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tomorrow , but I am hopeful that Tesco can get an increase in share price in the coming months along with the rest of the market, as we start to recover from Covid 19. Of course Tesco has not been directly adversely affected by Covid 19 on it's business, but the share price may have been suppressed along with the market in general.
mpw
''I Bed & ISA’d my TSCO holding. I even topped up my holding on Friday afternoon using some uninvested cash that was sat in the ISA.''
Well done.
I also purchased Tesco on friday
Tig
''none of whom consolidated their shares''
A large return of capital coming off of the balance sheet as a result of an asset sale quite often would result in a consolidation, especially when that company has staff share schemes where option prices have been set.
I am a Vodafone shareholder. Vodafone made a large asset sale which was returned to the shareholders, and a consolidation also took place. Obviously a special dividend maybe coming about as an example a bank not needing provisions that had previously been set aside, and therefore becoming available to distribute on top of the normal dividend wouldn't result in a consolidation.
Tig
''they have left our share price open to considerable manipulation by market makers. ''
I really don't know why people come out with 'market manipulation'. It is mainly made by those who are not happy with an investment that they have made, in not giving them a return that they seem is justified.
The share price of any company is determined by supply and demand .
I don’t believe that a private investor (or their accountant) will find themself in the position where they are able to choose how the Special Dividend is handled for tax purposes. That’s why, a few months ago, I Bed & ISA’d my TSCO holding. I even topped up my holding on Friday afternoon using some uninvested cash that was sat in the ISA.
The proceeds from the Asian asset sale, and the choice as to what was going to happen with the capital, has been reflected in the market cap of Tesco for quite a while. Any shareholder could have taken their share of assets at any time by selling shares.
It is also not worth individuals wasting their time giving nonsense opinions about the shareholdesr being 'robbed', 'it's all a trick' etc etc, and of giving alterative uses for the £5 Billion.
The decision has been made and passed at a shareholders meeting.
About 51p per share will be returned to shareholders this month.
The shares will be consolidated tomorrow .
The shares are going XsD tomorrow .
Tig
''Time will tell but for me this is a terrible way to use such a monumental sum of cash.''
Everyone has known the there was going to be a capital return. Any shareholder was free to sell their shares at any time.
Tig
''I just don't trust this current board based on this special dividend coinciding with a consolidation''
It is a bit obvious it should be done at the same time as capital coming off of the balance sheet.
TB
''Once it settles and I get my returns back I am out ......''
If I was of the view not to keep Tesco shares for the longer term, then I would have sold up before now. Obviously you must have miscalculated the repercussions of the return/consolidation.
Tig
''This doesn't feel very special at all ''
It is only called a 'special' as it's outside the scope of a normal dividend income return.
Anyone reinvesting the capital return back into Tesco will have a greater share of the company than they did before (stating the obvious), or can be invested elsewhere.
For the majority if they feel the need, would be paying 7.5% of 51p to UK plc, if the threshold is breached, so not enough to worry about.
Tig
''FTSE 100 firms are dominated by institutions.
''
So the majority of shareholders were if favour of the return of capital rather than pay down debt.
I would rather have the capital also, as I would be hopeful that I could get a better percentage return on it ,than Tesco debt interest rate.
Tig
It would have been better to have created different classes of share with the money to give people a choice. You can have a 'income' dividend or a 'capital' dividend. I/ my accountant will be classing it as a return of capital as it has come about by the sale of assets.
What others do is a matter for them
There were some very big buys after hours on Friday 1million and 2 million. I think the money men would have worked out if it was worthy or not.
''If the board wished to reward us they could very well have said that they are plugging the gap in the pension and are using the remaining £5 billion to significantly reduce debt ''
It doesn't matter how many different views there are as to what should have been done with £5 Billion, the fact is that there are people who run the business who are paid to make that decision. Shareholders could have voted against that choice.
Tesco share price was actually been held back by the fact of the dividend at 51p and the spilt of shares. Why would anyone pay more if they where getting them taken away and given back? Now this has been completed people can make up there own mind what they will pay.
Tig
''and be liable for (in some cases) a 32.5% dividend tax.''
I won't be paying income tax on my own capital being returned, no matter what others may want to contribute to UK plc.
Ok so you rent a house out and the rent goes up! Does this not mean the valve of the house hasn’t just increased?
Tig
'' we will all be no better off in cash terms. ''
Shareholders have already received the benefit of the Asian asset sale reflected in the share price since March. It's as if some shareholders want the benefit twice. As I have already said, without the asset sale, the share price most likely would have been a lot lower just as many other stocks are in the Market since March.
Hi all. This is jus my stupid view but before shares were consolidated they would have issued a full year div of say 10 p so shares at £2.40 that is a 4.16 % return but after the consolidation there will be less shares in issue so the full year div should rise to say 11.5 p so i can't see how the shares can open at around £1.90 as this would mean a return of around 6% so the she price has to be a lot higher. I would def be filing my boots at £1.90 or even a bit higher to add to my holding. Am I right with my calculations ? I welcome your views
Hi allThis is jus my stupid view but before shares were consolidated they would have issued a full year div of say 10 p so shares at £2.40 that is a 4.16 % return but after the consolidation there will be less shares in issue so the full year div should rise to say 11.5 p so i can't see how the shares can open at around £1.90 as this would mean a return of around 6% so the she price has to be a lot higher. I would def be filing my boots at £1.90 or even a bit higher to add to my holding.Am I right with my calculations ? I welcome your views
Tigra,
Surely there's been a certain amount of manipulation on the part of Tesco!! If the current SP was too high then it would cost Tesco more to buy back, so hopefully now things will be able to run it's natural course going forward and we should see SP price increase!!
Nigel
As an investor not an employee this return to shareholders is a joke.
Once it settles and I get my returns back I am out ......
?? Love the punchline ??
Tig
There has been no trick. No one has made money from shareholders.
It has all been transparent. All assets in a company are reflected in the market cap until they are released to shareholders. The share price since March HAS reflected the fact of the Asian sale and what was to be done with the proceeds.
Without a consolidation, the share price tomorrow WOULD have been about 190p to reflect going XsD.