The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
I'm almost tempted to tender 100 shares just to see the associated divi not arrive and take the ~£50 hit on 28 March, then no one can argue any more.
There's $42m being paid out, take your divi OR sell your shares, the choice is yours!
Maybe GG was right about some of the posters here....
Just checked,
Divi paid on 28 March, anticipated share purchase 27 March. So those who believe they'll be paid twice will be disappointed on 28 March.
"Following the announcement on 15 November 2023 of the interim dividend for the three-month period ended 30 September 2023 (the "Third Quarter Dividend"), the Company is offering shareholders with an opportunity to elect how they will receive the return of capital of approximately US$42 million, in aggregate (the "Return of Capital"). The Company will return the same amount of the previously declared Third Quarter Dividend, but shareholders will be offered the optionality as to how they receive that payment."
Question - when is $42m not $42m?
Answer - when some people ignore what the RNS states and think it's more!
"This helps to clarify the 40% or 30% FCF assumption from the analysts. "
2023 divi is not 30% or 40% but will be ~100% FCF. If 2024 divi is maintained at current level I believe it will be >100% FCF, unless there are significant acquisitions announced very soon.
I guess institutional investors pay 30% WHT so a SP drop of ~5% on ex-divi day is more appropriate than ~7%.
Hopefully will recover back to ~£10 or more within a week or two, with a gradual rise to where it should be over the coming months, ~£15 to £20 !
I should add that a UK broker will sell you London shares if they have a listing in London. If it's dual listed on a foreign exchange I doubt mainstream UK brokers will they will give you the option of buying the foreign listing, but if you really want them you could ask or maybe go to a non-mainstream broker?
If London market is closed when you place your order with a UK broker and you've missed the closing auction I believe they will try to execute it at the pre-market auction the following day. The closing price is not really that relevant. Tomorrow's market may open higher, or lower.
https://www.londonstockexchange.com/discover/news-and-insights/what-auction
"The total paid out by DEC will be $42m in some combination of cash dividend / capital return, with X number of shares being purchased and cancelled."
I think that's the clearest explanation it's possible to give TheWednesday. There is $42m and that's it, not a dollar more, take your divi or sell your shares, or do a bit of each.
"Totally wrong unless you use a percentage of shares to receive the divi as normal and the rest for the tender offer. If you go for the full divi there’s no cash option"
I tried explaining this to Coaj last week but he refuses to believe it.
Not meaning to be rude Coaj, but I read and re-read the RNS 3 times before it completely sank in that DEC were really just offering charitable institutional shareholders the opportunity to lighten DEC's divi liability. Nobody spelled it out quite so plainly to me as I have to you tonight. If this is beyond your comprehension maybe you should consider investing in fully managed investment vehicles instead of individual shares.
"My understanding of this DEC statement is perfectly clear to me.
"This Return of Capital allows shareholders to be paid the same total amount of the previously declared Third Quarter Dividend"
True. So why in your example do you think you will be paid double if it's the same? $42m is $42m. It's not going to increase.
Coaj
I'm not sure you understand. You don't get paid twice. You forgo any payment that you would have received from the divi and just get paid for the shares you sell, at a 5% premium over the average SP for the stated period.
"A tender offer is something I've never encountered before, so if I accept the offer what can I expect to receive & be left with ?"
Most probably a similar amount of cash as you'd have received from the divi but you'll own 7% less shares.
Corrected -
Machin
Am I missing something?
"Is it not DEC’s policy to keep the dividend as same level and eventually increase it?"
That would be nice. There dividend policy is to return (a minimum?) of% FCF to investors -
Machin
Am I missing something?
"Is it not DEC’s policy to keep the dividend as same level and eventually increase it?"
That would be nice. There dividend policy is to return (a minimum?) of% FCF to investors -
2021 - FCF $228m Divis paid $130M Divi % of FCF 57%
2022 - FCF $219m Divis paid $143M Divi % of FCF 65%
2023 - FCF $160 to $170m?? Divis paid ~ $168M Divi % of FCF ~ 100%?
2024 - I find it hard to see how FCF can keep up with Divi payments at current level of $168M. Even if DEC make some major acquisitions this year they'll be selling that extra production at a low price, it won't be hedged at ~ $ 3 like much of their existing production.
@ pardariff
"I would like to see a dividend declared for the whole financial year 24/25 because at present there seems to be an air of " too good to be true " about the dividend "
FY 2023 Divi cost ~ $168M
FY 2023 H1 FCF $80m, so if FY 2023 H2 FCF increases to $88m then FY2023 FCF more or less matches the divi so divi ~ 100% FCF (not 40% as the divi policy)
I believe DEC's FY2023 ave realised prices were ~ 3.5 $/Mcfe and FY2024 will be lower. They have also sold producing assets and there is obviously a production decline that needs to be made up by acquisitions, none have yet been announced.
Would you be declaring divi's for FY24/25 yet if you were running DEC?