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I am not terribly impressed with the activist shareholders turning down the 270p Newmed deal and then watching my investment plummet to 245p a share before the return of capital RNS and now 210p today.
Have they spectacularly messed up or am I missing something? Does it all suddenly work out ok when there are only 150 million ish shares next week? Do they receive 100 to 200 million dollars legacy payments and also sell Egypt and receive perhaps 300 million dollars and then return that to 150 million shares? If that is such a good deal why is the share price 210p today?
RagstoRich,
Treasury shares - don't count when it comes to voting right's or Market Cap.
Some company's like to just cancel the shares they've bought back immediately, other's buy them back, put them in treasury & either cancel them at the end of the buy-back or (split it into a couple of cancellation). Other's hold a certain number of shares in treasury, which they can then issue easily for conversion of options by director's or staff etc. I believe it saves them a lot of paperwork doing it that way, rather than having to issue new ones.
The dividend on all the treasury shares they hold won't be paid out & thus the money is retained by the company, So they'll be paying out at least $1M less than planned.
I'm surprised that they didn't buy back any shares by the looks of it yesterday ! To at least get themselves to an average buy price of £2.178 per share which is the neutral point.
Post the consolidation there will be 148M shares in issue instead of the 315M currently. The buy-back should take the number down to around 140M.
So the other dividend there talking about in Q4 will work out at around $0.715 per share (or @ £0.57), they don't say if that's going to be paid as an ordinary dividend or whether it will involve a further share consolidation.
Feels to me like someone is trying to push that price up to the £2.18 level ahead of the consolidation. If they fail to get it there then the share price is going to be lower on the Tuesday morning than the price it closed by. If it closes on Monday at £2.16 then the price on Tuesday morning will be £2.142 all other things being equal. At £2.14 Monday close it will be £2.10 on Tuesday morning.
Hence there is no real incentive to buy sub £2.178 as you'll be able to buy the shares cheaper than that come Tuesday morning. Unless its for tax reason's that someone is doing it.
LOTM
LOTM - I've been trying to figure this out too, but I assume the treasury shares will receiver the dividend too, which should stop any value loss linked to SP? I'm not sure what happens to this money but I'm guessing its paid back to the company?
Agree its unusual that they didn't wait until post divi to start the buy back, it would have been much cleaner and I think the support will probably be needed more then than now!
I also question how much holding the shares in Treasury actually does, instead of destroying the shares. It just reduced liquidity slightly but doesn't actually do that much for the share price (same MCAP, same no of shares).
I'm generally all for share buy-backs, especially when the share price is below NAV.
However I'm not sure that CNE buying back its shares ahead of the share consolidation is the right thing to be doing.
If the share price ends up above £2.20 at 16:30 on the 15th May then it will have worked out in existing shareholders favour. As the cost of buying back shares the next morning is likely to be slightly above the price it was at 16:30 on the 15th with all other things being equal. The higher the closing price on the 15th above that level the more beneficial it is.
But if the share price closes below £2.18 on that day instead then it won't have been in the best interests of existing shareholders, because with all other things being equal, The opening share price on the 16th will be lower than the closing price from the 15th. So it would be better to do the buy-back then. Indeed the lower the share price is (sub £2.18) prior to the consolidation the bigger the loss is to the existing share holders.
Very Tricky to know right now, where exactly the share price will end up prior to the consolidation, but sub £2.18 looks the far more likely, its just a case of how much below & the multiplied pain that is going to have on the new shares opening price.
LOTM
Joseph,
If you go to live RNS and read the circular about it, you'll see the ex-div date is 16th May. So you need to hold the stock at close of business 16:30 on Monday the 15th May, to be entitled to the div, but you'll also end up with just 33 new shares for every 70 you own at 16:30 on the 15th.
LOTM
GM, what Is the last day to buy dividend and be entitled to receive special distribution?
15 or the record date therefore the day before ex dividend, right?
Thx
The new changes are welcomed!
Old BOD:
- Did not want to do dividends that often
- Did a tender offer?? Come on... we did not get any noticeable value???
- Proposed odd mergers
**had they released more dividends to shareholders (returned excess cash) they would still have their jobs today.
New BOD:
- issued clear statement that any excess capital will be returned to shareholders!
- Special Div, Q4 Div, 25 mil. stock buy back
They are leaning up operations and trying to get shareholders good will. I think
they will sell the company / merge in near future. They just need shareholders
on their side. I called it here first!
Simples!
Google Viking CCS project. Its the future.
Their BOD have foresight.
Thanks to both of you Grumps & Rags.
Still not a happy CNE holder, but who knows maybe just maybe something will come around. Lottery tickets anyone??????
I'm not an investment Guru, but I do my research on the companies I invest in, build economic models for them and try to understand the risks associated with them.
To be honest, right now I have no advice. The economy is in the most difficult position and its nearly impossible to tell what is going to happen. This is one reason i'm so against this company having all eggs in the Egypt basket (a country with some of the worst financial issues globally - good luck getting receivables down)
Nearly all of my portfolio is in money markets or safe haven assets right now. Can I ask why harbour? Genuine question.
OK rags, being as you portray yourself as some sort of Investment Guru, I suggest we form an Investment club.
I will start off with this. I have halved my Capricorn and Invested in Harbour.
Over to you for your suggestions.
I am not the CEO of Capricorn, I do not make the decisions. As a shareholder, I am entitled vote on proposals put forward by the Board Of Directors.
In simple terms, the proposal is to return half the value of the company and devalue the rest of the company by half to balance things out. Genius. What is the point? Does it cost nothing to carry this out?
We have been through this process before , it is not hard to research what happened in the aftermath.
The cause of this companies downfall is to give poor management Modi's Billion.
If this is the best the new board can come up with as an Oil and Gas Exploration and Production company, then they themselves deserve to go the same way as the old board. Into oblivion.
Trying to look at possible up side would be 150 Mill shares leftover in co. We r still sitting on 300 Mill cash plus 100 Mill awaiting north sea sale. What ever we get from Mexico fields sale. Potential from Egypt is it still 600 Mill or should that drop to 400 Mill. We still need to see if Senegal goes into opps this year possible another 100 Mill. Could still be awaiting another 4 dollars plus per share if co sells everything. Or has their plan got legs. Sorry this is I see it. Best Trebor
Corrupt ??, we’ll at least you will be able to sleep knowing that you’ve taken a 35% hit in value but avoided this apparent corruption.
Unsure how well you will do in stocks if your aim isn’t making money
Grumps
Would you be as kind as to help me a little here. Is possible not to consolidate & retaine the shares one holds at the moment.
If so to what advantage would it be to the holder.
Go easy on me man, just not understanding some of this. After being in here for such a long time was hoping to get some return.
Needless to say I will be more than grateful for what you say.
B.
If you don't want the Divi, and the subsequent devaluation via consolidation, send a message via your vote.
I have.
The New Med+Capricorn deal can only be described as corrupt. They openly stated in the RNS that special payments would be made. Its history. Move on. The BOD that came up with the proposal have.
Grumpus, are you suggesting I buy BP, a £85 billion company purely for their 50% holding of a 50% stake in a £3.2 billion asset?!
Why would I do that? it makes up less than 1% of their MCAP....
Are you happy with the results and the small dividend which has resulted in a 20% decrease in value over the NewMed deal?
Rags,
Could I suggest you buy BP? That way you will be getting your share of the New Med fields. Its a great opportunity.
So the money from India took the share price from £1.20 odd to £2…. If you held shares, you have the India money? Getting it as a dividend (which is what this partly is) changes nothing.
What is a tragedy is all those who let their feeling for the old board get in the way of what was a fantastic deal, which would have given us 60p + a share by now. How the new board were allowed to turn that down and destroy shareholder value is tragic. But a lot of people on here were all for it!
Trebor.
Try thirty plus years, I feel the same as you, they have f****d us up time and time again.
Not one penny from India.
Shame on them.
Sorry to ask where did this update come from. As I feel quite distressed at this information. After two lots of this crap from previous board. We are going to be shafted Al over again. What happened to all the addition money we were told would be avaliable to all share holders. What have we done ?. I am 10 years in and now have to say I give up. My very best to all long term share holders.
A divided just moves money from the SP into your bank, then reduces the SP by the same amount.
Here's an example:
If you own 100 shares today it is worth £219
You will receive a dividend of £115, your 100 shares will then be worth £104 (and the SP will fall to £1.04 since $450mil has been removed from the companies value)
However, to keep the share price stable, the company will consolidate the shares (33 per 70)
You will thus hold 47 shares post dividend and consolidation, with a share price of ~£2.19 (still worth £104).
End result, you have the exact same amount of value overall (£219) but £115 is now in cash from th divi and £104 is in the remaining shares.
One off big dividends aren't much to celebrate, you wont make or lose any money overall!
Cot.
I agree with you ??.
This not the first time.
They did an 11 for 13 split in Dec 2020
They did some jiggery pokery as well in
Feb 2012.
Again in 2009
Also 2007 not sure what was going on on the last two.
Was too busy sorting out my own life. Anyone who has any information on that would be more helpful.
The amount of share's I will end up with is about a quarter of what I started out with many years ago.
Sad but true.??
The way I see it for every 70 shares they are consolidating to 33 shares. So, at todays prices 70 shares would cost £153.58. They reduce your shares to 33 which are worth £72.40p. They give you the difference back as a special dividend ie 70 x £1.15p = £81.17p. To sum up, you’re getting nothing extra.
Hi
Current price 219p per share:
Is the special dividend 1.15p per share = 0.525% or
115p per share = 52.5%?
Which one ?