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"Govt failed to follow its own guidance re a pandemic"
Poor governance
"Lloyds is not without some expertise in this field"
It has recently employed a handful of people with letting experience. It has no previous.
"Does it keep spending it on buybacks? extra dividends or expanding its businesses portfolio?"
Id choose the first and last, others here would like all three.
"how much gorilla glue you use"
where?
"Trouble with this country no can do mentality."
Best to thoroughly understand the problem before you embark on a solution. Ambition with no evaluation is a risk. Poor governance of new undertakings is a major risk. All these things were demonstrated in the UK's can do response to the pandemic.
T
"buying Graingers management team and experience"
They would get the staff who decide to be TUPE'd across to LBG. You would lose anyone who opted for early retirement or managed to get a more senior job elsewhere in the sector. Its a competitive sector and if staff aren't confident in their employers competence they will leave.
LBG don't have a spotless record of putting customers first. CITRA don't seem to me to present that well yet. People move house more often than they change bank accounts, so it would be a mistake to assume customer or staff loyalty. Let's wait and see how they manage to resolve new build snag lists, operate lettings, collect rent and organise repairs in their first 1000 units.
I support the venture but am aware it comes with many risks; one of them is overconfidence.
T
"I would have liked them to have looked at a takeover of say Grainger to accelerate their plans"
Planning to expand a portfolio twelvefold before demonstrating competence as a landlord for more than eighteen months is a slightly arrogant target from LBG. I don't believe they could do this without purchasing another company. It would put the wind up me if I was a Grainger tenant and was suddenly told LBG was taking over.
"What is not too like?"
For me, not much except corporate landlord inexperience coupled with very big expansion plans between 22 and 25.
It is a fair degree of risk but also a fair degree of possible success - if they perform good property management.
And if they make sure their tenants get targeted with other LBG products or preferential offers.
first posted 5/11
• 7/21 Established to “improve access to good quality and sustainable rental housing” in the context of an emerging “Suburban Build to Rent market”.
• 8/21 Announces strategic partnership with Barrett “to work together on a site-by-site basis to develop incremental housing stock for the rental market, with a focus on the environmental standards of properties”.
• 9/21 Announces £300M fund with Homes England.
• Citra Living will complete initial purchases but hopes to build the bulk of its portfolio through partnerships to develop new sites from scratch.
• 12/21 initial budget of £250M rumoured to be increased to £1B
• aim for 400 units owned and let by end of 2021
• aim for 800 units owned and let by end of 2022
• aim for 10,000 units owned and let by end of 2025
• aim for 50,00 units owned and let by end of 2030 *(Equivalent to about 1% of UK’s rental housing stock).
• The 4.4m households in England’s private rented sector are owned by 2.3m landlords
• Operators talk of 10,000 units being the level at which economies of scale kick in, but no private landlords have yet attained that in the UK.
• Grainger is currently the largest UK private landlord with 9,100 units worth approximately £2.1B
• Clarion is the largest UK Housing Association with 125,000 units and plans to increase by 50,000 units in the next ten years.
Reported CITRA Purchases:
• Nene Wharf, Flettons Quay, Peterborough 45 units completed by GRE - let
• Riverside Park, Ashford, Kent 110 units completed by GRE - let
• Ladden Garden Village, Bristol 150 units planned - Barratt 22/23
• Cramlington, Newcastle 58 units completed – let
• Wixams, Bedfordshire 66 units planned - Barratt 23/24
Annual Review 2021 – “Citra Living will form part of Lloyd’s approach to the decarbonisation of housing, focusing on buying and renting energy efficient properties, helping to reduce the environmental impact of the UK’s housing stock and contributing to the UK’s overall net zero goals. The Board was pleased that Citra Living was able to build on the Group’s existing support for the housing market, while also contributing to the Group’s environmental ambitions”.
My view is there must be an under reporting of purchases, or, for whatever reasons, they are not committing to the early level of expansion as originally expected.
lloyds capital in citra will help bring forward new housing starts, so they will add to the much needed supply for working people.
It has no social housing aspirations and it certainly wont buy foreclosures on existing properties, usually referred to as repossessions.
It has made a modest start and has a few units already tenanted.
mach
Interesting picture, it's not the most relaxed handshake between Liz and Fumio is it?
Both appear to be concentrating doggedly on the camera.
I guess thats a clue to the real value of the trade agreement.
hu
That comment was in relation to buybacks.
"the dividend should rise at least in line with earnings per share. So higher earnings should equate to higher dividend"
Yes I agree. The div was rebased though, so we have yet to find out how much the prog div going forward will reflect this or not.
" I would also expect a dividend increase which reflects the reduced number of shares"
Higher earnings per share, yes, but not necessarily a higher div. paid.
LLOY signalled clearly they would prioritise a progressive div going fwd while retaining cash to grow the business and reduce share count.
Gaz
I can hear your frustration but saying "Who is better at using my share of the company profits - Lloyds or me - I will give you a clue, it isn't Lloyds" suggests you can make better decisions than BoD.
We don't get to decide how much is "our share of the profits".
The BoD make decisions on level of div payments based on what they believe is best for the company's future.
"Aim to buyback 1.5 times as many new shares are issued every year"
I like that and agree re. prog dividend. But specials would make it a lot harder to invest to become the nations biggest landlord / the platform that knocks HL off its perch / succeed in attracting rich peoples retirement investments.
My fear is if they payed it all out in div every year, unless we suddenly saw mind blowing profits then it will stay in this price range forever. They already have the biggest share of the mortgage market, but if they don't develop anything else, I would be concerned it may not turn out so well for them in the long term. And we might all still be here, hoping for 50p by Friday.
"Gazzleberry is on a different time scale, he wants the wonga now."
Yes I get that, LLOY must have been a nightmare for any who hold in retirement with div cancellations.
But do you want an investment where the number of shares increases every year while it pays out all its profits? Or one that pays out less but invests in future growth and diversification?
These are my reasons for holding. I wonder what peoples reasons are for not selling, when LLOY doesn't appear to be giving them the income they need right now.
"The market decides the price, not buybacks"
Yes, this is true.
I was merely suggesting that "Fewer shares and an increasing dividend has to be a good medium term prospect" while acknowledging many prefer all the cash right now.
"Medium term" - I wasn't expecting it to happen overnight.