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F
'' purchase the shares into Treasury''
That is also a cost to the business .
Purchasing for example £10,000 worth of shares in the market (shareholders money) to give to an employee as a bonus.
"A £1.2 Billion buyback conducted at an average 60p including costs will reduce the share count by 2 Billion shares .
Simple"
LTI, are you seriously saying that Block share issuance has no effect on the number of shares in issue? And that by issuing shares, before the buyback, it doesn't effectively neutralise a significant amount of said buyback?
You likely know what I mean, I wont spend any more time explaining it. Goodnight.
"I am afraid you are following on from a couple of dozen people before you trying to make 'the point'.
The fact is a share buyback programme has NOTHING to do with share schemes.
A buyback will reduce the share count by how ever many can be purchased with the money available."
It's pointless discussing it with you LTI. What you say is true in fact, but the buyback is meaningless overall if it only replaces shares issued for Employee schemes.
A £1.2 Billion buyback conducted at an average 60p including costs will reduce the share count by 2 Billion shares .
Simple
"IF doesn't come into it. Most large financial institutions or indeed most large quoted corporations would have share based schemes as part of the overall remuneration to attract the calibre of staff required.
They have NOTHING to do with the reduction in share count as a result of a buyback programme."
Most large corporations purchase the shares into Treasury, for sharesave's and Bonus plans, not issue new shares and therefore diluting the shares in issue.
F
''the point I'm trying to make''
I am afraid you are following on from a couple of dozen people before you trying to make 'the point'.
The fact is a share buyback programme has NOTHING to do with share schemes.
A buyback will reduce the share count by how ever many can be purchased with the money available.
"All I did was respond to the information that you posted with the 3 RNS. What you should have done was put down the number of shares in issue on each of the dates and the resultant amount of shares issued being the difference between the 2 as you did in your last post."
I did post the figures at 17:12, before the RNS post.
"As far as the buyback, a £1 Billion share buyback isn't going to make much difference with 71,022,593,135 ordinary shares currently in issue; On the 31 January 2020 70,285,353,360 ordinary shares were in issue,"
F
''if Lloyds issue''
IF doesn't come into it. Most large financial institutions or indeed most large quoted corporations would have share based schemes as part of the overall remuneration to attract the calibre of staff required.
They have NOTHING to do with the reduction in share count as a result of a buyback programme.
"A buyback will result in X less shares in issue than without a buyback. X being the number of shares able to be purchased with the buyback money allocation.
Simple."
OMG, you just keep giving a text book answer. Obviously what you say is right, but you're either missing, or disregarding, the point I'm trying to make. I think you're just trying to wind me up lol.
"Anyone in such a plan with any common sense would have ditched it a long time ago with a chance of purchasing in the market at much lower than the strike price,down to below 24p. Also with any 3 year maturing now - strike price 46p? - plenty of opportunity to purchase a lot lower in the market."
I've paid into sharesave schemes and SIP's oer many years. Anyone in a sharesave, at say 60p, would have ditched them and entered into new schemes at much lower prices, if they had any sense. The reason they'd have to ditch the old schemes would be due to Government/Company limits on the maximum monthly payment into the scheme. As well as the sharesave schemes, there's also he Bonus plans for senior management, of which I know nothing about as I've never worked at such a privileged level.
F
''You should have pasted the complete paragraph:''
OK
"Shareholders will benefit, sort of, as they will prevent dilution, but overall it wont do much to reduce the number of shares in issue."
A buyback will result in X less shares in issue than without a buyback. X being the number of shares able to be purchased with the buyback money allocation.
Simple.
"''but overall it wont do much to reduce the number of shares in issue.''
A buyback will result in X less shares in issue than without a buyback. X being the number of shares able to be purchased with the buyback money allocation.
Simple."
You should have pasted the complete paragraph:
"Shareholders will benefit, sort of, as they will prevent dilution, but overall it wont do much to reduce the number of shares in issue."
The point I was trying to convey is, if Lloyds issue 3/4 Billion shares every couple of years, for sharesave's and Bonus plans, then a £1 Billion share buyback is going to do very little to reduce the overall number of shares in issue, so all the management are really doing is reducing dilution due to Block Listings of shares.
I'm not sure it could be described as Robbing Peter to pay Paul, but it isn't far off if I'm understanding what's going on. If the £1 Billion, used for the share buybacks, is just replacing new shares issued for discounted employee schemes, then that £1 Billion isn't available for dividends, and will do very little to reduce the number of shares in issue. I'm happy to be corrected, but that's my understanding of what's happening.
fleccy,
"Hardup, what you should actually do is check the shares in issue between two dates"
All I did was respond to the information that you posted with the 3 RNS. What you should have done was put down the number of shares in issue on each of the dates and the resultant amount of shares issued being the difference between the 2 as you did in your last post. Anyway, with these figures the buyback would still purchase close to twice the amount of new shares issued so the net result is still a reduction of shares in issue of 793.5 million shares. They should easily have enough money every year to fund the progressive dividend and also have a policy to buy back 2 times the amount of shares that are issued every year so the net result is that the number of shares in issue decreases every year. Long term share holders would benefit from this.
F
''but overall it wont do much to reduce the number of shares in issue.''
A buyback will result in X less shares in issue than without a buyback. X being the number of shares able to be purchased with the buyback money allocation.
Simple.
"The total shares issued over the last 2 years will be 516,000,000 according to the information fleccy posted with the 3 RNS. So if Lloyds do go ahead with a £1 billion buyback, so lets assume even if the price paid for the shares averages 70p, £1 billion would purchase 1,428,571,428 shares which would be cancelled. That would almost 3 times the amount of new shares issued, so the net result would be lowering the total shares in issue by 1 billion shares."
Hardup, what you should actually do is check the shares in issue between two dates. The correct amount of new shares issued is 71,022,593,135 - 70,285,353,360 = 737,239,775, or just under 737.240 million shares. Lloyds will have some dealing costs, but not as much as retail investors, but they'll have to pay 0.5% stamp duty like everyone else. £1 Billion - 0.5% = 995 million. lets say 65p average purchase price, means they could purchase around 1.531 Billion shares. 1.531 - 0.737240 = 793.529 Million shares, which isn't much more than the shares they issued for sharesave schemes and bonus plans in 2020/21. If they just keep issuing more shares, for generous bonus plans and sharesave schemes, any excess will just be taken up. Shareholders will benefit, sort of, as they will prevent dilution, but overall it wont do much to reduce the number of shares in issue.
psk
The winners are any employees locking in a discount when the Lloyds share price was near the lows , if the timing worked out..
PSK
If that were the case involving a 5 year plan, I would have thought there is the possibility of a low take up. Don't know the sort of discount these days but a 20% discount would take it to about the current share price.
Anyone in such a plan with any common sense would have ditched it a long time ago with a chance of purchasing in the market at much lower than the strike price,down to below 24p.
Also with any 3 year maturing now - strike price 46p? - plenty of opportunity to purchase a lot lower in the market.
Hardup
I am sure another SAYE is coming to an end so more shares will be issued
SS
longtimeinvestor
Posts: 15,687
Price: 500.20
No Opinion
Just sold Wed 16:20
a few of my shares at just over 500p that I bought at about 285p -
As I have previously said SS - buy low, sell higher.
SS
longtimeinvestor
Posted in: HSBA
Posts: 14,023
Price: 286.70
No Opinion
Just topped up21 Sep 2020 10:58
at 285p
SS
''certainly not a long term one.''
You appear to be getting more jealous by the post - not a very nice trait .
As I have already said which you choose to ignore, I have been investing since the age of 18, which means I have been a very long term investor.
I have been invested here for about 25 years uninterrupted.
I have been invested in HSBC for about 30 years uninterrupted.
I could give you a long list of other companies if you wish.
Green up tomorrow
SS
''certainly not a long term one.
T
''Spread over the year little more than tokenism''
There is a limited amount of purchases that can be made via buybacks over a 12 month period.
12 month periods follow one another.
F
''they appear to have used Covid as an excuse to change the strategic direction of the bank, at the expense of shareholder dividends.''
Prejudging - we do not yet know to what extent the returns to shareholders will look like until next month. There is the possibility that they could use a 'special' for a year or two until being phased out to transition into a 3p + normal dividend payments, and of course buybacks to take us below the 70 Billion share count threshold. The BOD have been given authority to purchase up to 7,088,402,568 shares.