Member Info for badjob

It certainly has been on a down trend but, based on performance, I don't fully understand why the share price is now so much lower than it was during the periods of PPI payouts given that Lloyds now has the firepower to implement a £2bn share buy-back plus dividends. I can only think it is down to the huge political risk that hangs over this sector and the fact that there will likely be irresistible pressure for windfall taxes if banks are seen to be making big pay outs to shareholders. There must be a reason why NWG, despite the overhang of government ownership, trades at a significantly higher PE to Lloyds but i don't know what it is. I think Barclays might be a better bet overall because it makes a lot of its profit in the US where the political risk to banks is probably lower.

Good luck - I think you'll probably do ok with that. Sentiment seems to be extremely bullish or extremely negative with this share. On the assumption logistics difficulties will pass and the company can continue to grow sales which I think is more likely than not, the current prospective PE based on projected earnings is around 20 which seems low for a growth share. Obviously much can go wrong as with any share but I'm feeling positive at these levels.

Will be a big surprise if new CEO does not announce this if the share price doesn't start to recover. Undertandable negative sentiment at the moment in a company so tied to the economy but i think it will turn - just a question of when in my mind. i think that when it does re-rate, it could move quite quickly which is why I'm staying in. A company which was able to survive handing out £20bn of PPI cash should have something decent for shareholders before too long.

Agreed. Osborne removed the dividend tax credit because he said it couldn't be justified with the lower rates of corporation tax. Now Sunak has shoved up corporation tax and dividend tax to the extent that a higher rate (not top rate) taxpayer is paying over 50% on earnings above £50k. Quite a low threshold for that level of tax. Wouldn't be surprised, with more people working from home, if this doesn't just increase the incentives on companies to offshore more and more services. Certainly don't see it attracting new businesses to the UK. 15.05% employers NIC is pretty high.

Quite - seems like madness. Not their area of expertise and even at £200k a pop this would be a £10bn investment. Not a hit to profits as such but certainly will need a big chunk of otherwise free cashflow that might have funded a dividend.

I think sales and turnover going very well but the huge increases in costs and their effect on margins are preventing equivalent increases in profits and that is holding the price back as shares are already trading on a sky high multiple. i think shares will move upwards again as this is undoubtedly a quality company, but only when the cost pressures begin to abate. Hopefully there will be some evidence of that by year end.

Interesting to hear as a couple of weeks ago I was buying a few things in store and at the check out, one of them didn't scan and so i was told I couldn't have it - apparently it was not properly keyed into the system. They then removed all of that product from the store as every single item was affected by the same issue. Not particularly impressive but on the positive side, thought they were selling some good stuff.

I think we are already seeing some reflection of this as Barclays has already reached its pre-covid levels whereas Lloyds and Natwest are still substantially down on their pre-covid position which suggests they are the preferred play in the sector. I think when sentiment towards the sector improves generally, as it hopefully will if covid risk recedes, Barclays will be best placed to benefit from it. I'm staying long.

Isn't it the same landlord at White Rose? Sounds like a revamp of the site with M&S the main anchor tenant and hopefully a win win for M&S and the landlord.

What I'm not so keen on are the £1.2bn plus retail park sales at yields of 7.5-8% to private equity. Massive amount of rent gone from the one retail class that has held up well in the pandemic. I appreciate the panic to reduce debt but this is a massive hit to profitability going forward. I hope they know what they're doing. Government rent moratorium has clearly put them under enormous pressure and appalling to extend it until March next year. Obviously government don't care if Hammerson go bust as there will be a vulture fund somewhere to buy it up on the cheap. Not even handed.

Agreed FortunateSon. If the board believes the shares are materially undervalued, it makes sense to buy them back. Whilst buy-backs have not previously resulted in any price gains in the shares generally, I think this reflects the fact that the market is still quite negative on bank shares. Hopefully, if the sector re-rates, there will be some clear benefits from the buy-back. Of course if there isn't a re-rating and sentiment remains depressed, there will be no benefit. Personally, I think that as and when there is more confidence that covid is no longer a major threat to the economy and there is clarity around provisions/covid losses, we will see that re-rating.

Quite. The bonuses don’t seem to suffer from any need for prudence - just the poor shareholders who haven’t even been given the previously declared but cancelled dividend. Stripping out impairments, the profit seems slightly less than the first half last year but cost income ratio up from 57% to 64%. Says it all really. I’m not sure the share buy-back will do much more than stop the issued capital actually increasing with bonuses etc. Hope there will be a re-rating but can’t immediately see the catalyst for it.

Good luck with that. I'm a bit surprised this isn't doing a bit better given success of Ocado tie up and pent up demand etc. I suppose the absence of dividends and the market perhaps waiting for a bit more evidence that a real recovery is on the cards here means there is no immediate catalyst for a move up. Having said that, i prefer to be in now because I think this will re-rate at some point over the next six months or so and I don't want to miss it.

There has been a big decrease in net assets but that is technical issue rather than a reflection of underlying performance. It is largely due to a decrease in the net retirement benefit surplus rather than anything intrinsic to the business. On the positive side, net debt is down (with or without lease liabilities) and free cash flow of over £295m is pretty healthy and up on previous year despite covid. The business certainly has challenges and has underperformed in the past but Ocado looks like a fantastic deal with a £78m contribution to profits which i don't think is yet reflected in the valuation. There are always negatives but for me, the positive case is more compelling right now.

I think these will come good but the timing is a tricky one. I suspect any material move up will probably depend on dividend restrictions being lifted. When that happens I think bank shares could re-rate quite significantly and I think it might be better to be in early than leave it too late. Also, with the economy looking on an upward curve, I don't think holding these is too risky at the moment. Good luck.

I don't find the analysis particularly easy to follow but I'm assuming the concern is that current investment bank performance is not sustainable long term and the core retail business has contracted and therefore future quarters profits will be much lower. If the bank was able to repeat these kinds of figures throughout the year it would be on a PE of under 5. I've added because I see this as recovering the lost ground plus some more - hope I'm right!

Expected PBT £150m - profits after tax £120m? That would put it on a PE of around 13 so not obviously cheap. Enough to make me hold onto what i have but i don't plan to add. Are we expecting major profit increases in future years? Decision to close airport trade could be very short sighted - £20m of potential profit is a lot to throw away. i wonder what it is costing to close the operation compared to subsidising it for a couple of years or so. I read somewhere that WH Smith are increasing investment in airports to take advantage of opportunities ahead as others pull out. Are we really expecting covid travel dip to last forever?

I think the buybacks have a value to the extent they buy in shares equivalent to those given out in bonuses to stop the share capital increasing. As an investment bank as well as retail, Barclays has to issue a lot of new shares to meet staff bonuses. The bonus shares issued are deductible in computing the bank's profits just like an equivalent cash payment and so the buy in really just makes the bonus shares the equivalent of a cash bonus and is sensible. Anything above that, i would prefer a divi. I don't like the attempt to dress it up as some kind of return to shareholders though when it is nothing of the kind.

Gusto - Nothing has fundamentally changed over the last few days. We are, hopefully, closer to shops re-opening and I take the more optimistic view that things will get more back to normal than many currently expect. if so, this share has enormous upside. Of course there is downside risk but even last year, interest cover was 1.8 times and next year it should be far healthier. It is not inconceivable that the next valuation of the portfolio will be positive rather than negative. The BOE are talking about a massive splurge of spending as lockdown eases and Hammerson is potentially in the middle of that. For me, more reasons to be positive than negative. Goldman are far too gloomy in my view and are pricing a far higher risk of total shareholder wipe out than i think is justified.

I really hope you're right. I agree that revenue has held up very well given covid but the reduction in margin is big and they seem to be expecting that to continue which i think may explain the negative reaction to the results. I do think there is a chance of a surprise to the upside when things re-open as the hit to hospitality has been staggering.