Member Info for fleccy

"Openreach Preps More FTTP Broadband Price Cuts for UK ISPs"

https://www.ispreview.co.uk/index.php/2022/10/openreach-preps-more-fttp-broadband-price-cuts-for-uk-isps.html

"Wish he would buy Vodafone to help with my sanity"

He could have bought both BT and Vodafone for not much more. Funny how Musk will pay nearly as much, for a loss-making company, when he could have owned two big Telecoms companies. Always makes me smile when I think about Facebook paying over $20 Billion for WhatsApp.

Interesting subject Net Neutrality. One thing that isn't commonly mentioned is the ratio between power consumption and bandwidth. Although routers are quite power efficient, the more bandwidth the higher the power usage and the more cooling required. Maybe Big Tech should be carbon taxed on the Network power consumption over a certain bandwidth, rather than putting it on Telecom companies who carry the data but aren't the originator; I don't think anyone could argue against that.
Clearly big tech is investing in subsea capacity, but their international data then relies on Telecom providers footing the cost of distributing the data around the country, via core network and DWDM backhaul. There's a good argument high bandwidth content providers should buy distribution capacity, rather than relying on competition forcing Telecom providers to constantly upgrade and benefiting the content providers for free. In many respects Big Tech are getting a free ride, in my opinion.

"Read the RNS. PROFITS SLIDE. Simple really."

Where does it say that in the RNS?

"I'm not sure why someone claims what profit increased"

"Underlying net interest income up 15 per cent, significantly driven by a stronger banking net interest margin of 2.84 per cent year to date (2.98 per cent in the third quarter)"

"Underlying profit before impairment up 29 per cent to £6.5 billion in the period (with £2.4 billion in the third quarter), as a result of robust net income growth"

The headlines are playing down an increase in profit, by focusing on the profit after impairment.

As expected, a decline at the open. If I had any cash available, I'd use today's headlines to add more, unfortunately I'm currently fully invested and already hold over 400,000 Lloyds shares. I won't be selling but will add more as dividends roll in, if these low prices persist. The price is currently in bargain basement territory in my opinion.

"Pretty much what the market expected. markets always forward looking. trend is for impairments to grow despite increase to NIM, that's the outlook for 2023. the SP will stay at current levels at best."

The impairment is of little significance in my opinion and disguises the fact that profits are good and expected to rise. The headlines are clearly aimed at promoting negative sentiment, with vested interests shaping the narrative. How much negative sentiment is already baked into the share price? Far too much in my opinion.

"Fleccy, yes patience is definitely a virtue with this share?"

I would expand your statement to include any UK focused stock, and many UK listed stocks with foreign earnings. It seems the big market players are still punishing us for our Brexit decision. Anyone else notice how some market commentators are slipping Brexit into interviews? The market appears to control Governments these days, whoever we vote for.

" will true value shine through at some point"

true value will shine through at some point

"Extrapolate this over a year and factor in base rates of 4 % and you should get the picture as to what 2023 is going to look like for Lloyds….. income is going to grow inexorably higher and we will see record profits."

Indeed, my sentiment too, decent set of figures. I've noticed Reuters are talking the results down in early press releases, so expect declines initially, but the share price is undervalued and that will true value shine through at some point.

Anyone else think the market makes it up as they go along? Interest rates are too low and damaging the banks, then they're too high and the market worries about rising defaults, now they're putting it out there that windfall taxes are a possibility. It appears there's no Goldilocks state to suit the market when it comes to UK stocks.
I'm expecting Lloyds to post good results tomorrow, but it's funny Moody's downgrades UK lenders in the same week they're reporting. It's like a film with plot twists galore and the audience left confused whether the main characters will ever do well. My view is contrary to the negative narratives aired by the vested interest players who control the market, I think interest rate rises are good for the banks.

Actually, you could be right. Going off the statement, 30% of 7.7p is 2.31p, so they may well keep the interim at 2.31p and increase the FY 23 Final dividend.

H1 FY22 I meant

In H1 FY2 they said:

"Dividend
As communicated in May 2021, the Board expects to resume dividend payments in FY22 at 7.70 pence per share with 30% payable at the interim stage. In line with this, BT is declaring an interim dividend of 2.31 pence per share. The Board expects to continue with a progressive dividend for future years, and to declare two dividends per year with the interim dividend being fixed at 30% of the prior year’s full year dividend."

"I reckon will stick with same as last year ie 2.31p"

Why's that, isn't the dividend supposed to be progressive?

"Interim dividend ,my guess .0249p"

I assume you mean £0.0249

"Royal Horse Guards involved the RSM instructing me to eat a steaming horse dung sandwich! Never really recovered from that."

So you're confirming that you're full of 5h1t?

This isn't actually new news; I seem to remember a previous thread where this was discussed in depth. Here are some links to articles, etc.

https://www.ispreview.co.uk/index.php/2022/05/ofcom-and-bt-reportedly-prep-contingency-plans-for-altnet-flops.html

https://broadbanddeals.co.uk/guides/what-happens-if-my-internet-provider-goes-bust/

"Far and away better than the resident guff merchants, fleccy and larry bling, rambling on about pensions and making no sense whatsoever with their cut and paste tomes."

Very good. Have you ordered your replacement Clozapine prescription yet? You may need to request a larger dose.

"Could anyone please explain how the asset base goes down 11billion due to gilts crashing but the funding improves."

My guess is it's to do with the way liabilities are calculated, in respect of the discount rate, hedging, year on year drop in liabilities due to payouts, and the discount rate.
BT have contributed:
"Under this recovery plan, BT made deficit contributions of £500 million, £1,660 million and £400 million in March 2021, May 2021 and June 2021 respectively, with a further £500 million paid in March 2022 and £400 million paid in June 2022".

The liabilities fall by approximately £2.6 Billion a year as members receive payments.

The average discount rate changed from -0.8 in 2020 to 1.4 in 2021 and the higher the discount rate, the lower the liabilities. The Actuarial average discount rate, based on yield for high-quality corporate bonds, may increase at the next Triennial review, leading to further calculated drops in liabilities.

Hedging must be somewhere in the mix too.

This is my interpretation, but I'm not an accountant so I'll happily be corrected if I've misunderstood things.