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Yes but did they save for a rainy day ? Covid will have cost the wife 50k over the two years we might struggle to remortgage in the future as it’s based on wages , I’m on less due to being bumped out of my job, But I piled in when the times was good and have a buffer and haven’t splashed out thousands on holidays or flash cars clothes, yet you see some on the telly and they have a 50 inch telly ; sky , iPhones flash clothes and moan about state aid , yes not all are like this but surprisingly there’s quite a few. , heck I remember watching one interview she had a half pint in her hand!?
There are many people,myself included who have a decent holding and will receive a good dividend.Spare a thought for those who have lost their jobs and in some cases their homes and those who have no means to pay their rent,i know a few.
Be thankful we are not in that position
Sorry 4% from tesco I meant
True but interesting nonetheless, shows that real interest rates just now are negative, hence keeping cash in the bank is not the best. Financial repression. Good driver as a stock market driver, 4% from bank loans and dirt cheap loans for the masses...
Or possibly lse rules etc ,( heck I may be on a yellow card )but on my break at work I thought I’d look in and lo and behold a few posts have been removed and not just mine , so may of overstepped the mark with the idiot comment. But I’ll have to keep the points rumble to myself but it was a cracker,
Hold now for me what’s left so close to the SD ,
It will be interesting to see what Tesco put on the pay deal that comes round this year now Morrison’s have pledged £10 an hour nice to see them looking after there staff.
It was 3.4 percent so actually pretty good.
Although absolutely irrelevant .
The thing is pothouse what was inflation back then? If you have a savings rate of 6% and inflation running at 5%, the real return is just 1%.. Adjusted cash rates are never that good...
In 1998 I had a Tesco savings account that paid 6.7%. That’s a dream come true in these uncertain times.
Rosewall
Only echo your thoughts. True value would then be determined after several weeks in regard to the sp. It is clear there will be some volatility in the short-term after the GM.
Enjoy your weekend
I am happy with the special dividend and ambivalent about the consolidation. I would prefer to see them actioned separately rather than causing confusion
George
Same pattern now for the last couple of weeks. Maybe accounts for all these algo trades putting the brakes on the sp in order for the larger institutional trades.
The pattern will change of course. Expect it go higher when they are fully loaded. May even get a holdings RNS at some point.
Just my opinion of course.
Big after bell buy ??? Any thoughts?
'that the company is not a viable business if they have debt......
Spindler
I know this wont sit right with many private investors as they see debt as a reflection of the company not being viable without it. Debt is reduces your tax liability. It also builds your business credit.
Following link may help too. I think paying into the pension with the proceeds of the sale was good but if I am honest I am undecided and not knowledgeable enough to understand the full rationale of returning money to shareholders by way of a SD. It can help institutions and their pension liabilities but I cannot see the BoDs not taking advice from the city.
https://www.montrealfinancial.ca/blog/7-reasons-why-debt-is-good-for-your-business.html
A reduction in the pension liabilities due to circa 15% more deaths in 2020 than was previously factored into pension liability calculations. More excess deaths into 2021. Some of these excess deaths will be drawing on defined benefit schemes, some of these will be Tesco.
And Barclays forecasting 2.90
So like you say, the board have done as they see fit, they do not believe the current debt levels too high i presume.
Regarding debt-
Say your Return on investment = X%
Say your Cost of debt (interest) = y%
if x>y then makes sense to have debt
But a company always have to pay interest on the debt, so it then becomes down the risk the company accept. If you have a bad few months you don't want to have too much debt so that you can't pay back your interest and risk insolvency.
JPMORGAN TESCO OVERWEIGHT Target 300p
Meant to add because surely that would take debt liability off the books and add to the robustness of the business. Would probably have boosted the share price as well to the benefits of the share holders
At the end of the day the board of Tesco are going to do what they see fit, regardless of all the musings on here. I do have a question just for my own interest if someone thinks they can answer ? Why do they not use the proceeds from the Asia Businesses sale to pay off debt ?
haha!
@ longtimeinvestor. I don't know exactly what are you referring to, the sale of the business will be a business disposal. This will be treated differently from normal operational profits, but how it’s treated is done by Tesco and does not affect your tax situation as a shareholder.
Tesco have decided to return this to shareholders, which they have chosen to do through a dividend and for which dividend tax applies to you, not income tax.
Chris idea makes no sense. The facts is Tesco now has more cash than they need or can invest in. This should be returned to shareholders who can invest it elsewhere to put it to better use than doing nothing but sitting in Tescos bank account. I do not see how Chris’s idea addresses this at all.
They could do a share buy back which returns cash indirectly, although buying back a quarter of your market cap will probably inflate the price too high temporarily while the buy back in progress (too many buyers not enough sellers). Once its above its real price (whatever that may be) the company is paying too much for the shares, and shareholders would be better off having the dividend.
No he's not.
He's one of the delivery drivers!
Lol
Are you a tax accountant?
Thank you for your response and views on the matter leas, and sorry it took so long to acknowledge.
Like Lynny said, I think you summarised it up perfectly. I wasn't expecting a massive rise, but an increase on such an important day would've been nice all the same. They are a sound investment though, been involved for some time as their dividend payments are reliable and consistent usually and the SP range is typically predictable as well.
I have a feeling that the weight of this special dividend is stopping the SP from moving up further, though, and as we don't yet know the terms of the consolidation, that causes further uncertainty. Just my thoughts and opinions, dyor everyone. It's getting frustrating seeing the same questions asked over and over when the answers are in the RNS's.