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Outstanding - this should be over £20 per share but I doubt we will see that until FY results unfortunately.
Due in 10 days & based on the recent cmcx update we may expect trading to be relatively flat-although we have a massive cash pile on which meaningful interest will have been earned,part from interest on substantial client deposits.Additionally we will hopefully be advised that our US operation is expanding as planned.We should remain in good shape & perhaps the dividend will be increased,bearing in mind there are now 10% less shares in issue .
If Plus500 starts to gain traction the US then that could improve profits further leading to increased dividends.
The whole market is getting walloped though Plus is not immune in brutal sell offs, look at IGG and CMCX similar businesses. Anything financial be it banks, insurers, asset managers are really struggling share price wise.
Regarding the next dividend I'm not holding my breath on it being very good in light of all the extra cash they burned buying Odeys chunk of shares in that one off deal.
Feels like there's no resistance to the drops we're seeing at the moment.
If they could agree a good price with the seller then I am sure the company would buy them.
Personally, I am laid back about the depressed share price because I want to buy more shares at a lower price in November with my dividend.
If there is a large seller ,with view to our cash pile & the fact that we recently bought back about 10% of our issued shares from Odey,to avoid an overhang ,why wouldn't we also buy back their holding,also to eliminate the overhang-if there is one ?
Interim results and dividend declaration are due within two weeks or so. It is going to be interesting if the company is
to increase the dividend especially as the share buybacks have not pushed the share price higher. I know there are other factors affecting the share price including a large seller who is still selling.
All will be revealed soon.
I can guarantee that if there's a right way of doing something or a totally tone-deaf way of doing it (in the shareholder's eyes) then Plus will take the tone-deaf route everytime. It's just their way of letting us know they hold us in complete contempt (and why there will never be a re-rating as everyone hopes). Those bought shares will come back to haunt us I reckon, ultimately and all that money they've spent.................could have just been given back to us in divis all along.
But let's see eh? Plus might surprise us.
I have no idea of Israeli Tax Laws, and if share BB qualifies for tax relief? I would doubt it. The 'Treasury' shares have no value on the 'books', but can always be re-introduced to the companies books by various means, devaluing S/H's. I cannot see any reason why BB shares are not cancelled, rather than placed in Treasury, except for re-introduction later.!
There is always an element of 'greed' at BOD level, then there is 'avarice.' The Market is yet to make its mind up.
I put it to you, if there is a board plan to cancel the treasury stock and accelerate dividend payout, wouldn't they first want to accumulate as many shares as possible in treasury via buyback before unleashing such a share price re-rate? For long term holders, not those after a quick buck on a trade, it makes total sense to first drive buybacks, which is also tax efficient method of returning value to shareholders, before later driving dividends and cancelling treasury shares.
Those with patience will reap rewards here.
Plus hasn't been de-rated, it has flatlined in terms of valuation multiple.
To be clear, its PE ratio was 5x at end of 2016; also at end of 2018, also end of 2020, and is today still is 5.0x.
Meanwhile, EBITDA and EPS are both up around 300% during that time.
That is why the stock price has risen 300% in that time period.
The company has 30m share in Treasury - we don't know what will be done with these but we do know that they amount to around 30% of total shares in issue and this could be transferred to shareholders easily by cancelling them. Management can't give these shares to themselves, obviously - the board represent the shareholders and most are INEDs, so they wouldn't sign off on it.
Share based compensation to management has never been a great deal in proportion to the earnings delivery of the company. This isn't an issue.
The reason for the low multiple valuation ascribed, IMO, is the variability in earnings, black-box risk management system, and arguably low visibility in customer retention despite actual retention being very good. That said, the valuation multiple more than offsets these unknowns, and we know that Plus is broadening its business to diversify.
It's a pretty sweet set of opportunities in my view.
You're right testpack; I first invested at £3.45 and then sold at £7 and then came back in at £9ish and have stayed in ever since (but buying and selling percentages of my holding; some at good times others at bad times); I'd love this to rerate (but tbh getting to £20 and staying there would be good. ) I do feel there's someone in the background toying with us however.
I'd prefer divi's to buybacks tbh - but I recognise what bb's are good. I just don't like the fact they aren't cancelled. Watch them shell out a load to the directors (it's happened before). Hate stuff like that.
I have no worries owning Plus, unlike a few of my other shares.lol
A re-rate will happen when the BOD desist from the BB programme and pay a divi which reflects the companies profit.
Savaloy. you were obviously not invested here when Plus was trading at £2+. I'm happy to say I was, and £2 to £19 is a re-rate in anyone's book.
After the meeting on Monday I think the share buy back will revert back to 30,000 per day from the current 10,000 per day. The SP will slowly move north imo.
Everyone keeps banging on about a re-rate.................and we've been waiting for it for about 5 years...........but Plus has a couple of major errors of concern that simply won't be overcome any time soon. Lack of Trust in the Board, extra tax because of it's domicility and the opaqueness, and the way it earns it's money (customer income and the lack of hedging, even though the lack of hedge means greater profits.........sometimes........risk).
So..........if you're hoping for a re-rate to the same as it's peers...........in my opinion.......that aint ever happening unless something changes. Floating on NASDAQ for example would take away the domicility and opaqueness issues once and for all (and the tax).
Don't worry about it testpack3, the rerate is coming. There is nothing better than to be comfortable in what you own and having high conviction in future gains. The market will do its thing in its own sweet time.
I have no idea how the MC can decrease. It was trading at above £19 a few months ago, and since then the no. of shares in issue has reduced by a few %age points through share BB.. The shares being bought are from the open market, and hence, should appear in the daily reported buy/sells. This, in theory, should not affect the sp since the buys have an obvious equivilent sell. The fundamentals of the company, if anything, have got better. Logic says we should be trading at £20+ and a PE of c7/8, rather than the present PE of 4.5.. 80m shares in issue cannot be too many for a company with this T/O?. When/if the BOD drops this BB, and pays out 60% of EBITDA to S/H through divis, the re-rate will be phenomenal. Please bring it on.
Yes Testpack, I knew I had used the word "shareholders" incorrectly but couldn't be bothered to post again...
There is obviously a seller in the background and no one knows when this seller will stop.
Just a small technical point. The no. of 'shareholders' is not falling fast, it is the no. of shares in issue which is falling through the 'share buy back' scheme'.
Theoretically, the MC should remain the same, since the co. fundamentals remain the same, and hence the sp should rise to maintain the same MC.
I am disappointed the 'bought back' shares are not cancelled, rather than put in Treasury, where they can be reintroduced to the register at any time by BOD approval, either 'given', or 'bought'
Shareholders will vote this month to allow the company to buy back up to 10% of shares. Next year could see the number of shares which will be paid divi fall to 74 million, and it could go lower. How many shareholders the following year ?
With increasing profits this company is looking very good imo.
When you see that the company earned $22m interest on the massive cash pile, then compare that to the measly $30m paid in divi recently then surely shareholders are expecting a big divi in November.
Thank you Beauchamp, what share count did you use? My calculation is coming out at 165c on a 82.3m share count. Although, I think technically the average share count over the period is the correct number to use.
Using last year’s tax rate of 22 per cent looks like 147 cents approximately. Full year consensus is 243 cents. Using that rather low looking figure the pe is below 8. If the cash only earns 4 per cent net of tax a pe of 8 values the cash at 32 per cent of its actual value!
Has anyone calculated an estimate half year EPS based on the information provided in this morning’s trading update?