Member Info for EMMJANE

Here is the consensus summary

https://www.btplc.com/Sharesandperformance/Financialreportingandnews/Latestconsensus/bt-consensus.jpg

There seems to be a lot of talk of buying after the results tomorrow on the dip and everyone use to seeing a sell of on results day.

Could the mkt all be positioned similarly, holding cash to buy cheaper tomorrow and because of this may see a decent higher price on open instead, just on positioning?

Toff - Thats not true. 77 per cent of institutions own centrica. A decent percentage

https://simplywall.st/stocks/gb/utilities/lse-cna/centrica-shares/news/do-institutions-own-shares-in-centrica-plc-loncna/

I know so many people hark on about dividend cuts and shares will drop. Yes you do tend to get this knee jerk reaction, but the reality is its good for the share price in the long term, as long as the dividend cut is not from massive reduced profits and is used for reinvestment/paying debts. As the dividend goes to the company for reinvestment and they use it for even higher returns to shareholders in long term.

Also i cant see ceo committing to any guidance for the year 20/21, as its too unknown and cv19 could end up even more profitable for telecoms, but its all uncertain i.e when will bt sport be back up and running and takin subscriptions. When will the business part of the business be back up and growing etc etc. I think sensible to just say dividend will be covered 2/2.5 times earnings going fwd.

I personally think though the total dividend will be 10/11p for the 2019/2020 year just passing.

Interesting recent advertising bt adverts, giving simple tech tips, plus the new Nhs app that the govt will want the uk population to use, to help, as part of the control of cv19 as next phase.

I saw from below national statistics that 79 per cent of uk population has smart phones with currently 100 per cent of 16-24 year olds have wifi access with them (SIM cards). Whereas only 45 per cent of over 65 s have internet access to theirs.

Clearly with cv19 needing a more tech approach and everyone needing internet access to their smartphones, especially the elderly if Nhs cv19 tracing apps going to be effective. There is going to be some short term strong growth coming in upgrading sim contracts and even starting a sim contract. As bt current adverts are targeting this education, I see some great potential growth for them in short term.

https://www.finder.com/uk/mobile-internet-statistics

Toff - If tangible assets rise vs debt, that doesn’t mean money is being borrowed to pay dividends, it means money is being borrowed to invest in future earnings?

But same time the share price is what it is and if investment is going up but earnings isn’t the investment return isn’t good at moment. But the current share price clearly has safety margin in long term investing. As to me it’s virtually a pound already, so your not looking for much more sp reduction, when considering where it has come from.

Fleccy - sry your correct it is more 10.5p instead of 12p on 2 times earnings. But that still a minimum 9per cent yield in current sp of 113p and a good sustainable dividend that allows company to grow.

I would of thought as we get out of cv 19 and Mkts look for yield again too against the long term base rates we will see, should give bt shares a lot higher capital value rerating.

https://www.hl.co.uk/shares/shares-search-results/b/bt-group-plc-ordinary-5p/dividends

I understood from the below financial metrics the last two years dividend cover has been 1.7 and 1.8 respectively. Higher than that before, due to slightly lower dividends.
Normally the mkt likes to see 2 times coverings as then their is still room for investments, debt reducing or whatever gives the best return for shareholders thereafter.

Also there’s different types of debt. Ie the debt Microsoft raises, which is tax efficient and they still have loads of cash. The type of debt bt raise, which has assets to offset (but needs assets to not deteriorate ) and just some other companies that are junk bond status which is debt to keep them alive.

Clearly bt debt not a major credit problem as b rated and certainly not junk debt.

So in balance I would of thought dividend reduced to 2 to 2.2 times earnings, so something like 12p a share per annum for this year if earnings estimates accurate, which will still give 9/10 per cent yield on current sp and a dividend cover that is affordable.

I think if ceo just said we will keep dividend at 2 times cover, city will take this positively and it will be good for all shareholders in company being safe and able to continue good investment for future earnings growth.

bkkbkk - Im now long bt, but i read that article and think they meant their services were performing well with the extra traffic, rather than the business financially performing well. Although i hope the later is the case too on Thurs.

Scamp - Very well put. There is some great food for thought in your post.

If we get back below 140p here, ill jump in for a long term investment, but i will possibly be fully expecting a further low price than that, if cwu and management don't work together and keep operating costs high, in a low margin/capital intensive business model.

Nice weekend.

Oli - I'm definitely not suggesting Royal Mail move to a lower pay model, as Scamp clearly implies "Royal mail have a great team/infrastructure to move mail fast" and from what i hear from Rico in his announcements i've never actually heard him say Royal mail staff need a pay cut for them to survive/thrive. However, cwu don't believe him and have struggled to believe any management before. There lies the major problem. TRUST, for all to move forward in some form of harmony and without all the distractions that lack of TRUST creates.

Just looking at Amazon results and commentary last night, Cv19 is now almost definitely going to give Royal Mail a major boost to parcel growth (amazon had 29 per cent parcel growth) of which Rico 5 year plan would of suited the business massively. It doesn't need pay cuts or compulsory redundancies and Rico has never said this will be the case.

But cwu clearly don't trust any management and they really only feel truly comfortable as a national company. Which is a shame as financially everyone could of won with more TRUST, especially as the competitor's costs are going up like Amazons who are now forced to pay lowest paid staff nearly 20 per cent more, as stated in their results last night.

Oli - That's kind of my point, cwu are so cynical of any offering of a deal by any management, its ingrained in their psychology and hence moving Royal mail forward is like moving a tanker. Nothing can happen without the two sides that have inherent distrust in each other. Which gives the competition a major advantage to gain business over time. That is also clearly why cwu are so entrenched about keeping the USO, as that is their moat that keeps jobs safe from the enemy and keeps their strong bargaining power.

Ive been thinking about investing here for good few months as the share price is fundamentally cheap, but the cwu / management relationship that is entrenched needs changing to truly realise the potential of the company and it does need something like the 5 year plan that Rico set out to become a fantastic company and their needs more trust from the cwu or even a legal contract that guaranteed that no redundancies (unless voluntary or natural), as Rico as always stated.

But the trust between the two needs sorting before i can invest. But same time the share price is very tempting even with the distrust, as it will come to a head at some stage.

It appears to me, Royal mail management could offer a 15 per cent pay rise but the cwu would call on members to strike, as they will find there's something untoward behind the pay rise.

It feels like no matter what royal mail management do, cwu will disagree as they just want to be nationalised again and will do whatever it takes to become nationalised.

Toff - I’m sure govt bonds and credit grade assets improved in value since last valuation, due to the extreme central bank moves to buy tons off them pushing the yields even lower, which makes the pension funds money if they owned them a couple of years ago at higher int rates.

So those assets in by pension have made capital value increase since last valuation?

Thank you for some of those share tips - re bt yes i noticed over long long period, they do have lots of long cycles over 7 year period of wide ranges in sp. This current sp area is certainly historically towards the lower end. Although as i said in short term it definitely is possible for many reasons to even see cheaper or higher quickly. Which way, i couldnt tell you as im terrible at short term trading. I try to work out if company will be good for at least the next 10/15 years, then over that time of dividend payouts and buying at low p.e, you can get good returns.

Another company i like for the long term and even medium term as we work our way through covid is speedy hire. Which ill look to buy a little of tomorrow, especially with cash a little tighter some builders/diyers/construction will look more towards hiring and with social distancing for a while those diy jobs at home will be done whilst going out to enjoy oneself in restaurant/pub is put on back burner. Plus they are reasonably valued and good balance sheet and can see them around for a long while and they have room for more innovation in using tech too for orders./returns.

But there are quite few companies that are good at moment for long term and will look to put 80 per cent of the inheritance to work in about 7/9 different equities i like for long term and 20 per cent will be for nice treats for the family over next years. I also specifically like uk equities at moment as they have the brexit discount on top.

NDNIC - With regards the next pension valuation, thank you for highlighting bts pension investment breakdown, that gives me quite bit of comfort that the valuations won't be too bad at next valuation in june as govt bonds and investment grade credit would of made money for them and offset equities well. Property probably break even when including yield.
The other positive that may come out of june revaluation is avge life expectancy has fallen in last few years, which is part of the calculation used by the actuaries, which will help the amount needed in the pot. (thats without taking into account cv deaths into avge life expectancy). I believe aviva at last results was able to release gbp800m in profit for its annuity business due to this phenomenon in the last year annual results released a month or so ago.

Investinvalue - great comment / timing on your rsi. just dropped from 173 to 165.90 since you posted.

Thx Aspers for that tip - Ill do some research on that company and see if it suits me long term.

Investinvalue - no problem thanks for your thoughts and time..

Thx aspers and well done at trading it.

Sadly im not very good at trading short term, as not a great chartist or i just struggle to know or see how a share does in short term. But i do see some very good short term traders that do well.

Im more of a value trader on companies that i feel will be around in 20 years, making constant profits over that period, even through bear markets, as then i know the odds are on my side from the accrual of earnings over time. Hence why i look at buying shares as buying a company for the long term.

But i must admit, buying these as i just this minute did at 1.1820. Id be very lucky if it doesnt go lower at some time in next few weeks. But im ok with that and let time be on my side, as i feel bt is a good long term company.