Member Info for Asperger1

MrBubbles,

I guess your referring to this statement from George Culmer, page 10, YE results 2017
https://www.lloydsbankinggroup.com/globalassets/documents/investors/2017/2017_lbg_fy_results_transcript.pdf

Question
And just following on, buy-back versus special dividend. The rationale there
Answer: George Culmer
You squeezed that one in. Look you know previously we weren’t 100 per cent privately owned, the numbers were smaller etc. The ordinary dividend was smaller. So I think special as a supplement suited that time. Now we are fully privately owned, the ordinary dividend is at a more significant normalised level, it doesn’t need the buttress of a special dividend alongside it. So we think a buy-back is more appropriate to where we are now and just brings a bit more flexibility as well

Personally I think George was talking about that point in time, not necessary forever. it's my understanding the board will make decisions of buybacks v divi's with each YE results

#Buyback those dips UBS
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Many thanks to all who today helped reduce the number of shares in issue by 5m

#Buyback those dips UBS
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There's been a sudden drop in my 'This message has been filtered, please adjust your filters to view' notifications

#Buyback those dips UBS
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Uphigher - do you also have a prediction for Barc & RBS for Thurs?

#Buyback those dips UBS
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Poolielad -
They are not 'some sort of special share', the ordinary shares are bought back from the market by UBS, UBS buys the shares on behalf of Lloy at what ever the market price is, once the shares are bought back they are cancelled (that is why the 'shares in issue' count is reducing),

I see no reason to associate the SP drop with the buyback program
Barc & RBS also fell today and they are not buying back, the drop in the banking sector is due to Brexit fear, it's a reasonable argument that the share price drop would be greater if it was not for the buyback program,

#Buyback those dips UBS
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Onestep - it would be very expensive for that company to buy back all but 1 share, eg the last but 1 share would be worth 50% of the company, if your friend owns the 1 remaining share than he owns the company valued at £100k, lucky guy.

#Buyback those dips UBS
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Onestep - Barc, RBS and Lloy are all trading on a low P/E compared to market norm, the Brexit risk has been accounted for, if/when that risk subsides the SP will adjust upward taking in to account the lower number of shares in issue - simples

Add to that -
End of past conduct provisions
Lower overheads/greater efficiency
Competitive advantage organic sector growth
Interest rate rises
Further acquisitions?
OMG

#Buyback those dips UBS
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Onestep - but in your example you view the companies value only in terms of its cold assets - where in the real world a company's value is based on its earning capability

In my example of only 1 share, the earning capability remains the same, therefore that 1 remaining share now has the value of those earning, eg £100k

Again - thank you for helping to perpetuate talk of buybacks - even if it is just a wind up ;-)

#Buyback those dips UBS
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My usual weekend update,
I started this fantasy portfolio in 2016 to challenge various posters perception that Lloy is 'the worst share ever' or a 'dog of a share', on the 8th Oct 2016 I invited WL/Newchurch to choose an alternative ftse 100 company so I could run a comparison

On 8th Oct 2016 - 1000 quid bought 206 BP. shares & 1905 Lloy shares
Today's value
BP. 206 @ 556 = 1145
Lloy 1905 @ 61.9 = 1179

In April 2017 Invest4life suggested I add Glencore -
On 22-4-17 - 1000 quid bought 335 Glen shares & 1553 Lloy shares
Today's value
Glen 335 @ 321 = 1075
Lloy 1553 @ 61.9 = 961

In May 2017 Pugsy suggested I add Ocado -
On 22-5-17 - 1000 quid bought 331 Ocdo shares & 1392 Lloy shares
Today's value
Ocdo 331 @ 1045 = 3459
Lloy 1392 @ 61.9 = 862

In July 2017 Nucky suggested I add RBS -
On 12-7-17 1000 quid bought 384 RBS & 1512 Lloy
Today's value
RBS 384 @ 248 = 952
Lloy 1512 @ 61.9 = 936

In July 2017 Utrickytrees asked that I add BARC -
On 30-7-17 1000 quid bought 479 Barc & 1504 Lloy
Today's value
Barc 479 @ 188 = 900
Lloy 1504 @ 61.9 = 931

This weeks observation - OMG wish I'd bought Ocdo, little movement overall, banks still mostly neck & neck,

Overall conclusion -
A very basic comparison that does no include divi yield, IMO anyone still suggesting Lloy is 'the worst share ever' or a 'dog of a share' seriously need to examine their concept of investing.

#Buyback those dips UBS but Shhh, don't tell the algo's
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Onestep - thank you for perpetuating this thread regarding buybacks - a welcome break from brexit jibba jabba

So, the company is valued on a P/E of its earnings ie £100k with 100k shares @£1 each,
Suppose from surplus profits the company buys back 99,999 shares, so now there is only 1 share, what price would you place on that one remaining share in a company that is valued at £100k based on it's earnings

#Buyback those dips UBS
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Onestep - the company did not spend or give away the 10k ie loose the value of that 10k - the company invested that 10k in its self buying its own shares - therefore increasing the value of each remaining share - I presume you are just having a laugh trying to wind me up :-)

#Buyback those dips UBS
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Many thanks to all who today helped reduce the number of shares in issue by 4.9m

#Buyback those dips UBS
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Onestep,
Hmmm - so your trying to tell me when the company makes £10k in the 2nd year with issue of 90k shares the SP should be exactly the same as the previous year with 100k shares - oh deary me - sounds like there's no point investing and people should sell up, every buyback needs a seller :-)

#Buyback those dips UBS
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#Buyback those dips UBS
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One step - and if you project your example to the following year - the company makes another £10,000 surplus profit, but now only 90,000 shares in circulation - how would the value the company now?

#Buyback those dips UBS
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~ £230m in the buyback pot, ~ 115 trading days till full year results
= ~ £2m buyback per day or ~ 3m shares per day

#Buyback those dips UBS
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Many thanks to all who took part in today's 2.8m buyback

#Buyback those dips
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Trust UBS will be hoovering up at this cheap SP

#Buyback those dips UBS
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Research from Lloyds Bank Commercial Banking has shown that business confidence in London increased in July, rising by 7 points to 47% after dipping in June.

The bank’s latest Business Barometer, which surveys 1,300 businesses each month and explores economic trends regionally and nationwide, found that businesses were feeling confident about their prospects and the wider economy.
Increase

Confidence among London firms about their business prospects increased by 5 points to 54%, while optimism over the wider economy reached 39%, up by 8 points from June. This was higher than the UK’s overall confidence over business prospects and the economy, which stood at 34% and 25% respectively.

The boost in confidence is set to lead to an increase in hiring activity, with 59% of London businesses planning to recruit more staff over the next 12 months, up by 11 points from the previous month. Business confidence across the UK as a whole reached 30%, up by 1 point from June.

London businesses were also found to still be feeling positive about Brexit, with 21% saying that they feel that it will have a positive impact on their expectations for business activity, the same percentage as in last month’s Business Barometer.

https://www.lsbf.org.uk/blog/news/business-economy/lloyds-bank-barometer-shows-rise-london-business-confidence/117121

#Buyback those dips UBS
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Former owner of womenswear fashion brands Jaeger and Aquascutum Harold Tillman is holding talks with Lloyds Bank to resolve a six-year war of words over who is to blame for the collapse of his fashion empire, The Times has reported.

Tillman has accused Lloyds of driving Jaegar and Aquascutum into the ground, but to prevent a costly legal battle he has agreed to a three-month stay on proceedings he launched in May.

https://www.drapersonline.com/news/tillman-in-talks-with-lloyds-bank/7031547.article

#Buyback those dips UBS
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Is the Lloyds Banking Group PLC share price set for further falls?

Lloyds is a relatively strong business. Sure, it may lack the diversity of some of its sector peers. But it is one of the most efficient banks in the FTSE 100, and this suggests that its strategy is performing well. Additional cost reductions could boost its financial performance yet further, with its balance sheet also improving in strength after what has been a difficult period for the UK banking sector.

The bank could also become increasingly appealing to investors as a result of its income investing potential. It has a dividend yield above 5%, and with EPS growth set to remain positive next year it could pay out a higher dividend over the medium term. This could provide investors with increased confidence in the bank’s prospects, while also boosting its total return potential.

In the short run, though, I think the Lloyds share price could experience a difficult period. The company’s exposure to the UK economy means that Brexit could impact on it more than many of its sector peers. But in the long run, its low valuation, high yield and what seems to be a sound strategy could lead to impressive total returns

https://investomania.co.uk/2018/08/is-the-lloyds-banking-group-plc-share-price-set-for-further-falls/

#Buyback those dips UBS
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