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Dave ,,,If the Microsoft: Activision tie-up is anything to go on, the UK might object and then be pushed into acceptance by the weight of other pressures. This is a good first step in another major part of the long-overdue VOD rationalisation process.

Yet another incomprehensibly stupid decision by the LLOY board??

I hold both LGEN and MNG (which are comparable to SW) on the basis that they are stable, profitable businesses throwing off lots of cash and in an environment where interest rates are rising and likely to stay high by recent historical trends, the ability of large tranches of "safe" Government bonds to generate revenues adequate to meet pension liabilities is greater than it has been for a decade. Granted that means that Scottish widows will fetch a better price than it would have done a few years ago BUT the question is what does LLOY plan to do with the money if a sale is completed? For the sake of all holders here I do hope it's not to buyback yet more shares at a higher price than the market deems appropriate in a desperate bid to shore up the SP, as they have done for the last few years,

for those interested the figures for Scottish widows are here:

https://www.lloydsbankinggroup.com/assets/pdfs/investors/financial-performance/other-subsidiaries/2022/full-year/2022-swg-annual-report.pdf

As you can see, SW produced a revenue of £ 500 million+, so if a sale takes place I would expect a valuation of upwards of £5bill.

Gwm no, held ggp for a while some years ago but sold at 30p ish, won't go back, hold gold in sovereigns (promised to the grandkids) these days. Folio is now biased toward bonds ,US Treasuries, prefs, high yield stocks, stable , low volatility, Preserving wealth rather than building it.

Lots of people missing the point, yes VOD has debts , but it used (maybe unwisely) those funds to buy revenue-producing assets, such that last year's earnings of 42p per share gave a divi cover of >5 times. That situation is unlikely to continue, but future earnings will still provide significant dividend cover assuming, as I do, that earnings are likely to rise faster than divis.

I don't expect to see meteoric SP improvement here, but I do expect a gradual rationalisation of the company, stable to rising revenues in a market that most people regard as one of life's essentials. I hold ad part of a recession proof, high-yield, low-risk portfolio.

Further to yesterday's posts, I've been taking a look at VOD's debt profile. the data is here if you are interested.

https://investors.vodafone.com/debt-investors/bonds-outstanding-eu-and-us

The good news is that much of it is at below , in some cases well below, the current rate of interest, and as VODs revenues are likely to be priced at around or above the rising interest rates , debt as a percentage of revenue should fall over the next few years.

The bad news is that some of the debt will need to be repaid or rolled over in the next couple of years and that will come at sharply higher rates of interest.

There is also the problem of exchange rates , VOD holds debt in sterling, euros , Japanese yen, and dollars, and the dollar-denominated stuff is going to create some pain if cable remains where it is (and I suspect it will or even fall).

So, what conclusions: VOD is going to be saddled with significant debts for some time and the only way of making major dents in that is to sell assets. VOD has a plethora of assets but the biggest are clearly in Germany, UK, and Italy. In the UK the proposed merger with three should reduce costs but won't return cash. So, Is Italy the next asset to be put up for sale?

LTI, the point you seem utterly unable to get is that while buybacks reduce the number of shares in issue and, if the market cap. remains stable, then IN THEORY, the value of each share should rise. LLOY has demonstrated unequivocally, that expending £ 3.2 billion on reducing the number of shares in issue has had NO positive effect on the value of each share. No matter how you cut it that is the only logical conclusion to draw.

I will not bother to reply to any convolute and implausible logic you offer to refute the blindingly obvious.

Fleccy... but it demonstrates a significant waste of company revenues to achieve less than nothing.

Fleccy. interesting stats. What they tell us is that, over a little under 3 years LLOY has taken out 10% of the shares at a cost of about £ 3.2 billion while the market cap has reduced from about £30 bn to £ 25bn. Is that what you were seeking to demonstrate?

Newsid... in reply to your query here is a copy of a post of mine re the tie-up with three, from May of this year which explains(I think) why Vod is trying to extricate itself from Spain and tie up with three in the uk. Those are the two "challenging markets "

Reposted from 4th may

"This long-awaited development seems finally upon us and there are a couple of points worth making. First I expect that the parties have been in touch with UK authorities and have tacit agreement that the deal will be approved, there may be conditions but essentially it will IMV, be approved in its current form.

Second an examination of VOD's last annual accounts for FY 22 show that its international revenues were : Germany 30%(of total revenues) margin43%, UK 13% margin21%, Italy11%, margin33%, Spain10%, margin23%.......(sorry for the formatting- I have tried formatting tables on this site before and they come out unintelligible)

However, I hope it is clear that VOD make decent margins in Germany and Italy and much less so in the UK and Spain.......guess why they are planning to rationalise the UK market to one less player!!!"

See

https://www.londonstockexchange.com/news-article/VOD/sale-of-vodafone-spain/16188396

Vod will receive 5 bn euros , (4.1 bn cash plus 0.9bn Zegona prefs)

this long-awaited news is another step in simplifying and reducing Vod's mish-mash of holdings.

The net effect should be to reduce Vods enormous debt pile of 33bn euros by about 10%. all else equal that should reduce annual debt service costs by about 150-200 mill euros pa. Not enormous(last year's figs showed debt service costs of 1.7bn euros) but at least (at last?) heading in the right direction.

Effect on SP this am - who knows? but should be a positive if only for the recognition that current management are tidying up an unholy mess.

I hold, largely as a significant divi payer, may add.

Https://markets.ft.com/data/equities/tearsheet/charts?s=LLOY:LSE

How much patience do you need?

Clued ..... absolutely, I have no doubt that the negotiations that proceeded the $497 mill settlement made it clear to RR that the likely outcome from prosecution would have been more severe for RR , maybe bans from operating in certain countries or sectors(ie government contracts)a fine much heavier than £497 mill or even, heaven forbid, jail time for some of the senior staff involved.

If you are a serious investor it's worth reading some of the background, it appears to have been widespread, involving hundreds of millions of " bungs" to secure contracts. That said, It is also clear that RR were not the only guilty ones, other countries turned a blind eye to such practices (and still do).

In simple terms, the Telegraph article points out that RR bought off the UK government by paying £497 million to avoid prosecution, this article outlines a claim being brought by UK institutional Investors seeking compensation because RR " misled the market" ie lied to investors who lost money because of that.

It is strange that it has taken 6 years to be brought forward, my guess is that the II's now think RR is only now in a position to compensate without going bust.

Upfront I am not currently invested here....having exited a few months ago at a price 20p below current.

BUT I watch this share and have been doing some work on the impact of the proposed job cuts, so here's some rough analysis.

Last year RR's results showed an "underlying operating profit" of £837 mill, which after adjustments (primarily the £2.4 bill of debt offset by a tax refund of £308 mill) led to an "operating loss " ie the REAL figure of £1.2 bill

This year TU is still predicting an"underlying" profit of £1.2-£1.4 bill. Given that they are restructuring debt, and will incur additional redundancy costs but will have significantly improved "civils" revenue it's hard to disentangle the numbers to get a true figure for the "real" operating profit/loss. My guess and it is only a guess, is that RR will still show an operating loss for the year after all the conflicting additions and subtractions. I cannot see how last year's £2.4 bill of "net financing cost" can have come down much, RR is still heavily indebted, and interest rates are rising. In addition in the short term, they will have to bear several hundred millions of cost associated with the latest staff reductions.

I won't be buying back unless/until the financial situation clarifies or the SP plunges.

RR has been "Mckinseyed" I used to do consultancy and it's easy, if the organisation is split on product lines with separate "back office" functions for each business stream you recommend that they integrate functions such as procurement, personnel, invoicing,.. etc to reduce overheads and duplication.

If they run an integrated back office, you recommend that they form discrete units that better understand the specific needs of the division and closer integration with the front end.....

I said when I watched the recent presentation that Urgenbilgic was obviously an accountant and not an engineer and he is implementing an accountant's view of how a business should run. I don't know whether it will be an improvement and nor does he, BUT he has done something and justified his appointment. The outcome of these changes will be felt in the short term by those made redundant but the exercise will be cost-negative for a year or two and by the time it is clear whether it has worked TU will be long gone.

......having bought and sold these several times over the last few years and still holding some at a ~650p average I'm in the market again.

WHY?

Because I think long-term (even despite my opening sentence!!) and in the long term I am convinced that grocery delivery will grow, it is more environmentally friendly, it's convenient and we have generations growing up who will pay for convenience, who value their time more highly than my generation does/did. As and when it reaches a critical volume it will become the Defacto way of grocery shopping. I have said before that the nonsense of stores spending staff resources, time, and money to stock shelves and then more time and money for staff to pick from those shelves will become so costly that ALL major grocery chains will drive their customers towards on-line shopping delivery. It has happened to a great degree with clothing, household goods, white goods, tech products ......groceries are the last bastion of inefficiency in the shopping arena.

Automation is and will continue to be, the single biggest driver of change in the world, think the growth of data centres , AI, animation, robotics.....staff costs are being driven down in all areas and OCDO's technology facilitates this.

If I have a concern, it is that the market thinks less long-term than it used to, every day we see knee-jerk price action often reversed in hours or days in response to news, caused by high-speed trading bots which react quickly but don't think, I accept the need to ride out such short term vagaries and to judge when to buy and when to sell using applied logic, not instant reaction.

I have no doubt I will find myself in a position where the SP rises sharply and I'm in profit and take it, but until the day when I perceive that the SP FULLY reflects OCDO's value I will continue to invest.

(Reuters) - GSK on Wednesday said it agreed to settle another lawsuit in California alleging its discontinued heartburn drug Zantac caused cancer, as the British drugmaker sought to end costly litigation that has weighed on shares.

The company, which has so far only settled cases in California, did not give the financial details of the settlement but said it was a "non-material" sum.

Citi analysts estimate GSK will settle all the Zantac cases against it for a TOTAL OF ABOUT $5 BILLION ( my caps) in the first quarter of 2024, clearing what it called a "still relevant" overhang for its investment case and a distraction for management.

The trial for the Cantlay/Harper case, which was set to begin on Nov. 13, will now be dismissed, GSK said, adding it had also settled three remaining breast cancer cases in California related to the same drug.

The latest settlements in California were related to cases due to go to trial in November, with a further set scheduled to begin in Delaware courts in January, GSK said. The company still faces about 79,000 cases related to Zantac in the United States, with 73,000 of them in Delaware.

By closing these cases before the bigger cases in Delaware in January, GSK takes away the potential risk of losing the California cases and being subject to greater settlement demands from the plaintiffs, a GSK shareholder who declined to be named told Reuters

See this RNS

https://www.londonstockexchange.com/news-article/GSK/zantac-ranitidine-litigation/16161207

Slightly worrying for holders in that GSK has NOT said what it cost them to have the cases dismissed. Money will have changed hands, how much? is the key question.

I made the point in posts on this board some time ago that the threat of this action in US courts would take some time (and money) to dissipate. Unfortunately, whether Zantac does or does not cause illness is almost irrelevant, what does matter is how long and how much it will cost GSK before the matter closes.

I do not currently hold and will not until this is resolved and Walmsley goes.

My lovely.....

Useful link, I have highlighted a couple of para's that support the views I offered in a post on 27 sep

"All other things being equal, we expect that if trustees use a discount rate to calculate liabilities that has the same margin above gilt yields at the previous valuation, schemes as at 31 December 2022 and 31 March 2023 will have a significantly lower reported value for their liabilities than they were expecting."

"Overall, the changes in market conditions and aggregate pace of schemes’ funding plans mean that deficits on a TPs basis as at December 2019 and March 2020 are expected to have turned into surpluses as at December 2022 and March 2023."

As and when The BT pension fund reports we should see much better news, tho' it's in the pipeline and hasn't impacted the SP yet, to my surprise.

Formal announcement

https://www.londonstockexchange.com/news-article/GSK/gsk-completes-sale-of-shares-in-haleon-plc/16155443