Paypoint Share Price (PAY)

Are you really that obtuse? I was referring specifically to the capital reorganisation and the issue of 12 new shares for every 13 original shares plus the return of cash to shareholders, as would have been abundantly clear to any "... ordinary man on the Clapham Omnibus ...".

The share buyback program is an entirely separate issue and was instigated before the capital reorganisation. The question of whether or not the company should be borrowing to buy back shares in the Market may raise many of the same issues but it is nevertheless distinct from the capital reorganisation. Share buybacks do not constitute a capital reorganisation. For the sake of the uninitiated or the deliberately obtuse: share buybacks don't necessitate the issue of a new class of ordinary share capital to replace the existing class of ordinary share capital.

PS. None of your "... 3 major things ..." have done diddly squat for the share price, if you hadn't noticed. It's financial window dressing that was consigned to the waste basket in the 2000s. Markets are now fully cognisant with management trying to manipulate their financial metrics (which often benefit the terms of their LTIPs) and look under the bonnet instead.

PPS. Font of all wisdom, have you got your head around your "... the dividend payment is linked to EPS not debt ..." gaff yet? You've actually leant support to my contention that the DPS could/should have risen c8% (based on the capital reorganisation alone), additional financing costs aside. I argued just based on affordability but the increase in EPS does me just as well.

The fact that they haven't increased the DPS in line with the increase in EPS actually begs the different question of whether or not the company could have afforded to continue to pay a dividend at the same level without the capital reorganisation i.e. without the c8% boost to EPS would the BoD have continued to consider the dividend cover sufficient to warrant paying the same DPS.

My argument has always been premised on the basis that the cash cost of the company's previous dividend payouts was sustainable and the company never gave any indication in the accounts that this wasn't the case. However, if you follow your statement to its logical conclusion then the increase in EPS that has occurred because of the capital reorganisation and share buybacks should have given rise to more than a nominal annual increase in the DPS and the fact that it hasn't could be interpreted as suggesting that the company was over distributing before and would have been obliged to cut the DPS otherwise.

I rest my case - "better to remain silent and be thought a fool than to speak and remove all doubt"

"The number of shares in issue has been reduced by about c8%"

Paypoint started the buyback on 72m Shares and have reduced the number of shares to 60.1m as per the most recent RNS which is currently a 16.53% reduction, not an 8% reduction. The buyback does 3 major things, especially in an undervalued asset. 1. Instant EPS Accretion, 2. High Return on Capital (ROI), 3. Long-Term Dividend Savings -which in turn feed back into retained cash and ability to pay debt down.

Please dont bother to reply. I wont be replying/reading your asinine posts.

You really couldn't make it up. The share price was already tanking before the trading update (it just tanked more after that) and what company chooses to proceed with a totally unnecessary capital reorganisation at a time when trading isn't going to plan. Were the BoD totally oblivious of the problems with the new InPost/Yodel contract in the months before the capital reorganisation? They shouldn't have been. Plus let's not forget about the Global 365 claim. The BoD might have considered the claim to be totally spurious but when faced with such a material liability if the claim succeeded it should have figured more prominently in the Chairman's and CEO's statements accompanying the financial statements (not stuffed away in the notes to the accounts with little or no explanation).

I would also suggest that you learn to read. The total dividend payout is by reference to the company not the individual shareholders. The number of shares in issue has been reduced by about c8%. By maintaining the previous dividend and only increasing it by a nominal annual amount (in accordance with the company's previous guidance before the capital reorganisation) the company has reduced the total dividend payout that it would have made if the share capital had not been reduced. I.e. the nominal annual increase aside, if the company was paying out, say, £100m in dividends before the reorganisation it is now paying out c£92m. It's a fairly simple concept; even you should be able to grasp it. What I'm saying is that if the company could afford to pay £100m of dividends from its annual profits before the capital reorganisation there's no reason to consider that it couldn't afford to pay £100m afterwards, additional financing costs aside, if, as the company maintained, this was surplus to business requirements. You could argue that the company has, effectively, opted to voluntarily pay its bankers rather than its shareholders; I personally don't believe that this is in the best interest of shareholders.

This type of capital reorganisation is simply an exercise in financial window dressing; they normally improve the prospective EPS, all other factors being equal, but little else. Often the only people who benefit from such schemes are the directors and their LTIPs.

Also, have to love your line "... the dividend payment is linked to EPS not debt ...". Did you really think that one up all by yourself? Think about it! You reduce the shares in issue by c8% which increases the EPS by c8%, financing costs aside. So, if you follow the logic of your statement, the DPS should surely rise by c8%. Make up your mind! LOL!

I'm all for returning surplus cash to shareholders (you don't invest in companies so that they can earn income from long-term cash deposits; individuals can generally generate higher net returns from depositing cash in their own names) but borrowing cash to return it to shareholders serves no purpose, given the inherent risks of the unknown.

As the old saying goes, better to remain silent and be thought a fool than to speak and remove all doubt as you have just done.

The share price didnt tank because of the consolidation, it tanked because the market/Quants/Shorts treated the news, which arrived AFTER the consolidation, that the £100m EBITDA target that Paypoint had been forcasting would not be hit, essentially as a profit warning. You can quite clearly see that the shorts pilled in after this announcement on the 20th November (the share consolidation was on the 20th October) and it was this that caused the share price to tank, not as you suggest the share price consolidation.

But hey, dont let the truth get in the way of what actually happened and some waffle about some underperforming piece of garbage you invested in that no one else is even remotely interested in. I would also point out that the dividend payment has been maintained and if you had reinvested your 50p consolidation dividend you would have stayed neutral and your dividend payment would have been the same. Also the dividend payment is linked to EPS not debt (unless its grossly high and at 1.44xEBITDA it isnt), and the ability to pay debt back is about EBITDA and cash flow/generation. Not as you are suggesting dividend payouts LOL!

I know who "has nae clue" and it isnt me.

Stoopid by name. Says it all.

The share price has tanked since the capital reduction. That's a fact. You can postulate all you like but the Market has spoken.

Borrowing money to pay for a capital reduction is an absolute no-no. Nobody can predict what's around the corner with 100% certainty. Been there before. Got the T-shirt to prove it. One of my shares has been in the doldrums for the best part of 20 years because it borrowed money to pay for a capital reduction at the wrong time (about six months before the 2008 financial crisis). It had to stop its dividend immediately and took the best part of a decade to pay off its outstanding debt (because of the knock on economic effect of the financial crisis to its profits) and restart the dividend. Meanwhile, the share price is still in the tank because every time it takes one step forward the worldwide economic woes (COVID, Ukraine, anemic economic growth, declining GDP per capita, the Middle East etc. etc.) intervene to haul it back. It's now profitable and currently has an 8.5% dividend yield but the market is still wary. So don't call my comment "utter garbage"; you have nae clue.

As regards the dividend, PAY could have maintained its total dividend payout whilst increasing the dividend per share by c8%. Instead it's chosen to reduce its total dividend payout. I.e. it's effectively using future dividends it might otherwise have paid to help repay the debt.

All in all, it was a pointless exercise which has only served to increase the EPS and, unlike you it would appear, the Market is fully cognisant of such crude attempts at financial engineering.