Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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Got my divi in ii account. May see some drip buys today. Waiting for a pullback though to have another trade. If it moves up I am happy to stick so in a pretty good position here at long last! I think! Lol!
Usual caveats
Trek
Can't wait to see what happens next week. The sp over the last couple of days seems to be testing it's reflexes
Sliced 2k at 501909.
Not as high as I was hoping but it’s profit on my sub 500 buys. May or may not feed back in as I was overweight here. See how it goes.
Just a thought on the divi. That wound enough cash for aster to cross 30% if they so wished. But I expect they have plans independent to the divi.
Usual caveats
Trek
I think we're all sat with bated breath.
I always take the cash rather than leave it to chance.
Samson reduced short again yesterday
https://www.shorttracker.co.uk/company/GB00B02QND93/
I expect others have but as we know from the form 8’s they are below the thresholds.
If this moves up I would expect aster to buy more heavily. Go to 29.5 and then negotiate.
Liontrust have been reducing. They may back aster
Could very quickly get busy here and if not. +7% yield well covered and new incremental divi policy!
Traded my way to a tad under 505 now!
And it’s a quiet BB. Just goes to show eh!
Usual caveats
Trek
They took this down and now they take it back up....so that when the 9.2p gets paid on the 6th - investors will be paying more to invest the dividend than just a couple of weeks ago ...usual ploy to make divi buys more expensive
Yes I saw. I don’t know how that affects a CFD long as it’s not in the money from 42p! Lol!
Usual caveats
Trek
Appreciate no longer listed.
City am,
Christmas has come early!
https://www.cityam.com/christmas-comes-early-paypoint-swoops-on-savings-club-appreciate-in-83m-earnings-enhancing-deal/
I have added again just 2k more left to buy to reach my target.??
Shorters still at it but follow the numbers!
Usual caveats
Trek
Well if you squint I am just about blue now depending on the bid/offer!
It just may be the the sp is showing it’s intent to go back above 5 because it didn’t go below 483.
If so what an opportunity that has been! Having sold, and bought back cheaper several times I now have a much lower average and more shares.
Enough to sell some on the way back up at a profit and leave my original stake in for a 7.24% forward yield. A nice incremental divi policy, a recovery sector play that is pumping out volumes and improving efficiencies and of course an ‘exogenous takeover twist!’
Let’s see!
Usual caveats
Trek
Completed on 28th,
I wonder if the longs on APP will close then and the shorts on PAY.
I expected APP to go up today towards 44p the t/o price but it’s gone down! Lol!
I am at the point where I don’t think anyone knows what they are doing! Lol!
Usual caveats
Trek
Tomorrow is when the merger will hopefully be court rubber stamped. I am hoping it'll be upwards from today onward.
Added again under 5. Got a v good average now a tad under 509 so very confident I can sell a small amount into the next rise if I choose. I just don’t see this staying under 5 for long!
I note Aster are still buying on behalf of a party and now at 26.7%.
Imo they are in no hurry as will now wait for the app deal to imbed.
I just don’t see the point of such a large holding unless you make a bid. Whoever it is may have another party also buying!
Whatever they are effectively locked into PAY as any hint of selling and the market will react to what could be a huge overhang. Hence I still expect a bid and this year. In the meantime +7% yield for waiting!
Usual caveats
Trek
About time now.
With APP profit PAY could make 42-44m per year in the future, 56-59p per share. Not factoring in any growth. Too cheap right now imo.
This looks very cheap to me.
GOOD fundamentals and great div at c.7.5%.
Why is it being driven down? - a buy-out perhaps?
Why are you singling out PAY to become a charity? What about the banks, Post Office and shops that profit from trading with low income customers? PAY isn't targeting low income customers per se; it's targeting customers who transact in covenience stores, whether that be cash, vouchers or digitally, who just happen to be, for the most part, on low incomes.
About £10m of PAY's FY22 overheads related to depreciation and amortisiation. I suggest that you go and swat up on the R&D rules; product development doesn't isn't eligible for R&D tax credits. For the most part, PAY's terminals probably would never have been eligible (even in development) because you don't get R&D tax credits for simply assembling common, off the shelf parts into a completed product (as far as I am aware PAY has never created any besopke parts for its terminals). Its original computer software might have been eligble for R&D tax credits but subsequent enhancements probably not. The fact that PAY receives only a small amount in R&D tax credits does not mean that it's not undertaking product development. I would suspect a large part of PAY's overheads would have related to staff involved in software development, enhancement and support; indeed some of the software developemnet costs may even have been capitalised as intangibles assets if they were considered to be of an enduring, long term benefit to the business and are being amortised accordingly. The R&D tax rules are very specific and it's likely that only PAY's original bespoke software and knowhow would have ever have qualified; that does not mean that the products aren't being continuously enhanced and developed.
Finally, PAY is highly cash generative and is paying down its debt in accordance with its loan terms. In FY22 PAY took a one-off cash hit of £12.5m relating to a historic dispute with Ofgem which depleted its corporate cash (year end corporate cash fell by c£3m whereas it would have risen by c£10m without the payment). Much of PAY's debt has accumulated from recent ancilliary acquisitions (like the upcoming Appreciate acqusition) which have been (and are expected to be) earnings enhancing.
Stop nit picking or at least learn to read a set of accounts and brush up on the R&D rules, to get your facts right, before you do so. If you don't like PAY fair dinkum, move on. Stamp duty is a lame excuse for not investing (£25 on a £5k investment is hardly a deal breaker). Me thinks that you are simply trying to talk PAY down in the hopes of finding a lower entry point; on yer bike!
TheTrotsky, I took your advice and downloaded the '22 annual. It's a massive read at about 100 pages, far too long IMHO. Far too many moving parts in this company. What I did notice was that the overall costs are very high. The direct cost of sales seemed not too bad, but the indirect costs were big. I suppose this means rents, wages, heating and so on.
I take your points regarding the important social role this company plays and its reliance on payments from the public purse. In all seriousness, perhaps it would be better off operating as a charity, like the Nuffield, or some construct like Welsh Water. I don't believe it can compete in the crowded digital payments arena, given its shortage of working capital. The lack of investment in research and development also surprised me. I'm not hostile towards PAY. I would like to buy, but haven't found an opportunity. As time goes by, I doubt this will happen, but it would be shame to lose it.
BillBursio, They're not skimming or exploiting (as you suggest). They're providing them with services they need and can't normally otherwise obtain. Also, if you hadn't noticed, a number of Post Office outlets are now based inside shops; many of which will no doubt use PayPoint terminals.
As for paying bills at zero cost using bank accounts, are you actually financially literate? Do you think that banks don't make money from transactions? Banks don't just make money on "the turn" (the difference between the interest they pay and the money they earn from lending or depositing the money with the BofE), they also make money on transactional charges they levy on businesses, local authorities, governments, housing associations etc. If you'd ever run a business account you'd have realised that.
PAY, far from being a big bad wolf, is offering additional services; making it easier for both people and businesses to do business (one solution rather than a multitude of different offerings). Yes, PAY makes money from doing this business but so do banks, Post Office et al.
I'd also suggest that you try topping up your pre-payment meter by paying your bills at the Post Office. The hint is in the name - you pay before you use. That's not how it works I'm afraid. I suggest that you come down from your gilded tower once in a while and see how the common "man" lives for once!
"... a lot of people on low pay are denied access to anything other than a basic bank account - they are not considered credit worthy."
We're not talking about obtaining credit, but a basic Post Office account allows you to to pay bills at zero cost. I would certainly feel uncomfortable about skimming money from the poor. But, as you have explained, that is PAY's business model.
They process council tax payments and key meters. The energy companies switched a lot of people onto pre-payment meters.
BillBursio, If you look at PAY's recent RNS you will see that it's about facilitating transactions. PAY describes itself as channel agnostic and aims to provide a range of digital solutions to support clients across multiple sectors, including government, local authorities and housing associations (their words not mine). They've also struck up working relationships with banks, such as Funding Circle, to provide loans at the point of sale (for which commission is earned). Their PayPoint One terminals aren't simply cash registers.
You are right to question why you'd need PayPoint because you are privileged to have a bank account (a lot of people on low pay are denied access to anything other than a basic bank account - they are not considered credit worthy). You (and I) would never consider taking out a loan in a convenience store, need to exchange government vouchers or use pre-payment meters, yet a large proportion of the population do because they are denied access to the other options that you take for granted simply because they are low paid and their income is often irregular (to suggest that they are not sound clientele smacks of elitism and somenbody who is detached from, and has no understanding of, reality; bit like Marie Antoinette).
I'm not saying that PAY soley provides a service to the poor but a lot of the transactions they facilitate are for the less well off and it is a (very) large market. Margins are small but volumes are large. Also, think about the sites that use the PayPoint One terminal; they don't want people to simply walk in, cash their vouchers and walk out again. PAY, is providing these sites with the opportunities to generate additional incremental income, which not only benefits both the sites and PAY but also helps tie-in the sites to PAY.
I suggest that you don't invest in PAY because you clearly have absolutely no understanding of the real world is like for tens of millions of Brits (it's not out of choice that they find themselves in this predicament; choices simply don't exist).
PAY is a fundamentally different business from pre-Covid. Because of structural changes in its legacy markets (the loss of its British Gas contract in 2020, and declining ATM use and bill payment transactions), in 2021 PAY decided to sell its Romanian business and move into digital paymenst/transactions. Yes, the dividend was cut but has since started to increase again and the current market expectation is that it will pay a dividend of c40p for FY23 (FY22: 35p) although I think that it's more likely to be c38p unless it cust its dividend cover from c1.5 to c1.4 (still within its target range of 1.2 to 1.5).
PAY isn't a business in decline. PAY is a business in transition (moving from declining cash-based to increasing digital-based transactions) and I think the market is yet to wake up and realise that. Also, the acquistion of Appreciate Group opens up a lot more opportunities to cross-sell (PAY is anticipating Appreciate customers coming in-store to top up their Xmas savings and/or buy gift vouchers, which should be beneficial both for PAY and terminal customers, reduce churn and help acquire new terminal customers).
Are you saying that PayPoint is a service aimed at poor people and those in receipt of benefits? My point is that the credits have to come from some kind of account, via card, phone, PayPal, bits of paper, vouchers or, whatever. I still don't understand why I would need PayPoint, unless all I had was bits of paper. Why wouldn't I just pay directly? Of course, I understand that some people have only cash and may be reluctant to open a bank account, but these don't seem a very sound clientele. As to whatever plans for the future the BoD may have, my focus is on the existing track record in terms of hard numbers. When I see declining values over a 5-year span, I worry that this isn't a normal turnaround situation. I see quality in this company, but little growth and erratic earnings. I would have a go if it were a penny stock, but the thought of paying stamp duty leaves me cold. But it may be less than a quid one day, so who knows?
PAY was way overpriced at £10. But the general decline in PBT, EPS and 2 div cuts in the last 5 years paints a fairly bleak picture (Covid excepted). They seem to be the kind of company that's running to stand still,. or even move slowly backwards.
The next set of results will be very telling, as so far there's been little evidence of a return to pre-covid levels, and there would have been a big increase in poverty levels over the past year thanks to food and energy price inflation, which should be benefiting PAY's business.