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The possibility of BT buying music magpie is alarming, the fact that they appear at board level to be contemplating it is terrifying! The scale of MM is minuscule, considering a bid will waste time better devoted to almost any other of the issues the board needs to address. I have been buying here lately in the sub 120 area with the expectation that medium-term BT's prospects are improving. If this latest folly is indicative of the board's competence, I am going to have a serious rethink. I'm sure there have been worse ideas floated by major companies but at the mo. I can't think of any

WTF

Big article in the ST over the weekend, marking TE's scorecard broadly positive BUT, there was a hint that he might be planning to dispose of the SMR business. Too speculative, too far in the future, he is an accountant and his plans are purely to drive revenues in the short term.

From the weekend's press.

It looks as though the Boots Walgreen buyout deal will net LGEN in the vicinity of £1bill to take responsibility for a PF which is £63 million in CREDIT at current valuation. I'm struggling to see how this can be anything other than a significant positive for LGEN

The deal is a prerequisite for Walgreens to sell Boots which they paid the equivalent of ~£6bill for in 2014. deal which in retrospect was a stinker. They are currently seeking to unload Boots at a loss of £0.5bill having hawked it around the markets for a couple of years. I suspect with Walgreens as a forced seller LGEN will be getting a good deal in taking on the Boots PF . It fits well with LGEN's current strategy to bulk up its operations in this area. I foresee plenty more similar deals in the next 2/3 years, the recent bounce in gilt yields has made many previously borderline insolvent PF's viable again and companies are queueing up to unload while they can. This is good business for LGEN which I hold and am adding on drops.

Https://www.londonstockexchange.com/news-article/OCDO/ocado-announces-deal-with-mckesson-canada/16211648

this is the RNS and the REALLY significant thing is that McKesson is NOT a grocery retailer, they are a pharma distributor. This opens up the possibility (probability?) of OCDO's technology being used by lots of other companies with goods to distribute. This is IMV a VERY significant development.

Prime time...they've got little choice. One of the many reasons for the long slow drift of the FTSE is that regulators are forcing pension funds (who are among the biggest holders of assets) to shun the risks of stocks and invest in other more stable assets. this has been catastrophically overdone, and the evidence is clear. In most countries where pension funds have more freedom to operate (i.e. Australia and Canada), they have done much better than the UK.

In my working life, the plethora of regulatory authorities was the biggest single barrier to progress, nothing seems to have changed.

Today's news that CPI is down to 4.6% is a further boost to the BT pension funds' long-term viability. It must be assumed that, like me, they have been buying bonds with yields at or above that level. As I have said before on various boards, holding bonds will pay off as/ when inflation and interest rates start to fall, as they certainly will in the future, maybe not immediately but eventually. While the recorded impact on The BTPF will take some time to emerge., it is clear that the problem that has dogged the BT SP for many years is, finally, going away.

As ever the market will take its time to reflect that in the SP, BUT, as one who normally never predicts SPs here's my take. The BT SP WILL be higher over the next couple of years, I will hold, take the divis, and wait.

Https://www.londonstockexchange.com/news-article/BT.A/bt-group-announces-triennial-pension-valuation/16207910

this time?

Londonstockexchange.com/news-article/BT.A/bt-group-announces-triennial-pension-valuation/16207910

link didn't seem to work in prev post

See

s://www.londonstockexchange.com/news-article/BT.A/bt-group-announces-triennial-pension-valuation/16207910

main points :

Deficit is down from £7.98 bill to £ 3.70 bill

payment schedule remains as agreed

life expectancy levels have dropped slightly

slightly disappointed to see that the extreme caution applied means BTPF is still assumed to not be in balance until 2030, I am pretty sure that if, as they should, BTPF move most of the cash to gilts at current high IR's the fund will be in balance long before that. There is currently a window that may close as IR 's fall .

Effect on SP _ who knows? should IMV be marginally positive tho' less than I had hoped .

Remember this is only an extension of previously announced Gov policy and IMV an incoming Labour gov. would do very little in the first year as they assess their options. That means that expensing is likely to run at least to the 2025 budget and probably longer. If possible BT should accelerate the rollout of fibre to get as much expenditure as possible in the next 2/3 FY's . There are 28mill households in the UK, and Openreach target of 25 million is almost 90%. The last 10% are likely to be non -profitable because of remoteness and/or low density.

The weekend business news is suggesting that the Chancellor will extend the provisions for expensing business investment for tax relief for at least a further year beyond the present limit of 2026.

see this from Openreach:

We’re committed to building the best digital future for the UK, so we’ve announced an ambitious plan to deliver Ultrafast full Fibre Broadband to 25 million homes and businesses by December 2026, if the right investment conditions are in place.

and note the last eight words!!!

If the Autumn statement does extend expensing then the benefit to BT over the next few years will be significant , from the latest AR Openreach spent £2.5 bill in the year to MAR 23, obviously not all of that expense will qualify BUT a very large chunk, must. Thus, over the next 3/4 years BT's notional tax deduction may well be reduced significantly .

A wet finger in the air: say £1bill (of total exp) pa X 25% for four years =£1bill which will drop through to the bottom line. Given that BT made just shy of £2bill last year, that's equivalent to an uplift of 12% Pa over the period.

Note, all source figures are from the latest AR all the rest is my very approximate speculation, and as ever I welcome constructive criticism.

An interesting snippet in the news today - Booths the upmarket norther based supermarket is to scrap all self service tills , allegedly in response to " customer feedback". I happen to have contact in one of their suppliers who told me recently that this was planned and the REAL reason is an explosion in theft. People using the tills passing low-value items through in place of higher-value items. I suspect that the staff cost savings from self-service will be if they aren't already swamped by " revenue loss due to theft. Relevance here? well if supermarkets have to add back staff to the checkouts then the costs of supply from stores will rise while the costs of delivery, esp. if/when fuel costs fall, will become more competitive. I still see the medium-term outlook for home delivery of groceries as positive. still holding may add at, or around, the 500p mark.

To put today's fall in context DGE says that LAC which constitutes 11% of worldwide sales may fall by 20%. So 20% of 11% = 2.2% of sales and probably less of profits. But, the SP is currently down 13..5% . Is the market crazy? IMO yes.

I'm adding, I've watched DGE for several years, it's a well-run business in a market which is not going to go away. Humans have been drinking alcohol for thousands of years and will, despite the medical evidence, continue to do so. DGE has grown its revenues steadily for a decade and earnings for a similar period (save the COVID year). The SP is back near the 2020 lows and while it may take time to recover, it will, I have taken the opportunity of this morning's panic fall (driven as ever, by HFT bots all panicking in unison- A feature of the markets nowadays). I hold, comfortable in the knowledge that the SP will be above, well above, current levels in the medium-term future.

I bought in her recently, in the 250's on the (somewhat unfortunate) basis that global conflict is good for this Co.s bottom line even though it is self-evidently bad. It seems obvious that military spending is bound to rise and stay high for some years, even if as surely we all hope, peace breaks out in Ukraine, Gaza...

Today's trading update for CHG looks very positive, they are understandably restructuring to meet the pace with which military priorities change but are forecasting an OP of £67 mill , which is ~40% higher than before, and I suspect will be exceeded in the coming years. I will hold/ add, if as sometimes happens stellar results are met with a short-term SP fall.

Alessandro... despite being UK-based banks BARC and LLOY are very different, LLOY profits are almost exclusively made in the UK, as you suggest, in the case of BARC they have a much broader base of operations which includes Barclaycard and a major investment banking arm, which competes with the likes of Goldman Sachs, Morgan Stanley, and CITI .. while I think they will eventually be driven out of investment banking because they cannot compete on scale, it does mean that they are far less dependent on the state of the UK economy. I fear that at the mo. NO UK banks are a sound investment, BARC's international reach makes them the best bet. should you wish to delve further into BARC try this, it's only 526 pages long!!!

https://home.barclays/content/dam/home-barclays/documents/investor-relations/reports-and-events/annual-reports/2022/AR/Barclays-PLC-Annual-Report-2022.pdf

good luck!

I have sold most (80%) of my holding this morning at 248p. That's not because I necessarily think this is the top (like all of us I just don't know) But because having bought at ~100p only a year ago I am happy to take my near 150% rise and bank it. I have become more cautious over my investing life and my mantra is to buy low and sell higher, obvious really, but a surprising number just don't do it.

My other guiding principle is that of opportunity cost. With the cash I draw from here, I hope to invest in other places where the SP has IMV, further, to run.( examples with no promises, DGO, RTO, PSN, CCL.) I may find that I miss further returns here but I can live with that.

For those of you still holding I don't see an SP crash from here, but I do suspect that there may be a retracement or flatlining. MKS has for many years found it hard to turn stable and rising revenues into profits, that may have changed permanently but I'm not convinced, I think management are better than in recent years and distinctly better than their immediate competitors but it is still a tough environment to make consistent profits in.

Today's euphoria may well dissipate to be followed by a more sober analysis.

whatever, I wish continued holders the best.

LGEN is one of my core holdings and while the SP hasn't excited in recent years I continue to add. My reasons were set out around the time of the "TRUSS meltdown "last year which as I explained then, had entirely positive implications for pension providers. Another boon is likely to be signalled in today's kings' speech (odd that isn't it?) when an outline of gov. plans to relax rules concerning how holders of very large sums can allocate them . In essence LGEN and other insurers (and possibly banks) will be allowed, even encouraged, to fund long-term infrastructure and speculative projects. Now the risks there are higher than merely sticking cash in bonds but the rewards are also considerably higher.

The outcomes of such changes as/when/if they occur will be several years in coming to fruition, but will IMV significantly impact returns here. I've added a few this morning and wouldn't be surprised to see at least a short-term bounce in the coming hours /days /weeks.

Today's news see

https://www.londonstockexchange.com/news-article/VOD/call-option-exercise-and-related-cancellation/16198312

indicates where some of the cash raised from the sale of Vod Spain is going. Vod has offered to call (ie buy back) up to 2bn euros of debt with a very long duration (2079) and at an interest rate of 3.1%.

Why they have chosen that debt is not clear to me except for the obvious fact that it is denominated in euros, the currency they presumably will receive for the sale.(Being about to complete the sale of a property in France I recognise the impact currency exchange has on profits!!).

If ALL the debt is offered for cancellation (V unlikely IMV) it would reduce Vods annual debt service costs by about 62 million euros, not a huge amount. For interest Vod also has euro-denominated debt of 750 mill at 6.5% due 2084 , that would be IMV the next best use of the cash.