance.
Total sales rose 1.8 percent to $274.5 million but comparable-store sales (sales at stores open for more than one year) fell 0.4 percent.
“Our third-quarter operating results were below our expectations due to slower sales of seasonal merchandise in the second half of the quarter,” Shoe Carnival CEO Cliff Sifford said in a news release.
Sifford said an increase in comparable-store sales for athletic merchandise was offset by a “high-single digit” percentage drop in boots.
He said the decline in boot sales continued in November, along with a decrease in other seasonal merchandise, resulting in a comparable-store sales drop of 3.3 percent for the month.
After the disappointing third quarter, Shoe Carnival lowered its earnings forecast for the full fiscal year to a range of $1.46 to $1.51 a share, compared with its previous forecast of $1.58 to $1.65. Shoe Carnival earned $1.45 a share in fiscal 2015.
Shoe Carnival’s stock dropped $4.12 to $26.15 Tuesday after the earnings report.
Weaver is chairman of Shoe Carnival and its largest stockholder. He and his wife, Delores, control 25.2 percent of the stock.
Latitude 360 ordered to pay $5.9M judgment
Ten months after it evicted Latitude 360 Inc. from its Southside venue, the owner of the property near The Avenues mall was awarded a $5.938 million judgment against the company and CEO Brent Brown.
Latitude 360 is a Jacksonville-based company that operated dining and entertainment venues in three cities, with big plans to expand. However, the company abruptly closed its venues in Jacksonville and Indianapolis in January after an affiliate of EPR Properties, which owns the buildings, filed eviction lawsuits.
Latitude 360’s third venue in Pittsburgh shut down in March.
Duval County Circuit Judge Karen Cole last month ordered Latitude 360 and Brown to pay $5.938 million to 30 West Pershing LLC, the affiliate of EPR Properties, to settle the eviction lawsuit. However, with the company basically out of business, it may be difficult to collect that money.
Texas-based Main Event Entertainment filed plans in September to renovate and take over the Jacksonville venue at 10370 Philips Highway.
Salt Life apparel line growing
Three years after acquiring the Salt Life apparel brand, which was founded in Jacksonville Beach, Delta Apparel Inc. is happy with the results.
As Delta reported its fiscal year-end results last week, it said sales of the Salt Life brand rose 27 percent last year and sales at its flagship store in Jacksonville Beach rose nearly 20 percent.
The company has expanded with the recent opening of a second Salt Life store in San Clemente, Calif., and is planning another California store in Huntington Beach next year.
Delta does not own the Salt Life restaurants in Jacksonville Beach and St. Augustine.