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Spindler, you just don't get it. You don't run a business like you run your home. Pension costs were reduced using some of the capital from the recent sales. Paying down debt would have been a stupid strategy in an era of all time low rates (which TSCO have re negotiated)which they can continue to offset tax liabilities.
You would have been better off selling before the ex div date and buying back in and if you'd left it you'd have had more shares than you started with with where the SP has gone. At these levels on a consolidated free float this SP is the equivalent of well sub 2 quid 1.70/1.80 based on the pre consolidation. A debt laden company still with a pension deficit that wil likely grow. A repaid rates rebate on top of increased costs of covid of nearly a billion. The online not being so majorly in demand now we are coming out of the woods, so i guess that's going to need trimming to find it's optimum level.
Way to go BoD ..way to go...
I have said before without all these shennigans you'd all be the proud owners of a debt free company with a SP way above 300p.
All thanks to a Board of Directors and their city chums doing a complicated share consolidation alongside a Special Dividend that effectively cancelled each other out so no share holder benefit except for those who it was actually a tax liability and thereby incurring a loss. The net effect was a return of capital but it wasn't that it was a Special Dividend so taxable if not held in the type of investment wrapper such as a SIPP or an ISA. HMRC are going to follow the rules not make a one off judgement and say hey those poor TSCO holder's didn't actually benefit or will actually be penalised.
Rules is rules and the BoD chose to do this, for whatever mind boggling reason.( I can only think due to some benefit to the BoD.)
Hey they apparently didn't even clear the pension deficit and they have half the market capital in debt liabities.
But hey ho theu did a return of capita via a share consolidation and a special dividend because they couldn;t find any other use for the money...like clearing the pension deficit in full and paying down debt....
What was the incentive to do this for the Board ? Are we back to the bad old days now Gorgeous Dave has scarpered ?
https://www.gov.uk/government/publications/share-reorganisations-company-takeovers-and-capital-gains-tax-hs285-self-assessment-helpsheet/hs285-share-reorganisations-company-takeovers-and-capital-gains-tax-2018
Not sure if this helps, but may be useful generally.
If possible, this is why you want shares in an ISA, as nothing to declare then.
Many thanks for the knowledge eccles that clarifies it.... it seems black and white from the tax-mans view then. Better to stump up the cash now than get a punitive bill later down the line. Thanks again.
I must say been shopping at two Tesco's over the weekend and both of them was very busy looked at the trolley's and they all seemed full to the top so looking positive for a change from my view and as the roadmap gets lifted should get an extra boost with all the lockdown money getting ready to be spent... yum yum
Elgrebe, As I have already wriiten a few days ago, you may say that it is a return of capital and some would agree but that is not HMRC's view. If dividends from investments exceed £2k in a year the excess over £2k are taxable at 7.5% and you are obliged to declare them unless of course you have unused personal allowance as my wife does. It's simply not worth the risk because if at some future date an HMRC employee discovers it they can give you a nasty caning. I recall a case from when I was in practice of a farmer's wife who was doing calf rearing as a side line but not declaring it. In some mysterious manner they found out, took the case back 13 years then got their £11k tax and doubled it for a penalty.
Could anyone share some of their tax knowledge please.... my wife’s filling in her tax return and are we correct in thinking because the special dividend was a return of capital with a share consolidation, do HMRC need to be informed? as its not income and therefore not taxable.... Just our own money being returned. Tried in vain to contact HMRC about it and got cut off! Any thoughts please. Thanks.
Interesting article in the ft today regarding supermarkets.
Terry Smith doesn't seem to be a fan but others are more hopeful.
Terry Smith, one of the UK’s most successful fund managers, said the sector still had unattractive characteristics, including margins so thin that “every bump in the road is potentially very painful”.
“They also make very low returns on capital, significantly below their cost of capital, which in the long run is disastrous,” he said, adding that many of the benefits of restructuring had flowed to customers in the form of lower prices.
“Over time they have started to resemble utilities funded by shareholders for the benefit of consumers,” Smith said. “To paraphrase the late great Sir Brian Pitman, sometimes some markets don’t produce any winners.”
Haha. I can see why the nonsense happens on small cap aim listed potential coal mines, a mine at that stage being "a hole in the ground with a lier stood next to it", thanks mark twain. There £6k of volume from ramping or reverse could possibly do something. With this it's just weird!
All this "ramping", "deramping" chat is bizarre. This is a vast company with daily volume traded of £50m quid a day plus.
The notion you could influence the price by posting here is like suggesting you could change the earth's orbit by stamping really, really hard. Just bizarre.
From Monday 19th April when Tesco just about came with in a whisker of 235p it's been selling off more or less everyday. Hopefully now the selling has stopped and the buying can start to lift the share price just in time for the Divi.
Yes you have to watch the companies you invest in.
Any where an individual own big % can be a trap for the PI.
Generally big FTSE100 shares are very liquid, and not many have individuals that own huge % as these are mainly controlled by the IIs and Investment Houses like SLA etc.
My first ever share purchase was MRW back in July 2004 @ 195p. Shortly afterwards a major II sold all their holding and caused a 5% drop in no time. Amazing that 17 yrs later the SP is lower which I think is the case for TSCO and SBRY too. It might have been around time that MKS was being pursued by Philip Green for a fiver - now look at MKS shares too. All sorry stories for the LTHer.
I am more inclined to target 5-10% once or twice a year if I can these days rather than hold long term as I have had so many shares that just drift down and down (more than Status Quo) including two or three of my current holdings such as GSK, IMB and RDSB.
Cheers - CSDI
Not sure why supermarket stocks are out of favour right now, even travel stocks are doing better and they are not even sure to be operating, you get sick of the low price but I would guess there will be some investors on here that bought in at over £3, don't know if they will ever get back to £3, my average buy in price is £223.5 and even though I know the sp will drop on x divi day I will not be selling until after that because the sp will probably climb back within a month,
"Tesco is a quality defensive stock" - someone must be having a laugh, not sure who.
I am in for a short term trade, with my first ever purhcase of TSCO
Bought yesterday @ 223p with a standard weighting of 6% of my SIPP.
Target of 235-240 over next month or so, with the divi as bait hopefully.
Not applicable to Tesco but there was a Share i was invested in last year that had the institutions piling in for the dividend. This company had the founder who held circa 50% of the company....I actuall sold to buy Tesco in the last 10 minutes of the trading day before ex dividend the next day.....so glad i did....rns the next morning the chairman had done a behind the scenes deal to sell a big chunk of his shares to add to the free float and at a significant discount....SP plummeted i bet the institutions felt like turkeys that had been plucked ! But it really looked like a honey trap....an rns very next day....this as i say not going to happen here very different setup ....but it's all part of investing and learning
Hope so I got a wedge waiting for it
Am thinking could test the 2.10-2.12 mark.....next few days. Based on previous history.
Hmm it went 2.07 inexplicably and might have been lower i can;t recall back around that time....and it wasn't that long ago either...I watch gnashing my teeth at one of the few companies making hay an the absurdity of it.....of course the covid costs that the BoD decided to pay back as they didn;t want a windfall tax on a Special dividend ...alongside their share consolidation....now i hear they've left a billion deficit on the pension that will now grow like an untreated verruca...not to mention half their market cap in debt obligations.....
I'm waiting to see if this ends up in bargain territory...and it's certainly not there yet...and to be honest for holders i hope it doesnt go there....i do think the business regardless of the debt is worth more than the current SP but who knows where its headed
Don't know where to post this but I hold Tesco and added at £2.20. I've watched the colour of financial language these last few days and stats and state the following - IMO DYOR no edge to this - as I've moved to more cash.
1. Big Tech US Earnings season- this week - Peak demand - Great way to drop the US Market apre-ski
2. Biden 18th Stim package - tax the Wealthy US for health Care - Agree but we took 50 years on this not £1.7t in 3months - will impact US equities - overwhelmed and can't forecast EPS & Futures PE's with Tax increases - biggest change in 40 YEARS & S&P unchanged ????????????!!!!!!!!!!!!!!!!!!!!!!!!!!
3. US Corp tax rate & loop holes - Big Tech = Apple $1.5T Makt Cap - should pay $80bn tax not STOCK BUY BACKS - IMO
4. Surge in Crypto worldwide asset allocation (Whilst FED keeps Int Rate low) - too much money swashing about on volatility - potential to accelerate disrupting \ any Equity MARKET!!!!!
5. S&P at All time High - can it go higher? - With Tax increases US Corp & Wealthy - reducing future EPS if no loopholes??
6. FTSE near 7k limit - can it push higher?/ - IF there is a US correction???
7. Commodity Inflation - Copper\ Oil Wood - Precious Metals - One way upward trip with World demand & Crop prices
8. Interest rates Q2 -4 pressure
9. Auto & tech - CHIP shortage - Ford cost $2.5bn
10. Sell in May and Go away
11. US Stocks - Q1 80% beat forecasts average reaction down 20pts
12. INDIA CORONA VIRUS NEW VARIANT - as really sad and distressing this human catastrophy is - it can hit all our phyiscal well being. World needs to jump and support this as a 'War Zone' now. Throw all support to help India.
13. Peak Rate of change - in US corp earning compared to deflated Q1 2020
14. S&P up +80% since pandemic. Peak Rate of change priced in?
GLA - I needed to get this off my chest - Tesco is a quality defensive stock and I will add at suitable pricing. GLA - I may be blabbing - but I'm genuinely concerned here and needed to share it. If i'm totally screwed up - no harm- this is NOT a Deramp of Tesco whatsoever, just a global equity reality check. GLA I can sleep now. GN
Also bought more today and may get more between now and XD day.
I am in for a short term trade, with my first ever purhcase of TSCO
Bought yesterday @ 223p with a standard weighting of 6% of my SIPP.
Target of 235-240 over next month or so, with the divi as bait hopefully.
Counting on short term support at 220, which has held so far in 2021, but already sitting on it, so may fall through.
Hopefully the risk/reward here plays out successfully.
On a similar theme, I quite like the REIT called SUPR which has nice quarterly divi.
I've just sold those shares last Friday after 4 months for 8% profit and would like to repurchase if they have a small pullback from their recent ATH @ 114p.
Cheers & GLA - CSDI
Supermarkets been out off favour and on down would trend now lots of competition around online sales now on the retreat.Have to see how far online sales drop they have all ramped up drivers vans capacity at huge cost and with profit margins already squeezed.Am watching mrw and tsco at around £1.60 and £2.05.
28-Apr-21 17:13:02 219.70 411,261 Sell* 219.95 220.05 903.54k O
28-Apr-21 17:08:35 222.998 1,416 Buy* 219.95 220.05 3,158 O
28-Apr-21 17:10:05 219.70 408,340 Sell* 219.95 220.05 897.12k
I am still sure there is a lot of market manipulation so individual investors have just to take pot luck
Am thinking could test the 2.10-2.12 mark.....next few days. Based on previous history.
@colti
I just topped up as well, it looks a sound bet at these levels