Member Info for Beo1

Based on the theory that the SP reflects the discounted future cash flows. Which the SP never is, but i understand alot of broker models due rely on this quite heavily

Not really. The price theoretically has been re-set before now as we haven't been paying dividend for a number of years. The element that was not priced "accurately" was how much the dividend would be when it restarted. If we were operating at the same SP as when you took those dividend values then yes you could argue the drop post results was down to this factor. Not to mention the right issue since, means the rate was never going to be that

For my 2 pennies, the brokers / analysts have run through $19b of cash outflow through there DCF models and the rebase is due to this. But as they were pretty vague on how this will be financed I suspect the models would have crude assumptions of the timing of the cash outflows. All they would have seen is the free cash flow this year and previously won't continue due to the heavy capital replacement over the next x years and this would mean the free cash flow could be tight.

He also thinks a company should declare and pay the dividend immediately. Put on ignore list I would suggest.

Its a shame i wasn't as good as predicting the SP when I bought into VOD.

I'm going for a slight retrace this week to 76.1p

This management team steered the company through one of the worst crisis to hit the aviation industry (arguable whether this or 911 hadn't the bigger impact) and kept the company going and returned it to profitability. They have greater insight into the FCF of the business with plane purchases required and higher interest rates meaning that perhaps sale & leaseback might not be the best option this time and may choose a more cash outflow route, meaning they'd like to keep that cash balance for now. But because they potentially didn't choose the most IR friendly option this time around they are in a sorry state of affairs?

10% of PAT, being about £30m / market Cap of £3b = 1% on current SP

No its not what I am saying!

I'm correcting your poor articulation of the issue. You implied one thing but are now implying something else as you were wrong. But anyway for a company just back in profit, with potentially heavy cash outflows in way of planes, then yes a sensible approach to dividend management seems prudent. In the long run being sensible in there return to dividend payments as opposed to blowing all the cash then coming back to the market to ask for cash for planes will do the SP more good, IMO

Its not a promise down the line though, this was a trading update, the final results are due next month, the Dividend will be officially declared then, with the ex-Div date early 2024, and payment early 2024. This is a dividend for this years performance.

You do know they have offered a final dividend don't you? Not a lot aprox 1% yield but they said they will declare a dividentd on release of the final results of 10% of PAT

77.25p for me please

82.75 for me please

Give over. I work in finance and as such I view investments in a matter of fact way. We all want to improve ourselves financially and secure our retirement income. Otherwise why are you invested in shares, so don't act all holy than thou, just because your investment choice is somehow more morally ok than mine. I've made a decent return on my property investments as I said I'm renting in non affluent areas, eg those on social benefits who would never be looking to buy there own houses as their rent is subsidised if not fully funded by the state. Makes me laugh you call me out as greedy yet you chose a share with one of the highest did div yields and not so good SP, why is that? For the potential of higher rewards vs safer havens, what is that if not some level of greed?

So the figures i gave was to illustate the example using simple maths. double the value, half the yield. But yes the house i rent has gone from £70k to about £110k but i have had one person renting all that time in a non affluent area so i have only increased the rent once since i bought it, but still achieve the yield in excess of 7% so I'm happy, especially as my Return on Equity is much higher than that. But whenever I make financial appraisals on my investments its on my current value as its that current value that i can utilise in other ways, not the value when i first bought the asset.

Also for the other poster, you do get an annual capital gains allowance, and the house is in mine and my wifes name, so we get that x2

But then a business that was worth £20b, is worth some of that because of the cash reserves they have, if you spend £5b to buy back those shares then the company has £5b less in the bank, so can't still be worth £20b.

It gets murky though as then you will have another years of free cash flow building that bank balance back up etc

does porsche have anything good to say about any shares? seems to be on a couple of threads ****ging them off

One rule of thought is that the Current SP is the discounted value future cash flows derived from the business divided by the outstanding shares. So you take cash out of the business and at the same time the shares theoretically they cancel out. But, then the next year you discount the cash flows again and you have an additional out year to discount (eg Year 11 which was previously excluded) and you stop the buybacks, you discount cash flows are now higher (eg Year 0 = buybacks now, year 11 just replaces year 1) divided by the lower shares = higher share price. The oil in the works is that years 4+ on any cashflow model method are heavy in Earnings growth projections, and the theoretical year 11 might have different projections than the year 10 (that now becomes year 9) etc etc. Then you add in market news / market sentiment and then you never hit those theoretical moments anyway.

Have to agree to disagree. I rent out houses too and its similar to that. Why base my yield on the purchase price of £50k and delude myself I'm getting a good return when in essence the house is now worth £100k and my income has stayed the same, I'm now getting half the yield and its this lower Yield I would compare against to other forms of investment with regards how good it is. Any form of investment appraisal would look at the net realisable value now and compare that against alternatives. Don't get me wrong, in the case of analysing your overall return on a share you would your the purchase price and cum dividend's to work out your ROI, but in terms of go forward returns, no you shouldn't use an historical purchase price

Well you shouldn't appraise your financials using your purchase price. Should use current SP, what return can you get in comparison if you sold up today and invested elsewhere, not to then compare it against what you bought it at

You have to look at the US movement from UK close time, 11.34 to there close. As anything before 11.34 is reflected in the closing UK SP. And movement after isn't.

76p for me, think due bad news on economy forcing the SP back.