Time to exit12 Feb 2019 18:19
Jack, The time to exit with hindsight, was Jan 2018, If I had, I would be about £100k better off than now. So with hindsight they perhaps were junk then. I could get very cheesed off, but whats the point? They may get back to the £2.36 sp of jan 18 (ok no flying pigs seen yet) But of course there is the big divi. I have always been worried about the divi coming out of the sp, which clearly it has in the recent past. But it's the future we should look at now, & I think the divi will exceed any net fall (sp -divi) in future. My biggest worry is this idea that if free cash flow is more than the divi, then that,s ok. Although I believe in vod's case this is so, as a general rule this is dangerous. If you can borrow enough money you can always generate free cash flow by investing that money to increase your profits. E.G. If I earn £2k per month, but spend £2k per month, no free cash flow, but if I borrow £60k & pay 3% apr interest I pay about £150 a month in interest. & have £60k cash flow, reducing by £ 150 a month. Of course at some time I have to pay the £60k back.The reason I bring this up is it is not as black or white as some suggest, basically it's down to gearing. At the end of the day (no pun intended) vod has to eventually make more profit than it pays in divi's, & still have enough left over to cover it's deb't. & this is the big question, how do you rate deb't with regards to the share price.