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uncle doug fair point agree
I have never believed those bought and sold numbers as the trades I've done often go in the wrong column.
SP will continue up as more lockdowns, isolations, pubs and restaurants shutting will cause more use of supermarkets and online delivery. I'm pretty sure latest Covid measures are too soft, too complicated and nobody follows them anyway so a full national lockdown will be needed once flu starts up. Also as other companies suffer from job losses and consumer hardship in an economic turndown safe haven is always in staples like food. All good for the likes of Tesco. No brainer.
Today is the opposite 7million bought 29 million sold. However share price moving up slowly. Exdividend very soon.
lse showing 60 million bought today thats huge if accurate any opinions?
Tesco chairman John Allan said he would “defend to the death” the supermarket giant’s decision to pay a dividend after receiving a large tax break,............ I like him already..
dividend for me...and I'll buy more TSCO shares with the proceeds.
As Rosewall states, concentrate on core business. The LIdl/Aldi etc expansion needs to be squished & the roll out of Jacks will help to fill the gap between Metro size stores and Superstores.
Gavster
I thought TSCO have just come through five years of divestment of vanity projects. Surely history proves that the company is no good at buying other businesses. Expand core businesses such as Bookers but keep away from garden centres. Always thought that a company such as P&H would fit in well as would Spar or Miss.
No it couldn't Rhodi, read the interim report.
Out of interest. Who would rather see Tesco buy a stake in or takeover some other businesses, grabbing the opportunity while markets are down, thereby boosting income and yield rather than take the special dividend ?
could that include the special dividend from asian business sale. Having heard that could be an extra 50p dividend, quite surprised this is not nearer 240p. Anyway very happy with tescos performance. Ahead of what I expected. They have set aside money for bad debt on tesco bank. Hopefully it will not be as bad as funds set aside. Footsie due potential correction upwards back to 6200 imo so this should move hopefully north in tandem.
Faster
"
"Meaning that they will consolidate the shares in order to keep the share price unaffected".
They will consolidate the shares but not necessarily to keep the share price unaffected. There have been many rumblings in the past where institutions want the share price to be much higher. Remember, the share price was £5 not too long ago. So we don't know how the consolidation will work out.
You also, I think, mentioned the profitability of the Asian businesses. One of them is profitable, the other is loss making.
Agreed, for the 3.2p, special dividend not been set yet, and I'm not believing we are going lower, tesco is a major company actually making a profit and paying dividends.
As the ex divi date is declared on the 15 Oct, can’t we just sell a few days after as we will retain our entitlement to the dividend with non of the risk????
As shareholders, who is going to vote for a special dividend if its going to make us worse off? We have a vote to approve the special dividend if the sale of the Asian business is approved by local authorities. Turkeys don't vote for Christmas and I'm sure Ken won't want to severely lower the sp at the start of his tenure? As well as the share fund managers and the pension providers, all in mvho of course?
NAV is a key yardstick to value a fund whereas Tesco are business and mainly valued based on multiples of EPS. As Tesco estimated, we will lose 25% or so of our shares due to consolidation based on share price of 213p. However, they also reported that EPS could be 16% less than last year excluding the discontinued business (Adjusted diluted EPS of 7.56p vs LY: 9.01p). Therefore, it is not unreasonable to anticipate that share price would be adjusted in line with the industry PE multiple, i.e. SP goes up circa 9% post consolidation. Market traditionally valued Tesco at a multiple of 12-16 PE and the average PE of supermarkets excluding Ocado is currently about 10.5. Anyhow, market is unpredictable and sp could any direction.
Bear in mind, in the current zero percent interest environment, pension funds and fixed income funds need a reliable dividend paying company. FTSE is cheap and has not recovered from pandemic like other markets. So either they buy Tesco shares or might consider owning the whole cow. The biggest liability is pension and will be gone after the Asia sale, which makes Tesco an appealing cash cow.
All IMHO, do your own research.
IMO. Dividends and return are a bigger driver of share price than NAV. Tescos is not a mining company. The dividend and return will reduce by far less meaning the SP will hold recover more than a 50p dividend payment drop. The sale of the Asian business was driven by its profitability, not the property value of its warehouses and shops.
Unless I have missed anything recently (I haven't had a chance to read the full set of financials in detail), let's be clear about this. The special dividend, if it happens, and the share consolidation are two entirely different things.
Assuming things go ahead as planned, there will be a dividend of around 50p per share. The same amount again will be used to pay the pension fund deficit and a few pennies for working capital. In simple terms (I am omitting the profit made on the sale (sale price less asset cost / value)) the net asset value will reduce far more than the equivalent of 50p a share. The balance sheet will take a big hit and how this will affect the share price, well, that is for the market to decide - just be aware that the NAV will likely be reduced by far more than the special dividend, it was all in the original prospectus.
The next thing is the consolidation of shares. We don't know what the share price will be after divestment of the Asian businesses, nor do we know what the ideal share price (from a Tesco / institution point of view) is, we don't even know if the consolidation will pass the general meeting. Because of the unknowns, we don't know how many shares people will lose with the consolidation.
It will be wise to invest via your ISA
PLEASE TAKE NOTE of the personal tax implications with dividends. Capital gains is £12300, but tax on dividends starts to be paid after £2200. We have established that after all is done you will end up with less shares but will have been paid the difference by way of the special dividend. If you are then having to pay tax on that dividend you will be worse off.
I believe Vodafone did this several years ago with a special dividend when they sold x.
Yes. Total mistake, on my part.. Too late at night.
It explains it here.
https://www.fergusonplc.com/content/dam/ferguson/corporate/investors_and_media/Shareholder-centre/AGM/2018/Ferguson%20plc%20Share%20Consolidation%20illustration%202018.pdf
The share price remains at 2.00 but with less shares we lose out and our holding becomes worth £5000 less.
deeerrr
Because Tesco's have stated this :
" In addition, the Board intends to return c.£5.0bn to shareholders via a special dividend with associated share consolidation."
Meaning that they will consolidate the shares in order to keep the share price unaffected.
See that in their announcement here, page 55.
https://www.tescoplc.com/media/756494/tesco-plc-interims-results-2021.pdf
Why does investment remain at 20K?
What is not to like with the special dividend / share consolidation? Surely it's a return of 30% on offer.
Are my figures correct ? What is the cautiousness shown by the market on this ?
Is it that the market cap is currently inflated by £5B, but that doesn't tally with the current yield ?
Example: https://www.fergusonplc.com/content/dam/ferguson/corporate/investors_and_media/Shareholder-centre/AGM/2018/Ferguson%20plc%20Share%
Simplification of TESCOS Current Situation :
Today : Market Cap = £20B, 10B Shares in issue, Annual Dividend payout = £1B
A holding of 10000 shares at £2.00, Yield is 5% (10p dividends a year) and the special dividend is 50 p.
You'll get return of £6000, and have 10000 shares with a new share price of £1.50 Total Investment = £15000.
Share consolidation happens. Market Cap = £15B. (Share Reduction % = 50p/£2.00 = 25%) Shares becomes 7.5B in issue
Some loss of Asian profits means Annual Dividend is now = £0.75B
10000 Shares in Old Tesco becomes 7500 New Shares valued at £2.00. New Yield = 5%.
Overall : Investment started and remains £20000, returns Dividend and Special Dividend (£1000+£5000) = £6000.
Overall a yield of 30% has been had. ...
It did make me chuckle, I would of been happy with 218.
For some reason I just gravitate towards Tesco when there's nothing left to buy as it seems so reliable and steady.
I got my last batch for 211 so yeah I think I'll hang fire and continue playing on the US markets for a little while.