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Last week I bailed. I had the ROC and Divi payments, and I looked at the slipping SP and thought to myself that nothing was going to happen anytime soon. I swapped into RR. (not for the first time) - which turned out to be very fortuitous. So I nicked that (nice for one weeks' "work") and then started looking at where to park it next. After some poking around, and the SP having slipped a bit further, I came skulking back. I still think that AGK are undervalued and that the energy problem is going to play into their hands down the line. As for my oft quoted £18 target? yep, still looking for that...
From their website "The intention is that, subject to market movements, the share price of one New Ordinary Share immediately after Listing of the New Ordinary Shares should be approximately equal to the share price of one Existing Ordinary Share immediately beforehand". On 28th May 2014 Aggreko shares were trading for around £17.49 and were set to pay out £0.75 as a special return of capital. £0.75 is about 4.3% of £17.49. Therefore you'd expect the share price to be £16.74 the next day (as buying the share would no longer entitle you to the special return). However in order to keep the price of the share roughly the same the shares were consolidated 79 for 83. In theory this increased the value of the existing shares by 4.8% and effectively stopped the return of capital from affecting the share price. TL;DR Basically Aggreko wanted to pay a 5% dividend without the share price changing so they reduced the number of outstanding shares by around 5% at the same time.
As an amateur can someone please explain the reasoning behind the consolidation? Is it to reduce the volume and thus drive up the price - short term fail there then! Raise capital for large shareholdings? Is it a sign of something "bigger" in the pipeline? I would be interested to see your views Ta!
http://ir.aggreko.com/investors/shareholder-services/capital-return.aspx Basically if you hold your shares through Crest, you will get credited the return of capital on the 6th June. As for the value of new vs old...
I don't get this, so there has been a profit spread between shareholders, yet these same share holders get their actual holding reduced? I figure at this moment in time then I have gained nothing from all this, yet lost around 100 quid at current price.
When should I expect this cash return to be in my SIPP, the number of shares has been altered but no sign of 75P per share.
There was a share consolidation, you should have been notified by your broker or provider.(see below) The Company has announced its intention to return approximately £200 million to Shareholders, equivalent to 75p per Share for each Share held at close of business on 27th May 2014. At the same time the Company is implementing a consolidation of its Share Capital, whereby Shareholders will receive 79 new Shares in place of every 83 Shares previously held. The Return of Cash gives Shareholders options as to how and when they receive their proceeds. You should have received 75p for every share you owned on May 27th, plus you'll need to adjust your portfolio to reflect the new share status (79 new shares for every 83 previously owned) You can do this on most portfolios.
I had 1000 shares, held for a year. Now I see on my account I have just 951. What's happened? And what's this special divi? Any information welcome.
So, bogsd it looks like you were right. No accident that the CEO was announced so close to the ROC date, but it looks like many took the return and bailed. I did wonder at the delay - about a day - between the SP falling and the ROC date. It almost looked like the CEO announcement triggered the fall, but I know that the divi check fell on my mat between the two, so my personal guess (and it is one) is that this is the sell off after the ROC was confirmed rather than the CEO announcement. Still holding to 18
Hummnnn - not so sure Bob ,still no positive news of up coming large projects ,regardless of the new boss impact the projects arent there at the moment and that's all investors are interested in hearing .Reducing operating costs could be an option as i suspect there's a lot of fat in the business which has developed during the "happy days".Be interesting to see if there's a rush to sell after the May divi.
The start of a nice recovery. If the announcement of the new boss is greeted favourably I'm confident this will return to 18+. GLA.
Fairly gloomy prediction from Questor: http://www.telegraph.co.uk/finance/markets/questor/10769387/Questor-share-tip-Aggreko-still-a-sell.html#disqus_thread Price seems to be falling off again after yesterdays minor bounce, but then there does seem to be a general market malaise atm.
I see there's a special 75p divi on top of the normal one.Couldn't make sense of the info.Is it a straight forward divi or is there some kind of transfer to a B share?Appreciate any clarity,also noticed huge sell on friday,more than 3 millions shares in one trade!
Got home tonight to find the 171 pages of the annual report had slammed through the letterbox. Somewhat daunting - I own novels that are shorter than this... I read through pages 7-20 and was pleasantly surprised to find a fairly straightforward and slightly humorous / honest appraisal of what it is AGK actually do. I'm inclined to read the rest of the Strategic Report (runs to p60) when time allows. I've trawled a few very bland and hazy reports in the past, but this one, tbh, is quite interesting. Plenty still to go... DYOR, but at least do some. :-)
Strengthening competition for power projects, no BIG projects on the horizon,lack of innovation and the CEO quits - Aggreko looking a very "ordinary" option these days.
Glad I got out at £17.15 last thurs morning. Looking for new low to buy again here in the next few days.
well the boost this morning with the results has been to give many the opportunity to sell up.....despite the div increase... Very competitive and uncertain business environment and now in need of a replacement for Soames...
Really hoping for a boost tomorrow.Seems to me the city has fallen out with Agk and has bet on its demise.Strong results for 2013,at least up on expectations,should give the share price a lift.cheers.
Yes the same guy - he had to ultimately fall on his sword but AGK have a very experienced team - however they need to be allowed to manage but yet again there's no democracy in the Army ! .Lets see how the much smaller Commonwealth Games go .
DTS, formerly of G4S? If I recall correctly the last Olympian project he was involved with ended badly for his then employers, and he carried the can (rightly or wrongly). Would his appointment not raise question marks over AGK's ability to handle major projects?
I agree Omji - new strategy required as the old Orange was in danger of becoming a Jaffa ! There has been a lack of innovation over the past few years and they were in danger of becoming fat dumb and happy - lets hope the new CEO (I'm tipping DTS)will give them a shake up. Rumour on the street is that year end results out tomorrow are better than forecast and will give the stock a much needed lift.
i think its a positive move Soames moving on.Agk needs a new direction and fresh ideas.maybe a young talented Scot for the job!This is still a world class firm with big contracts on the way.Dismiss it at your pearl.
The CEO resigning could be as a result of the strong competition Aggreko are now experiencing which, I met a lawyer who was on a team selecting their IPP supplier , the team chose APR ENERGY due to their team approach to deliver the power required. Aggreko will continue to perform but not have their own way. For me I'm backing APR Energy, they have some big hitters behind the scenes like Madeline Albright the ex us Secretary of State.
theres your answer fellas
The power behind Aggreko was its founders Gordon Toulamain and David Yorke they developed a fantastic culture in the company and a Suberb product fit for all global markets. Salvessen bought them but the founders did the business.. Aggreko were so successful they masked the poor performance of Salvessen so investor pressure caused the float of Aggreko as a stand alone PLC. Whilst major events give a big boost to earnings , it's the Independent Power Projects (IPP) that brings home the big. Bucks. Due to Aggreko blowing their trumpet in the financial press in the 90's competitors came along in the name of Caterpillar ,Cummins and GE the latter pulled out due to GREEN Enviromental issues of using diesel. The GE kit was picked up by APR energy and some smaller players. The outcome is Aggreko now have stif completion on IPP , but due to there MULTI set fleet they are still No1 in major events. As investors are aware the cash comes in lumps so you need to be switched onto there big deals.