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Hi all
Been reading up over the weekend on some new potential additions to my new ISA allowance and have been looking at SQZ. Can I just ask a question on the buy back and get an opinion. It looks like there is a maximum of £15 set aside which will be about 8m shares (original RNS mentioned more but then had a cap on the amount to be spent).
I can see buy backs of about 1.6m so far which will be held in treasury (500k transferred out today for employee options).
So a few questions / opinions.
Treasury transferring shares out for employee options - I can see this as good as prevents any further dilution - thoughts?
When buy back completes - which may take another 3 weeks at this rate - do we expect SP to drop a little as the buying is supporting the share price at the moment?
Why not pay dividends as opposed to buyback ? Do not quite understand the tactic unless it is to prevent dilution when options are exercised?
Not looked at a buyback before and the underlying reason so just interested in opinions.
Dividends are good and can be reinvested over time but the share price will drop by the dividend amount
Typically buy backs should provide an improved eps (earnings per share) over time and therefore a higher share price all things being equal. Buy backs should support an improved sp over time for longer term holders.
Dividend payments v buy backs is always a split debate and currently with a 23p total divi (14p final ex divi date upcoming in June) and a £15m buy back SQZ are satisfying both sides.
We await news on the possible Norway bid stated by Bloomberg on Friday, at least we know SQZ is pro actively seeking operations outside of the UK tax regime and who will be the new full time CEO ?
IMV, the buyback was too small and won't move the needle. Better to return cash to SHs as dividends and avoid any further UK investments which don't payback within 2-3 years.
Buy backs historically have not had much affect on the company’s share price, specifically if the amount of Bb is small compared to the no of shares in issue and company’s market cap, the only way SQZ’s SP is going to be re-rated is if they invest in a good quality overseas producer , this is the key to future success
SQZ has the means to find and purchase or even enter into a JV with a good quality long term producer overseas, but first they need to install a high caliber CEO in place give him time to embed and then try to find such producer overseas which will increase the daily production to around 65K , which given we already produce over 45K ourselves is not such a tall order one such overseas producer which is so under priced is PTAL which produce around 25K per day and they have potential to increase that to much higher
DYOR
The buybacks would have more credence, if the purchase shares were being cancelled, rather than held in Treasury! The company will gain dividends on these of approximately £1.1 million
They also able to give these to the new CEO when it arrives by as a lovely golden hello
Shares in Treasury do not receive dividends
Alavib; you me ruining buying/diversifying away from UK. You mention PTAL which is a class act - you could just as easily mentioned I3E, and a plethora of others.
But they can be used at a future date. I.E voting some cra..p deal through
Treasury shares can't be used for voting purposes
Sadly the share buyback doesn't appear too be working. Too small.
Dread to think what's going to happen to the SP once the buyback ends and the divi is paid.
Need to get our skates on with that Norway deal.
"Sadly the share buyback doesn't appear too be working. Too small..."
BB probably designed to cover LTIP's etc so as not to unnecessarily dilute Mercuria's percentage.
aimo & dyor
For what it's worth I decided to buy in today as a value play...fingers crossed....