The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Good luck Spindler with your next investment. Profit is a profit.
Chartwise IMO this is pretty significant resistant to break through.
Will still follow out of interest and an education. I can't help but note the volatitily in the time it took me to write my first message from low 2.41 to above 2.47.
Hi, am I correct in saying that we are going to get a special dividend of 50.93p and the number of shares we own are going to be reduced. How on earth does this work and at what point will our holding be reduced , can anyone assist please, thanks, Colin.
I jumped ship on these yesterday earlier than I wanted to. I have seen too many profits evaporate by holding out and took what I had. Without the consolidation shennigans I saw these following the broker forecasts. I am sure there are reasons for the approach but I don't see it and nothing here in the discussion has converted my doubts. To my mind share buybacks can achieve share consolidation and considering they didn't need to borrow money to achieve this unlike so many companies hollowing out the business by borrowing to buy back shares, I just don't know why they didn't go this route or the alternative to pay down existing debt. This seems to me the opposite of a stock split which generates excitement(justified or not) by giving you more shares this in my humble opinion has patently done the opposite. I didn;t even have the SD tax issue but nah no longer felt comfortable with this holding. Just my opinion and ultimately that's what I had to follow.
Hi Rosewall.
I was only trying to set out why the special dividend/consolidation combo is not giving with one hand and taking back with the other. There is a net benefit to shareholders. albeit one that is not easy to quantify.
As for the decision to sell the Asian businesses and the price obtained for them I have no meaningful opinion because I know close to nothing about them. What I do know is that it was a strategic decision by Tesco rather than a distressed sale of assets to raise cash. That fact alone makes it more likely that the sale price is a fair or advantageous one.
Keep up the good work!
Stevieb
"The company will be weaker because of the £5bn distribution but you have received your full share of that so the effect of this is neutral."
You are right in most of your comment however, you have to take into account the fact that Asia businesses (the profitable one and the loss making one) were sold at a profit. The NAV will be reduced but for far less than the £5bn which is a combination of asset value and profit hence the reason why the company paid tax on the transaction.
prussell
Had MARS in the past and JET2. They are both still my preferred recovery companies. Had a trade with the latter last year and sold on the run up to £10.
TSCO will be my yielding company so the SD is just a distraction in the short term. My average is 2.27.
Good luck with your other investments.
Hi leas, yes I benefited from being a Greene King shareholder, both in terms of their eventual purchase price and by their shareholder benefit scheme, they had a very generous 25% discount and I think it could be used 4 times per week........... JET2 is my preferred airline stock, I bought in at 460p (its high was 1970p) and sold at 1300p to buy my TSCO holding. I am hoping that TSCO will be the same springboard into other holdings, building each time. JET2 touched back at 1188p earlier this week and has recovered to 1250p and I believe that again as soon as this horrible pandemic allows, there will be a huge surge in travel, pubs, restaurants etc and many of these companies are already preparing for this....... its about choosing the right one, like all things in life it seems! Stay safe everyone
prussell
Have my eye on a couple of hospitality too and one airline travel company. I’m sure you are aware that some hospitality companies have shareholders preference schemes, so you can get drunk at a discounted rate as you see their sp fall :)
Hi MikeM14
Thanks. I was unaware of those details. Very good of you.
Hi POLOMan,
If I'm understanding your question correctly, you're asking about income tax paid on dividends. You're allowed to have £2,000 of dividends a year free of tax (so you're only taxed if your total dividends in the year - Tesco and everything else combined - exceeds £2,000. Then, if you're a Basic Rate taxpayer, you pay tax of 7.5% on just the bit of dividends that's above £2,000. Dividends from shares are now paid gross - it changed a couple of years ago (April 2016) before which they were paid net (ie tax had already been deducted). If you're a Higher Rate taxpayer, the rate of tax is 32.5% (ouch!).
I hope that's of some help. I'm not an expert, just someone who has to do self-assessment tax returns every year.
Mike.
Thanks Steveb for that explanation.
As an ordinary rate tax payer and NOTholding Tesco shares in an ISA, am I correct in assuming that seeing my monetary holding reduced by the level of my dividend payment at GROSS but the payment being subject to tax, I will be worse off by over £10 per 100 shares held?
Hi leas, in honesty I dont have a target yet, however am keen to get something invested in hospitality as a long term recovery plan. Interesting that one article in Mail on Sunday has boosted NIGHTCAP by 0ver 40%, but I do question my own reasoning for considering dropping TSCO for hospitality, think its the gambler/punter in me. So for the time being I may sit on my hands and watch TSCO and put time into hospitality research. No question in my mind that as soon as is possible and for next 2 years, airlines, hospitality, holiday comapnies etc, all the things we take for granted which have been removed will see a spike/boom from current all time low share prices. There is a degree of FOMO re hospitality recovery, however there is the same re mining, communications, tobacco etc, so its just a question of not getting bent of of shape on the misses and take heart from the hits!
You forgot to throw the share price consoliation in there Longtimeinvestor... ;)
and is why I own Tesco shares and not Ocado ones.
How can Ocado soon (after capital return) have a higher market cap than Tesco,
with a fraction of Tesco's profitability?
Because of the tech...same as for Tesla
2.55 for me on the 12th feb would be nice
How can Ocado soon (after capital return) have a higher market cap than Tesco,
with a fraction of Tesco's profitability?
I will be reinvesting my dividend in more shares which will put me back to where I am now as I feel with less shares in circulation and the when the bank sector starts recovering this is a go long share, my money saved in the bank is getting negative returns at the moment so the way I look at it is my money is not losing and only gaining, others can argue there’s bigger gains else where but bigger risks as well, I am staying with steady Eddie Tesco thanks last year 9.15p in dividends next year will be bigger without the loss from abroad and fewer shares in circulation. Just my thoughts Dyor
if fact first half profits were up over 28.7%.
Who needs Asia
I am hoping for 300p (post consolidation) within 12 months
investors showing a bit of interest after penny dropping?.
Pension deficit has gone
Nearly 51p of investors invested capital to be returned to them.
Only about 10% of previous profits lost by Asian asset sale.
Performance in UK and Ireland may well make up the 10% profits.
Polish loss making assets to be sold.
prussell,
After 26th Feb you will have received a dividend.
You will own fewer shares but there will be fewer shares in circulation. Your portion of the company will be unchanged.
The company , which you own the same portion of, will be a better company because of the pension repayment and future earnings per share will likely be higher going forward.
The company will be weaker because of the £5bn distribution but you have received your full share of that so the effect of this is neutral.
Overall you are better off because you own part of a strengthened company, something which should be reflected in the share price once things have settled down.
This does ignore the tax position which differs for everybody. It is the dividend tax which is IMHO stopping the price from surging more than it is.
Only my thoughts. Keep DYOR!
prussell
I am sure the CFO and the BoD have taken advice from the city and done their due diligence in this matter. We have had a few recent RNS announcements on debt restructuring and the proposal to buy their own shares that will be voted upon on the 11th Feb. We will then have a reduction in pension costs and the reduction in shares that will make the EPS look more attractive. The current CFO looks like he is 'putting the house on order' before he hands over to Imran Nawaz in April.
It would not surprise me if we see further cost cutting decisions before that date.
Lots of positives if you hold but if not just wait a little longer before the GM next month. Can I ask how you intend reinvesting the cash if you do? Which other company? Fully understand if you choose to ignore.