Member Info for fleccy

The 16:42 trade had a trade type of P SDIV, SDIV stands for Special Dividend Indicator apparently.

Very strange trades, why would someone pay more than the market price?

tradeTime currency price volume tradeValue type
15:53:31 GBX 165.755 468077 775861.0314 Off-Book
15:53:16 GBX 165.755 1108258 1836993.048 Off-Book
15:42:06 GBX 165.755 1576335 2612854.079 Off-Book

Here's an article from Simply Wall St:

https://finance.yahoo.com/news/bt-group-plc-lon-bt-125309003.html

https://simplywall.st/stocks/gb/telecom/lse-bt.a/bt-group-shares/future

The Simply Wall St (BT.A) web page analyst forecasts don't appear to take account of BT's projected cost saving's up to 2025, so I assume the Analyst projections are indicating any annual savings up to 2025 will be channelled into FTTP/5G capital expenditure. The article goes further and lists "10-year free cash flow (FCF) forecast", with the Free Cash Flow estimated to decline post 2026 to 2028. The decline in Free Cash Flow estimate makes no sense to me, as BT are forecasting annual cost savings of £2.5 Billion by the end of 2025 and 25 million homes passed with FTTP at the end of 2026, so am I wrong in assuming capital expenditure will tail off post 2025, with even more cost savings post 2026?
Does anyone have any thoughts on this? Because to my mind the analysts don't take account of BT's projected cost savings, the drop in capital expenditure as the rollouts progress toward completion, or the reduction in pension payments and other cost savings derived from having a more efficient/simple network structure.

"what would be a fair price if you were buying BT? THATS A QUESTION"

It's a subjective question, dependant on your personal feelings and investment window. Currently the market seems focused on Growth over Dividends, so what's your personal preference? Can you tie up your money for years, and wait for capital profit later? Do you want to reinvest any Dividends, or use them for income now?
So called growth companies, like Google, are apparently valued at 20+ xP/E according to the market, whereas Telecoms is currently down in the dumps with companies like AT&T at around 6x P/E, and BT at around 12xP/E, according to Google. BT is currently heavily investing in FTTP/5G, which is clearly eating into their bottom line, but they've forecasted £2.5 Billion annual cost savings by 2026. Looking forward, BT's capital expenditure will reduce dramatically, the pension deficit repayments will tail off, and the debt lease liabilities will reduce as Exchanges are closed as FTTP progresses.
As I said it's highly subjective, but my personal view is BT's is worth more than twice the current price. It wouldn't surprise me if BT exceeds £4 before 2030, but this is my personal view, DYOR.

To add to my last post, had the UK Government/Regulators focused on allowing UK companies to grow, it would have been the likes of BT looking at taking over Darktrace. No wonder we're the laughing stock of the World.

"Some humour at last Fleccy."

In reality it isn't funny though. British companies don't have a chance of growing into international giants, the UK regulators are quick to jump all over their home companies, whereas the US regulators are extremely good at jumping all over foreign companies. BT's a good example of how you diminish your national companies, allowing foreign companies to move in while you hold back your own. In the name of competition OFCOM have diminished BT's strength and revenue opportunities, allowing foreign (US) companies a discounted foothold in the UK. VMO2 is owned by Liberty Global and Telefonica, CityFibre is owned by Goldman Sachs and Antin Infrastructure Partners. BT have been forced to open up their infrastructure to allow foreign investment discounted access to their infrastructure, thereby diminishing BT's ability to grow outside the UK.
Look at what India did with Vodafone, changing laws retrospectively and chasing them for tax which wasn't legally due. Jio started up and the Indian Government implemented policies making life easy for Jio, while making life extremely difficult for the competition, making it impossible for the competition to profit; Jio is now number One in India, thanks to massive help from the Indian Government. Vodafone India merged with Idea and stiil couldn't profit, so the Goverment now own a stake in Vodafone Idea. Vodafone wrote off their Indian business and were willing to walk away, due to the regulatory position in India, which I suspect the Indian Government didn't foresee.
If Google, Facebook, etc had started out in the UK, the regulators would have been all over them and prevented them growing into global giants, whereas US regulators have all but allowed the Tech Giants to takeover anything and everything, allowing them to grow into their current behemoths. What appears to be happening now, is any innovative UK tech companies are leapt on by US private equity as soon as they start to look successful, what a weak bunch our politicians are. A good metaphor is fiddling while Rome burns. While every other country implements covert protectionism, we just bend over and get shafted.

Yeah Ted Baker and Darktrace, both targetted by US firms. We really have become the 51st state. Thoma Bravo is a US private Equity firm, and Authentic Brands is a US brand management company.
My Grandaughter was over at the weekend and we have a small outdoor playhouse which she turned into a cafe, she made a pretend burger and when I asked her the price she said 5 Dollars, incidentally everything in her pretend cafe was 5 Dollars. We may as well give up, change for Z to zee, and sit on our f@nny's instead of our @rse.

"The City isnt ready to tank the whole FTSE but does need a means of projecting its serious concerns and one way it often does this is via the BT share price. "

To add to my last post, I'd suggest the FTSE has already been tanked over a prolongued period. The FTSE and European indexes have underperformed the US massively, so I'd suggest the US is in a bubble and has been since early 2009, with the bubble really growing from 2015 onward. The NASDAQ just defies gravity, outperforming the FTSE by nearly 9000% at it's Nov 21 peak, coincidentally coinciding with the Crypto peak. I believe the investment world is going through some sort of collective insanity, so I'll keep to my strategy of investing in Value Dividend paying stocks and wait for the shock therapy that'll restore market sanity.
I don't believe all market participants are insane, with money invested into infrastructure like Altnet's and Fibre. I do believe there's a risk for the investments into UK Altnet's though, as BT's scale and future pricing power could make life extremely difficult for the new entrants.

https://www.google.com/finance/quote/UKX:INDEXFTSE?window=MAX&comparison=INDEXDJX%3A.DJI%2CINDEXSP%3A.INX%2CINDEXNASDAQ%3A.IXIC%2CINDEXEURO%3APX1

"The City isnt ready to tank the whole FTSE but does need a means of projecting its serious concerns and one way it often does this is via the BT share price. ( Have you ever noticed that correlation?)"

I'd possibly agree, if the drops on the chart didn't correlate exactly with the release of the TalkTalk story, and the results. What I do agree about though, is the two events weren't the primary cause of the drops as I believe they were scripted moves. My VOD and Lloyds shares aren't doing too well either. It's my opinion that UK stocks popular with retail investors have been under attack for many years, but I can only guess at the reasons. UK DB pension funds have moved more into Bonds and Gilts, and the DC funds are possibly focusing more on US Growth stocks. Because of the lack of institutional investment in UK focused stocks, and the FTSE in general, UK retail investors are possibly an easy target for predatory hedge funds with big resources, but that's just one guess; Another possibility is that retail are being shaken out, so the likes of Drahi, Blackrock, etc, can take long positions on the cheap. I'll just continue holding, and topping up where I see the most value.

Anyone heard anything else backing up the speculative articles about VMO2 taking over TalkTalk?

Me neither, the most significant news around TalkTalk is their purchase of SSE Phone & Broadband, and the only news involving VMO2 is the confirmation of £4.5 Billion investment, in Fibre, by VMO2's parents; The fact that the Fibre JV is run as a seperate company, with VMO2 filling the role as an anchor tenant, suggests VMO2 couldn't raise the finance on its own so it fell to its parents to organise this.
Everything I've read since the VMO2 TalkTalk takeover story broke, suggests that it was absolute BS, yet the story was used to knock more than 7% off BT's share price in a single day.

" I’ve already said in previous posts, feel free to educate yourself in reading them."

"It’s not all about pay there’s other issues which people are 100% not happy about ie £500 of shares promised each year (now gone) no share save for last 2 years which was a way of saving, forced redundancy changed from 2 years to 12 months after it was promised after they shut down the pension scheme with no consultation, the new one is trash compared basically loosing thousands"

Ok, I've read back and I've pasted your comment above. I'll try and see if I can find some reasoning behind changes.

First the £500 free shares:

Last March this was released

"Under this plan BT would pay £1,000 immediately in cash and £500 in shares after 3-years (the £500 share payment is a discretionary award made under their previously announced yourshare scheme), which they say is equivalent to about 5% of the average salary for a front-line worker on their team.

The operator says that this “generous offer” is being made despite BT freezing pay across the company and ongoing, unresolved discussions with the trade unions over its transformation and modernisation plans. Indeed, earlier this month the Communications Workers Union (CWU) announced that they had “taken the decision to move to an official national industrial action ballot“."

https://www.ispreview.co.uk/index.php/2021/03/strike-threatened-bt-in-gbp1500-covid-bonus-to-59000-staff.html

It appears that the CWU and BT have been at odds for well over a year, and the Union appear to believe they have some right to dictate the company's future strategy. Any changes to benefits are likely down to disagreements between the CWU and BT management.

Sharesaves aren't a right, and any employee wishing to invest in BT could still do so through the Directshare scheme, the Yourshare scheme is apparently a bonus scheme based on company performance, up to a maximum of £500 in shares a year, not guaranteed.

"Our DirectShare scheme lets you easily buy shares from BT Group. You can contribute anything from between £10 and £1800 a year, and because it comes directly from your gross salary, it’s a tax efficient way to invest."

"YourShare is another way that you can be a part of the wider success of Openreach and BT Group. The exact value will depend on the performance of the Group as a whole, but each year we’ll offer up to £500 of shares to every member of the Openreach team."

https://www.openreach.com/careers/life-at-openreach/benefits

Maximum 12 month redundancy payout is now standard across UK Blue Chip companies. I myself was made redundant two years before I was due to retire, and received 4 weeks for every year worked up to a maximum of 10 years, with 3 months notice on top, ie a total of 12 months redundancy pay. Complaining about a reduction in redundancy payout from a maximum of two years to One Year will gain no sympathy from anyone.

"as I’ve said you know bugger all
About the workforce having never worked there I tell you what go to the picket line and ask them if it’s just the pay rise see what they say."

Clearly I'm not going to visit a picket line, so why don't you educate me GRS? I'm interested to know what the reasons are if it isn't about pay.

What I would say is that the people manning the pickets are the most motivated, and may not represent the consensus view. Clearly the few who are manning the picket lines are left leaning, and of an activist ilk.

"POKERCHIPS.. so you believe the a CEO taking a huge pay increase ( hidden as bonus) is fair then? He is effectively say he he needs it more than we do? WTF"

Different job, different World. It's like saying a street cleaner should see the same pay increase as a Brain Surgeon, when there's a shortage of Brain Surgeons and an abundance of street cleaners. This is an age old gripe, no amount of complaining, or striking, will change the fact that bosses are paid differently. From my point of view Jansen is worth every penny if he succeeds in BT's radical transformation.

"for the 10 millionth time it’s not just about pay"

If it isn't about pay you should contact the CWU and tell them to change their public statements.

"Over 40,000 BT Group workers to hold a two-day national strike against real-terms pay cuts"

"The dispute centres on workers opposing the imposition by the business of a far-below-inflation, flat-rate, £1,500pa pay settlement on employees,"

https://www.cwu.org/news/bt-group-members-set-to-strike-on-29-july-1-august/

The Union keeps saying it's about pay, are you saying it's about something else?

"A predictable response from you fleshy , you lack empathy for your fellow man
As long as your pension is protected your alright Jack
Repent fleshy before its to late"

Not really, I was around in the 70's/80's/90's, taking on my first mortgage by the mid 80's, and watching my mortgage repayments double over time, with interest rates peaking at nearly 15% in 1989. A 10+% pay increase for BT employee's would lead to big pay demands across the whole of UK business, that would feed through to inflation, forcing the BOE to raise interest rates faster and higher. I don't have a mortgage, so I personally wouldn't suffer from big interest rate increases, the BT employee's in the early years of their career will likely have big mortgages and will suffer. As I've said previously, wage increases need smoothing out over time, it isn't like people take a pay cut if inflation goes negative. The Unions are politically motivated to cause as much disruption as possible. The left have been in limbo since momentum failed to hijack the labour party, with the one member one vote policy installing Corbin at the head of the party, they are now trying to find new ways to revive their cause.

"We have today served notice on BT Group and Openreach for further strike action on Tuesday 30th and Wednesday 31st August"

Another two days of lost pay for the lower paid workers, who did ok out of the payrise anyway. I don't understand the reasoning for two day strikes, the last strike was similar to an Easter weekend break, and the next one wont achieve anything either. All BT will do is suspend provisioning and any non service affecting work/fault resolution, effectively a two day Network freeze similar to Christmas.

"you mentioned your 4.2% rise each year where I presume you were pension A/B on probably a c3 grade and you get that under you kick the bucket,"

I haven't ever worked for BT, I worked for one of their competitors. The 4.2% is the cap, not what I receive. Because I retired half way through the last financial year, I only got just over 2% rise in April, the maximum I'll get next year is 4.2% even if inflation goes up to 13%.
The younger guys should be looking at how they can make themselves more valuable in the future, not fighting for a mediocre pay rise now. If I was starting at BT now, I'd be fighting to get on as many training courses as I can, as Telecoms are going to see a severe jobs cull once FTTP is completed. You'd think the guys who work in the industry would see the writing's on the wall for future job reductions. With PSTN gone, and the Access network only comprising of ONT's/OLT's with the fibre inbetween, many jobs will cease to exist and FTTP will require a much smaller field force. The safest jobs will be the Network operations centre roles in transmission and IP, but they're the easiest to export to India and other low wage countries. The best protected UK jobs will be the specialised Field IP/Voip roles focused on business customers, for dealing with faults and installations. The Telecoms transformation will lead to convergence and simplification of service/product offerings, so again less staff required. The best chance of keeping as many NOC jobs in the UK, is by not rocking the boat and encouraging employers to export remote management jobs. The Unions will just encourage faster job cuts, and exporting of remote management roles, in my opinion.

"He believes the staff are driven by pay alone, but he should know that most staff do more than there get paid for everyday as a team and breaking moral means he loses more than he bargains for."

I've heard that sort of rhetoric before, but it rarely plays out in reality. The truth is the strike hasn't and doesn't stand much chance of success. The lower paid workers actually received a decent pay rise in percentage terms, the older workers are probably trained on the legacy network and coming close to retirement. Anyone who's interested in the job, with years left, should be more interested in re-training and moving into new roles with new opportunities in IP, DWDM, and Cloud.
Reading between the lines, it seems the CWU realise that strike days hurt their members more than it hurts BT, hence the letters to MP's, and trying to drag major shareholders into it.
I also don't understand how the CWU think it's ok to attack shareholder dividends, when many small shareholders rely on dividends to top up their pensions. The CWU say:

"Members across BT Group are being urged to write to their local MPs, expressing their anger and frustration at the double standards of a hugely profitable company that is imposing real-term pay cuts on frontline employees while splashing out hundreds of millions on shareholder dividends."

https://www.cwu.org/news/bt-pay-dispute-avalanche-of-political-support-for-striking-workers-as-union-considers-next-steps/

Have the CWU forgotten that many shareholders aren't rich, they rely on the dividends for income, and they went without any dividends during Covid. My pension's capped at 4.2%, no matter how high CPI/RPI goes, and I invest in dividend paying companies to protect my savings against inflation and supplement my pension income, yet the CWU talk about me as though I'm the enemy.

"I will, at the risk of invoking your censure offer one final comment , your holdings of BT , VOD and LLOY are heavily dependent on the UK economy and offer no diversification , why not consider a global ETF as a counterweight?"

In the last 30 years we have invested in funds, but their performances were underwhelming, even in rising markets, and over many years we lost trust in relying on others to make our investment decisions. We were lucky, because we did invest a substantial amount in a fund post the dotcom bubble bursting, which tied up our cash for 5 years; And fortunately for us, we cashed out of the investment fund a year before the Financial crash, and invested the money into a 2 year savings bond with the Halifax, paying a guaranteed 6% annual interest; The financial crash happened half way through the 2 year investment period and I wont deny it was squeeky bum time, as the amount tied up was considerably higher than the FSCS compensation threshold.
After all that we did look at funds again, around 2009/10, but the historical performances looked rubbish even pre-financial crash. When we went in and spoke to an adviser, I pointed out the 6% annual return we'd received on a savings bond outperforming even the best he had to show me, he looked dejected but shared the fact he'd personally taken a hammering due to the financial crash. We'd also been previously underwhelmed by returns from Endowment mortgages, and an Endowment fund we'd invested in.
For all the above reasons, we only invest in stocks where we have full control of the investment and receive the dividends directly into our accounts. I have zero trust in the managed investment world, and even though ETF's and passive's are cheaper these days nothing will get us back into investing in funds.

"OK that doesn't offer a formula but I don't believe one exists, a certain amount of logic, coupled with judgment has served me well. I have said elsewhere and maybe here that my strategy has been for many years now to aim for 10% over inflation per annum and have achieved that in all but 3 years of the last twenty odd."

"fibre rollout will weigh on profitability for some time and I suspect that until the shadow boxing between the other players is resolved by some sort of tie-up and the smoke clears the telecoms sector may tread water."

It's great if you can time when to jump in and out of stocks and achieve consistently good results, most can't and the ones who can are the exception rather than the rule. I'm currently sitting on paper losses on the three stocks I hold, BT, Lloyds, and Vodafone, but I'm on target to bring in dividends of around £21,000 over the next year; Including the Vodafone dividend, i'll receive £10,400 of the £21,000 before the end of September. My paper losses are due to being heavily invested over many years, but I have brought my average cost per share down significantly throughout Covid, and each of my holdings average cost per share are well below historic averages, so I'm not worried by my holdings current underperformance. I'm growing my holdings by reinvesting dividends while I perceive low prices, and I'm 100% sure my shares will show significant capital gains once the market decides to take it's foot off UK value stocks. Going forward, I've decided that I wont be injecting any more external capital into stocks, and will concentrate simultaneously running the share dealing accounts down, while topping up the ISA's.
As far as BT is concerned it's the stock I have most confidence in, not from a Revenue growth perspective, but from a Net Income perspective. Ofcom regulation has been responsible for much of BT's decline in revenue, through forced opening up of the Network; Companies like TalkTalk rely on regulation to support their whole business model, since their businesses wouldn't be viable without cost controlled access to BT Fibre and the Openreach workforce. BT's costs will come down dramatically over the next 8 years, so much so that they could easily undercut any of the current rivals and still maintain good margins, in my opinion. The market is short sighted in my opinion, and I don't think this risk on mentality will last forever. I believe the current market mentality is a bit surreal, when you consider the amount of cash thrown at useless cr@p like Crypto.