Member Info for Cpt.Hornblower

For your local member of parliament you need to do your own search for the politician relevant to your area.
For Lloyds you can start by emailing:
shareholderquestions@lloydsbanking.com

I would encourage shareholders to both email their local member of parliament and the banks investor relations to agitate for all major UK banks to pass the 0.21% banking levy onto its customers.

This levy is absolutely nuts in the current environment of effectively zero interest rates. Just go to the latest 1st Qtr results and look at the banks net interest margin, its being crushed and on top of this the bank has to pay a levy of 0.21%. This % might seem small but factor it compared to the net interest margin, and its actually material to banks current profit.

If you have a position in banks, agitate. It's your capital on the line!!!!

I would encourage shareholders to both email their local member of parliament and the banks investor relations to agitate for all major UK banks to pass the 0.21% banking levy onto its customers.

This levy is absolutely nuts in the current environment of effectively zero interest rates. Just go to the latest 1st Qtr results and look at the banks net interest margin, its being crushed and on top of this the bank has to pay a levy of 0.21%. This % might seem small but factor it compared to the net interest margin, and its actually material to banks current profit.

If you have a position in banks, agitate. It's your capital on the line!!!!

No Blah,
You are spreading serious misinformation.
Very clear, if dividend IS paid, there should be no effect. If dividend is NOT paid of course there will be a negative effect since the payment date for the dividends is only a couple of days away.
But to be very clear, the share price will NOT drop because the dividend IS paid. (However this is not a binary solution, the share price could drop for many other factors that are not related to the dividend being actually paid).

cheeze but there is some serious mis-information being spread on this board re M&G.

The share is already x-dividend, so in itself M&G will NOT fall because it pays the dividend it stated it will give on the ex-dividend. Thats the whole point of the stockmarket requiring every company to quite clearly state its ex-dividend date.

Ex-dividend date was in April.

I listened to the whole webcast,
it was a 'conservatively' scripted AGM, little in the way of any positive news.
The reason the share price dropped far more than the ftse as it was being relayed is because the market is very skeptical that the $1.4b pounds of 1st quarter provisioning will be anywhere near enough.

The market is forecasting that much more than $1.4billion of provisioning will be required over future periods which, coupled with reductions in revenue, will see Lloyds incur significant losses.

There is a reason why the market is pricing Lloyds shares at nearly half their NTA, because the market forecasts that part of that NTA will be chewed up in operating losses over the next few years.

I have exposure, but am not adding to my positions yet, still too risky of catching a falling knife, or that their will be a dilutionary share capital raise.

Maybe early days yet,
but in a growth constrained world, the market is paying up for growth, or importantly even a hint of it.
By cutting its dividend and investing heavily in openreach, market consensus is currently forecasting that FY2021 will represent the low point in both revenue and ebitda, with both starting to increase from FY2022.

Importantly debt is forecast to increase much slower than capital expenditure, thereby setting up an 'asset' base for future earnings, and the pension liability is forecast to decline as well.

The market is forward looking, not backward looking.

If this does come to fruition, then paying under 4 times EV/EBITDA multiple will be considered very cheap, and the market will re-rate BT Group accordingly. (Just look at the EV/EBITDA multiples currently in the market for any stock with growth)

After a rough 5 years, now could well be the time to purchase additional positions. I have been buying very heavily in the last week, increasing my position by 500%. BT Group now represents a significant % of my portfolio at 10%.

Some interesting musings:
a) Pension Deficit gross of tax declined from 7.2b in FY2019 to just 1.1b in FY20
b) NTA on BT group is approx zero, given that BT group is still essentially a telco company, it just shows that recent historical should NOT have been paid, the chairman was living in fairy land. Telco is high cap ex and subject to technological advancements. Cannot pay out based on historical capital without re-investing in the business.

Chairman should be booted, he is a liability to BT Group. His prior commentary that the dividend may be cut in a 'year or two' shows both arrogance and a failure to understand the technological reinvestment requirements of the company he chairs. (A quick review of this can be seen by the balance sheet, net assets is 14b odd, however intangibles is approx 14b as well. Back out intangibles and the balance sheet has essentially no hard net assets, does this make sense for a telco company???)

I think with the release of the FY20 results and the two year haitus of the dividend represents ground zero for rebuilding BT group.

does anyone on this forum use Marketscreener?
https://www.marketscreener.com/BT-GROUP-PLC-4003616/financials/

I draw attention to two numbers:
2021: Price to book at 1.35
2021: ROE: 20%

When ROE is approaching twice Price/Book expressed as a % less one (ie 1.35 is 13.5%) then historically its been very good value and sees out performance. (I admit in BT's case that ROE is inflated by high debt)

so then firstly:
if the spouse gets half pension, then the pension liability declines, correct?
secondly: if the spouse is approximately the same age, then if the corrronavirus goes global, then isn't the spouse at high risk of passing as well given the age bracket, and the higher mortality rate amongst older people.

So again, I am saying the market is not pricing BT Group correctly.
You can't have it both ways:
BT drops on company specific reasons, and then BT drops on corronavirus increasing risk off in the market.

By the way has anyone else noticed, but for the last week, BT group is trying to rise more than the market overall and fall by less than the market overall.

Only a narrow reference period (one week), but its been the most peaceful trading pattern out of the last two months. Maybe a bottom??

should be an insurance product that guarantees that the amount accumulated during ones life, then generates a return once one retires (defined contribution) or guarantees a defined payment upon retirement (defined benefit).
Under one contribution scheme the employee is responsible for his/her income stream upon retirement, under the other the company/government is responsible for his/her income stream upon retirement.

Under one scheme the underlying capital is retained by the employee and can be passed onto his/her decedents, under the other the defined income stream is passed onto his/her spouse, but there is no underlying capital.

and as i post this, it seems like BT Group is rising off its lows, maybe the market is realizing this or maybe the market is realizing that BT Group could be considered a defensive company if things get really difficult.

and if the spouse is of mature age as well?
Half pension, then no pension?

The point I am making, is that this market is not very efficient in pricing BT at the moment.
If things get really bad, then for BT group there is a potential silver lining.
BT pension liability has been based on a probability matrix of retiring age and duration. If lots of people start kicking the bucket then obviously that formula will have to change, especially as new comers are not entitled to same benefits as those on old plans.

If this corrona virus does spread around the globe and become truly pandemic, and if its mortality rate amongst older people is 15% odd per cent, then will this impact on the Pension liability???

Because a) is the debt finance linked to market cap covenants. If not and they are linked, for example, to editda coverage ratios, then market cap is irrelevant. So my suggestion is you read the annual reports notes to the accounts where these details are normally found.

B) have you backed out the changes to accounting standards which increased your £20b of debt by £5 odd billion.

C) for pension deficit coverage, again I suggest you look at the annual reports which cover required discount rates (or implied future rate of return on funds) and evaluate whether the decline in discount rates (which increase the liability) are now adequate.

Ok fleecy
Then surely any intelligent debate on the movement of debt should firstly back out this accounting effect.
So any discussion on debt should remove this £5.6-£6.5b debt firstly from net debt and then evaluate.

When some posts stating the recent “massive increase in net debt” attention should be drawn to the accounting for lease change.

So when we subtract £5-6b for required lease accounting and we also subtract the one off whatever billion pension top up, what is the real movement in net debt over the last couple of years and is this sustainable with future movements in net debt???

Surely this is more intelligent?
I understand some on this forum just want to either scare or waffle, but in either case it is just a waste of others readers time!!!!

All this talk about debt.
Has anyone bothers to analyse how much of that debt increase is because of new accounting standards over lease accounting???

This component is not real debt, just accounting wizardry. Asset: lease right of use, debt: lease liability

And another thread that I suggest that for those of you who value the most precious commodity you have in your lifetime: your time, just skip this whole topic. Higher RoT will be achieved elsewhere

And just as this board was becoming a bit useful, out comes all the written equivalent of verbal diarrh**rea.

remember broker reports are created with a maximum of 12 month view point.
Obviously there is nothing of excitement in the next 12 months, but again obviously once there is any whiff of excitement 12 months out, the share price will not be at current price.

I just looked at bt group 30 year share price graph, it moves in cycles, and right now we are trading in the lower end of its long term cycle (if not the absolute bottom).

My view is to purchase slowly from here on dips. My current holding is not that large that any further additions will over represent bt group as a % of the portfolio. Next top up point will be around 150p give or take.

Until then I will switch off.
Good luck everyone and good nite.