Investment Vehicle Analysis: Capital and Counties Properties Report

This report provides an analysis of Capital and Counties Properties, a UK-based property development company. It begins by differentiating between property companies and Real Estate Investment Trusts (REITs), highlighting their key distinctions in terms of investment strategies, taxation, and operational focus. The report then examines Capital and Counties Properties, discussing its selection, financial performance, and current affairs. The financial analysis includes an assessment of the company's cash flow ratio, price-to-earnings ratio, total assets, and EBITDA, providing insights into its financial health. The report also considers the impact of the UK and European property markets on the company's performance, noting the increasing property prices and their potential influence on consumer behavior and investment decisions. The conclusion summarizes the key findings, emphasizing the importance of financial analysis in making informed investment choices within the property sector.

Coursework

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY ................................................................................................................................1
1. Demonstration of an understanding of the differences between investment vehicles ............1
2. Selection of company and reasons for that selection i.e. financial performance, current
affairs and news...........................................................................................................................2
3. Performance of the property market in the UK and Europe has affected your decision.........3
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................4

INTRODUCTION
Property company is that which involves in development of business process and makes
finance by selling, purchasing & renting out land and houses. To better understand this concept
Capital and Counties Properties has been chosen which is a property development corporation. In
this report, there are following topics are covered such as: demonstration of an understanding of
the differences between these investment vehicles like property company and REIT, news and
financial performance. Apart from this, it also discuss about current performance of property
market in United Kingdom.
MAIN BODY
1. Demonstration of an understanding of the differences between investment vehicles
Property denotes the term wealth and property companies are those who engaged in the
business of selling, developing, purchasing and renting and Capital and Counties Properties is a
property company. Where as real estate investment trust are those who permit to invest in
portfolio of real estate assets the same way they make investment in other corporations and
£10,000 are invested in REIT (Liang and Song, 2014).
The distinction between property company and REIT are as describe below:
Property Company REIT
A property company is that which creates
funds by buying, selling & renting out land &
houses.
These are those companies who owns or
finance income producing real state in a range
of property sectors.
As basic tax rate from rental payments has
been deducted by tenants.
As the taxation at fund level are exempted on
income level.
As property companies does not invest its
money to the projects of other corporation and
its business. They develops the property for
their own benefit.
Real estate investment trust are the companies
who invest in the development of projects such
as: hospitals, hotels, offices, shopping malls
etc.
Generally these companies are not listed on
stock exchange.
Normally real estate investment trust are listed
on stock exchange.
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Property companies does not have excess
funds.
As REIT have huge funds that's why they
invest in the projects of other organisations.
2. Selection of company and reasons for that selection i.e. financial performance, current affairs
and news
As Capital and Counties Properties is being selected which is a property development
company and it belongs to United Kingdom. The main target area is West & West End of
London. In the year 2010 it is established in UK. The operations of business are based on Covent
Garden, Earls Court and retail & dining destination in London. According to the news Capital
and Counties Properties is accordant up-trend over the course of past 5 trading sessions.
As the cash flow ratio is (143.81) & current price to earning ratio is (36.26). The current affairs
of corporation shows, cash flow ratio is consider the recent price of inventory which is associated
to the amount of cash earned by the organisation. In the stock valuation it is very helpful. For the
investors it is very important to know the performance so that on the basis of it they can take
investment decisions which is beneficial for the growth and success of business (Brett, 2013).
As the financial performance shows that how financially strong a company. It reflects
that how well a business use assets for the main purpose to earn higher profits. The financial
statements shows the financial performance which involves balance sheet, income statement,
cash flow etc. It is helpful for the management to take effective decisions on the basis of
financial information and data so that business can grow and get success. As the balance sheet
reflects the condition of enterprise at a particular period of time. Where as income statement is
helpful to provide summary about revenues & expenditures during a particular time duration and
the end net income and net loss can be identify. The cash flow is useful to know the flow of cash
and the changes in it. There are mainly three activities such as: operating, financing and
investing and it is important for the Capital and Counties Properties to manage the cash form
these activities so that business of corporation does not face the problem which is associated to
shortage of cash (Zahid and Ghazali, 2015).
In the financial year 2018 the total assets of company is 3664 which is less as compare to
the previous year but the liabilities has been reduced and it is 681. From the income statement of
2018 it has been analysed that EBITDA is (115) and it shows that business is not earning profits.
As per the recent news the share prices of organisation is 237.40 GBX and it continuously
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reducing from last 1 month and it is not good for the corporation because investors will not
invest in the company.
3. Performance of the property market in the UK and Europe has affected your decision
The property market of UK and Europe is affected because the prices of houses are
continuously increasing and in the year 2018 the prices are increased by 2.2% in December. It is
expected that the prices of houses have been increased by around 15 % at the end of 2023. As
Capital and Counties Properties is doing the business of property development in UK and it is
not doing well because the earnings of company has been reduced in the year 2018 as a result
people will not invest in the business of corporation and its sells can be reduce. As the decision
can be affected because consumers will not deal with with the organisation and also the prices of
property are continuously increasing which can influence the buying of consumers (Boddy,
2018).
CONCLUSION
As from the above report, it has been concluded that property company develops the
houses and buildings for the people so that they can live happily. As REIT permits to invest in
portfolio of real estate assets the same way they make investment in other organisations. It is
essential to analyse the financial performance of company to take effective decisions.
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REFERENCES
Books and Journals
Boddy, M., 2018. 11 The property sector in late capitalism: the case of Britain. Urbanization and
urban planning in capitalist society.7.
Brett, M., 2013. Property and money. Estates Gazette.
Liang, J., Fang Li, L. and Song, H. S., 2014. An explanation of capital structure of China's listed
property firms. Property Management.32(1). pp.4-15.
Zahid, M. and Ghazali, Z., 2015. Corporate sustainability practices among Malaysian REITs and
property listed companies. World Journal of Science, Technology and Sustainable
Development.12(2). pp.100-118.
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