Member Info for fleccy

Hi Velo, not sure where you obtained your figures, but I notice you've added borrowings excluded from the reported Net Debt figure, like Lease Liabilities. I haven't checked all the figures, but:
FY20 reported Net Debt, adjusted for mark to market gains in hedging reserves, was reported as 42.168 billion with,
Lease liabilities 12.063 billion,
Bank borrowings secured against Indian assets 1.346 billion,
--------------------------------------------------------------------------------
Total borrowings excluded from net debt 13.409 billion

(42.168 + 13.409) = 55.577 billion - 1.346 billion = 54.231 billion

It appears your FY20 figure omits the Bank borrowings secured against Indian assets of 1.346 billion.

BT seem to automatically add lease liabilities to Net Debt, whereas Vodafone report Net Debt with them excluded.

The sale of the Vantage stake may knock around 6 billion of the Net Debt by the end of FY23.

For context, in respect of the Tower businesses:

https://mbnl.co.uk/about-us/

https://www.vantagetowers.com/sites/tower-co-v2/files/media/cornerstone-announcement.pdf

https://www.mobileeurope.co.uk/telefonica-and-liberty-global-looking-offload-50-of-uk-towerco/

"One thing I forgot to say about 3 is that they are heavily in sectors that VOD dont bother with such as area mobile data for smartmeters, smart bus stops, wireless telemetry for all sorts of wierd remote apps, in-car wireless data etc etc."

I'm still of the opinion that 3 and VOD are facing massive regulatory hurdles to merging, but should it be allowed I wonder what will happen to 3's 50% share in MBNL? The joint Tower company shared with EE.
Vodafone transferred their 50% share of Cornerstone to Vantage Towers last year, and it's now reported that Liberty/Telefonica (VMO2) are weighing up selling the other 50% of Cornerstone, but who to?
If Vodafone merge with 3, the new company will own a 50% stake in MBNL with the current Vodafone Towers 50% owned by Vantage, which Vodafone will hold a 49% stake in.
I think you can see where I'm going with this. It'll be another headache for regulators to untangle the web of Tower ownership, as mergers change the mobile landscape. Potentially Vantage could have a monopoly on UK Towers, so regulators may look at mergers, or sales of Tower assets, going forward and force divestment of certain Tower assets should mergers be allowed, alternatively they may say this is too complicated and block mergers.

"Fleccy, the 2025 switch off is sacrosanct. It’s happening."

I have no doubt of that, I was just interested in the reasoning behind AbjectPerformer's opinion.

"Even Google and Yahoo get it wrong although they’re much better these days."

Google Finance charts operate as a live service, so won't lock up to the minute price at the UT, but at the latest price to be reported. Google is useful, as most of the time the price is instantaneous on their Finance page, whereas the price is 15 minutes behind even on the London Stock Exchange, unless you pay for a live service. Another interesting difference between Google and the London Stock Exchange, is that Google historically remembers the full daily volumes, whereas the LSE only reports the On Exchange volumes on the Daily/Monthly Trade Recap bar chart. The chart below is derived from data on Google sheets and shows the total daily Volumes, including both On and Off Exchange trades:

https://docs.google.com/spreadsheets/d/e/2PACX-1vQ49B8X4hFFdtXb6WUx45CDRcgMt5FBglgZCFc5UnApKRpOX8cznaVjvfKeIWdC6xr70q5wCbdhpFe7/pubchart?oid=2085752711&format=interactive

"I don’t think these 2025 2026 2030 deadlines will be met and I don’t think exodus of staff will be drastic , as there will be retraining and natural attrition."

I wouldn't know about that, but OFCOM and BT have said the PSTN switch off will happen at the end of 2025, which gives them another 3 years to prepare. Plenty of notice has been given, can you elaborate on why you think thinks won't happen on schedule?

"Phone companies intend to withdraw the existing analogue telephone system
called the Public Switched Telephone Network (PSTN) by 2025. The PSTN is an
aging network that is becoming harder and more expensive to maintain.
Industry stakeholders have highlighted benefits of the switch to digital, such
as improved call quality
The withdrawal of the PSTN is industry-led. Decisions on migrating customers
are made by the companies that operate and provide services on the network
(for example, BT and Virgin Media). BT's new home phone service for digital
calls is called Digital Voice.
UK telecoms regulator Ofcom expects that most customers will see minimal
disruption. Some customers may need more support from their phone service
provider. For example, customers with only a landline service may require a
phone adaptor to make calls compatible.
Unlike traditional landlines, digital phone lines will not work in a power cut
without a backup power source. Ofcom requires providers to take measures
to ensure uninterrupted access to emergency services including during a
power cut. This could include, for example, a battery supply or mobile phone."

https://researchbriefings.files.parliament.uk/documents/CBP-9471/CBP-9471.pdf

"BT has taken the decision to retire its PSTN by December 2025 and this means other providers that use BT’s network must follow the same timescale. Other companies with their own networks such as Virgin Media plan to follow a similar timescale.

In addition, telecoms providers are also investing in new systems and networks – for example, by upgrading old copper-based broadband lines to full-fibre. They will need to switch customers away from the old PSTN at the same time as upgrading their technology.

This means that in the future, landline calls will be delivered over digital technology, called Voice over Internet Protocol (VoIP). You might also see this referred to as ‘digital phone’ or ‘digital voice’.

Customers who want to keep a landline phone will need to move to a VoIP service
These changes have already started, but you don’t need to do anything until your provider contacts you to tell you your service is changing. Alternatively, if you want to move to a VoIP service now, you can do so by upgrading to a new phone and broadband package.

Once you have moved to a VoIP service, your landline phone will work in much the same way as it always has. However, as we explain below, there will be some differences."

https://www.ofcom.org.uk/phones-telecoms-and-internet/advice-for-consumers/future-of

"Fleccy I think OR are feeling pinch. Wide spread overtime cut backs in place, redundancies are already being discussed"

Redundancies are inevitable in view of the transformation from legacy/PSTN to FTTP/Cloud. The "pinch" is due to every spare penny being diverted into Capex while super deduction's still in progress. My guess is that Capex will be more spread out from next April. I suspect there'll be many jobs disappearing at the end of 2025, with more to go between 2026 and 2030.
If you want to get more basic, then BT will want to cut the overtime; For every action, there is an equal and opposite reaction, Newtons Third Law.

"I will continue to add if it goes sub 90p"

Well done for achieving your 90p buy yesterday, I was dubious it would dip that far. I suspect the broker/dealers had a lot of 90p buy orders and helped the stock dip to meet the orders, so they could benefit from the dealing charges, but that's just my suspicious nature lol.

"Openreach cutbacks hit expansion of UK ultrafast fibre network"

This is a direct result of the budget, since the Super Deduction tax ends in March 2023 and BT's capex will then adjust to the new tax relief landscape.

"However, for those companies with high capital expenditure, many of which are achieving an unlimited 130% ‘super-deduction’ for expenditure incurred by 31 March 2023, tax relief is being spread over a far longer period from April 2023 onwards."

https://www.pkf-francisclark.co.uk/autumn-statement-whats-in-store-for-corporation-tax-and-innovation-and-investment/

The reason for this has nothing to do with BT/Openreach "feeling the pinch", as some articles would have us believe, there's no longer an advantage to buying assets upfront. I suspect other companies, hoping the Super Deduction would have been extended, will also change their Capex strategy. The reason it won't affect the 2026 target for 26 million homes passed, is due to the reason for the change; It's a bit like ordering your barbeque in the New Year Sales, because it's discounted, even though you won't be needing it until the summer, without the discount you may as well wait until the summer when you'll need it.

"Knowing telecoms and both 3 and VOD I think this analysis is very valid. A merger of these 2 is a mutually brilliant idea. 3 struggles to scale and control its back office cost base, while VOD could use the extra market share and sector share."

I can see the advantages for Vodafone and 3 merging, but the regulatory hurdles for such a merger will be massive. 3 and Vodafone are both mobile providers, so both providing the same service in competition with each other. BT's takeover of EE and the VM merger with O2 were both tie ups between fixed line and mobile companies, so different from a Vodafone/3 merger. Unless it suits BT and VMO2 to narrow the field, I could see them taking legal action if a merger was waived through, and there's a good possibility others may take legal action even if the big two don't. Weighing up the probabilities, there's more chance a Vodafone/3 merger will be blocked, rather than allowed to happen.

"Despite the good news of OPERATING Cashflow (not to be confused with FCF (Free Cashflow) being more than sufficient to meet debt repayments for both VOD AND BT - Both have terrible liquidity ratios. Terrible!
Now that does confuse the hell out of me! Tsk! How can that be?
Must be Schrodinger's Cat syndrome and all that :)"

Telecom companies are currently directing huge amounts of capex into FTTP and 5G. These are likely to be the last major Telecom infrastructure upgrades for generations. Once the current round of Capex is completed, the operating costs should be considerably lower, particularly in BT's case. I'm heavily invested in both BT and Vodafone, but I can see BT's path to growing the bottom line much more clearly, probably because BT is easier to understand, and I don't buy into the Altnet threat narrative. Although I'm confident in my Vodafone investment, I was unsure about Vodafone's takeover of Unitymedia, due to the network being Docsis based and likely requiring conversion to FTTP at some point in the future, as is the case with VMO2 in the UK .

I read the article, but Openreach would likely inherit struggling Altnets anyway, if they're geographically located away from other large Altnet provider areas, making takeovers from them unlikely. Openreach would also come under competition scrutiny, if they started mopping up Altnet Fibre providers rather than just overbuilding, which wouldn't be cost prohibitive for BT/Openreach in view of their existing scale.

"Not with 45 billion debt they wont thats more dent than some countries"

I seem to remember implying that Telecom companies maintain a high level of debt as a pseudo poison pill against takeovers, especially since the UK code on Takeovers and Mergers prohibits a target company, during an offer or when an offer is contemplated, from taking any action which might frustrate a takeover offer without the approval of its shareholders. -Since large institutional shareholders can build big stakes under the radar, like Drahi did with BT, institutions would likely vote against any poison pill defence, and make it difficult for a company to defend against a powerful institutionally backed hostile takeover. Having debt on the books allows the companies to have covenants in place, making takeovers difficult. All that said, Vodafone wouldn't have any national security protection like BT, so a cartel of private equity funds could feasibly make a play if they saw profit in breaking up the company.

"As it lurches toward all time low, it is mathematically impossible for averaging down to of worked."

Depends on when you invested, what your initial investment was, the size and timing of your averaging down investments and the amount of dividends you've received.
If your initial investment was £1000+dealing costs at £2 a share, giving you 500 shares, and you then topped up with £10,000 a share at £1, then your average price per share after purchase will be around £1.05p; Assuming dividends remain at around the current 7.7P a year, you could break even, or be in profit, in less than two years.
Clearly it wouldn't be mathematically impossible.

"I havent researched crypto but I believe it is 'borderless'. The ability to move large sums around the world might have an attraction for those who would otherwise face hefty tax bills. Similar to offshore operating and holding companies who only pay tax on service provided in the UK"

If I saw a valid legal use for Crypto Currency, then I'd take a different view, but I don't.
What has Crypto been most useful for so far? Probably blackmail and fraud. The main use, I can see, is the ability to move money quickly and covertly through unregistered exchanges, under the radar of authorities. The Crypto Bulls will say all transactions are traceable, but the recent FTX hacks dispute that claim, with funds apparently being funneled into pools and distributed from there. Clearly the Crypto universe allows criminals to mask their finances, making it extremely difficult for law enforcement to "follow the money".
Crypto currency doesn't make it easier to pay for stuff, it has limited ability to process large numbers of simultaneous transactions and is plagued by fraud, and investors losing their money. The only thing that surprises me, is that the vested interest players have managed to keep the music going so long. All this is my opinion, but FTX and all the other collapses suggest the House of Cards are falling.

""averaging down" is a poor tactic a lot of the time ..as you just put more capital at risk , and you can often find you have to buy a lot more shares to get any significant lower "average" price"

I don't disagree with that view, but it depends on the company and the value of the assets versus liabilities. What amazes me is how Billions can be poured into Crypto currency, when it's clearly a smoke and mirrors investment that's dying a slow and painful death, in my opinion.

"It is disingenuous to come on here giving the impression "it works a treat" when it can't be can it if you look at the ski slope share price? Pathetic"

Actually, you're being disingenuous by only presenting your view. There are various investment strategies, and it's easy to call one person's view "pathetic" with the benefit of hindsight. Just because the market has pushed the share price down, doesn't mean averaging down is a bad strategy for someone who's locked in, but believes the company is worth more. What happens if the narrative changes and the share price soars, possibly on takeover moves, would that make your view "pathetic" because you didn't have the foresight to see it?

"Hi all,if bought today,is it too late to qualify for the divi,thanks"

Yes, you won't receive the dividend in February.

"There we are - 91p.
No doubt more hopefuls will be lured in. The decline will then continue.
I see 71p."

Has your crystal ball had its annual service? In the absence of some sort of company profit warning, can you imagine the buying resistance to get anywhere near 71p? Unless you have some sort of insider information, you've just picked a highly unlikely number out of thin air.

"What’s the reason for further drop ?"

Because it suited some big, vested interest, market players in my opinion. There are probably loads of ways big players can move the price of even large cap stocks. One possible way to alter the price is to direct trades Off Book, keeping volumes low On Exchange, and then use Algo's to drive the price one way or the other on the Exchange.