Member Info for fleccy

On Book and Off Book LSE reported trades.

On Book
Volume 192,630,997 of which 183,546,600 is Uncrossed Trade
Value £360,704,205.5 of which £343,683,589.7 is Uncrossed Trade

Off Book
Volume 5,986,333
Value £11,227,573.92

Not sure what's happened today, but trading volumes weren't high ON, or Off, Book. Most of todays trades were completed in Uncrossing Trade.
Any theories?

"Massive UT trade of over 183 mill @187.30 at close."

£360,690,161.70 on book today. I'll wait until 17:30 and then look at all the reported trades for today.

"But judging by the fact that you worked in telecoms for 30 years and are now contemplating waiting until the 2030s for a decent return on your BT investment, exactly how long do you plan on living? No offence meant. LoL"

I am getting a return now. On the 12th September the 5.39p dividend will be paid, so my BT investment will bring in £4,180.97, for that payout alone.

"Hi Fleccy, what target price do you have in mind? And time-scale? I would be happy with £3 per share, anything above this price I would see as a nice bonus."

In my opinion, £3 would be cheap, but I'm looking at holding for the next 10 years. I've come around to thinking that Targets are part of short term goals, and my current thinking is to hold until BT has completed it's restructuring, which will likely be the early 2030's. I might change my mind if BT does something radical, like splitting off Openreach, as then I'd have to reassess the remaining companies. Usually when companies split, it doesn't bode well for long term share prices, but can bring a good price at the time of the breakup.

"The 'super' tax deduction - a great benefit"

In the short term definitely, but I'm more focused on the long term savings. If I'm correct, BT will see huge operational cost savings from the move to FTTP/Cloud, since Passive Optical Networks require much less maintenance/Power requirements/Equipment to offer service.

"that means i will as well. I have had shares in BT since privitisation on 6th August 1984 in my earlier days of investing when a £1,000 investment was a big investment for me."

BT's restructuring around PSTN switch off, Exchange closures, and convergence, will result in massive cost savings for BT, adding to their bottom line. Also, if I'm understanding it correctly, the secondary affect of the Exchange closures will reduce lease liabilities which add about on third to BT's debt. When BT did the sale and leasback deal with Telereal Trillium, part of the agrrement was that BT would get a cut of the sale price on the vacated properties, and property values have increased a lot since 2001.

" Upon BT’s vacation of assets, Telereal Trillium seeks to realise value from the properties, often enhancing value by obtaining planning permission for change of use or redevelopment. BT is aligned in this objective as value enhancements are shared between the parties."

https://www.telerealtrillium.com/about-us/case-studies/bt

"I have a low average. I may consider to sell a small amount again at over £2, not because of thinking it overpriced but simply to reduce the number of shares that i have a little bit and of course reducing my average price a bit more."

I first started investing in BT around £3, and it was a hefty purchase. My average price per share is now around 198p, after top ups. I currently hold 77,569 BT shares and expect dividends to come in over £6000 in the current tax year. I've got no intention of reducing my BT holdings, at all, and I expect to see very large capital paper gains in the coming years. I've given my reasoning in many previous posts, why I see BT as an absolute bargain basement share at current levels.

"In more recent times I have bought at about £1, and my last purchase was at about 140p"

I've been topping up BT throughtout the pandemic. Bought £15,000 at 106p and a further £20,000 at 112p, I think it was that way around without checking my dealing history. I've also done some top ups from dividends, so I realise about BT's undervaluation. If you look through my posting history, you'll listen to the repeating broken record, of me saying that BT's undervalued.

"undervalued/Undervalued"

Meant undervalued/Overvalued Freudian slip lol

"because BT is way undervalued, which is why Drahi has taken a big bite."

BT's been undervalued for years, and has been higher than £2 since Drahi bought his original stake, but that didn't stop it dropping back. Drahi bought his stake in June 2021, and since then hit 205p at the end of June 21, then dropped to the 130's in Oct 21, back up around 200p by Feb 22, back down to the low 160's in Feb this year. Clearly undervalued/Undervalued doesn't currently impact the share price in a meaningful way.

"Large number of buys coming in."

Anyone know what's driven up the price up 3.59% currently? I can't imagine the Ericsson 5G story would have such an effect. Stories about 5G private networks aren't something new, and I'd expect other companies to be competing in the same space.

" I myself are expecting people to go out, there’s a large number of engineers behind the CWU on the matter"

When a strike takes place an employer is under no obligation to continue paying strikers wages. When on strike, strikers also lose pension entitlements for the days not worked. Why would the lower paid staff, who are doing well out of the current pay rise strike?

"Running the numbers
BT further argued that its current pay rates “compare well” against competitors, with the £1,500 increase representing an 8% rise “for some colleagues”. It noted that even its highest-paid frontline workers will see their salary upped by more than 3%, which is “still above the UK average”.

Research would appear to back up BT’s claims. The Winter 2021–2022 edition of the Chartered Institute of Personnel and Development’s (CIPD) Labour Market Outlook found that employers expect median basic pay awards to be 3% in 2022. Various other research projects delivered similar figures.
It’s worth noting, however, that any employee granted an 8% increase would previously have earned less than £19,500 per year. Meanwhile, the highest-paid would have made just under £50,000."

https://www.telcotitans.com/btwatch/industrial-action-inbound-as-union-rejects-biggest-bt-pay-rise-in-20-years/4710.article

I worked in Telecoms for well over 30 years, and do have a final salary pension, but my pension rise is capped around 4.2%. If 10% pay rises become common place, it will cause a wage/price inflationary spiral seeing most pensioners being driven into poverty, I wont be one of them. The only real tool the BOE has to fight a wage/price inflationary spiral is to raise interest rates, which will result in much higher mortgages, with mortgage holder given a massive bashing; With BOE base interest rate currently at 1 %, imagine if that rises to 3% potentially leading to mortgage increases up to 3 times the current level.

https://www.bankofengland.co.uk/boeapps/database/Bank-Rate.asp

https://www.macrotrends.net/countries/GBR/united-kingdom/inflation-rate-cpi

BT are offering a fair pay rise imo, the employee's would be foolish to go out on strike, as it could lead to severe consequences should they win a 10% pay increase; This would lead to pressure on other UK companies to offer similar, and we'll be back to the 70's/80's. The Government/BOE will discourage companies from offering inflation busting pay rises; The Unions are trying to open Pandora's Box.

"Cashback for holders ~ rehome it ."

That would depend on the valuation the market places on the individual enities, like the Halifax for example. To break up a bank probably wouldn't achieve good prices for the parts, so it'd be a risk for the shareholders. The scale of Lloyds is what allows it to spend on other things.

"Lloyds should be thinned right now , break it up ."

What would that achieve?

Thanks for posting the article Larry. The article makes some interesting points.

"While Ofcom's measures to stoke competition have proved successful, building blocks must now be put in place to ensure customers benefit from rich rewards of full-fibre, without an over-reaching broadband network taking them offline."

"However, James Barford, of Enders Analysis, gives a more sombre assessment. The large alt-nets he has analysed remain stuck in the red.

"Some of them may start to run out of money. They will all have a certain amount of debt funding, and there will be covenants on that debt, which will be the trigger point,” he says."

""There is also an issue with consolidation. We are talking about companies that have got significantly less than 300,000 homes passed - some of them less than 50,000.

"Is it worth doing an acquisition for a company that is just a few weeks build time [for bigger players]? Some of them are just too small to be worth the bother.""

So Ofcom have regulated Openreach to such an extent Altnet investors think they can profit in a big way, but scale matters in Telecoms. When it comes to the isolated rural Altnets, if they fail there's only Openreach to step in since backbone connectivity costs will make them even more uneconomical. To run a network you need to either buy, or rent, building space; You need Engineering resource to monitor and maintain the network; There are Equipment costs, as well as power/aircon/etc costs. Churn would be a problem for small Altnets as competition grows and Openreach overbuild their areas, since the popular CP's, like Sky, may tempt customers away from the Altnets.

CityFibre are building to scale up as quickly as they can, and they need to, as a successful wholesale business will require a good geographic coverage, and a large pool of premises passed. The problem for CityFibre is that Openreach are fighting back with offerings like Equinox; Cityfibre are awaiting judgement on the court case against Ofcom, attempting to stop the Equinox offering, but Openreach are arguing that Equinox is required to encourage CP's to move from FTTC onto FTTP, and Ofcom have accepted Openreach's view. Clearly the Altnets are skating on thin Ice, and relying on the regulators to stop Openreach competing in a meaningful way, but they'll only get away with that for so long.
BT/Openreach are building out FTTP faster than anyone else; As the build progresses, and customers migrate, it allows BT to make incremental cost savings, and by the early 2030's BT will be much leaner with less debt and a healthier bottom line; I'm talking about the PSTN switch off, exchange closure program, less lease liabilities, and the associated cost savings from a converged network with a much smaller building footprint. There's a lot to like about BT, i'm not so sure about the competition.

"God help the share price if, as a result of the review, he decides that investing his money in BT isn't getting him where he wants to be and so decides to sell his 18% holding !!!."

Highly unlikely they'll force him to sell. At worst, they'll block him from buying any more, and put conditions on who he can sell his stake to in the future.

"A report from investment bank Jefferies on BT Group, following a briefing by BT Consumer division’s CEO Marc Allera, quotes him saying that BT is focused on value over volume, and that there’s no intention on seeking increased market share."

https://advanced-television.com/2022/05/26/bank-bt-seeking-value-over-volume/

It's also interesting this happens the day after the CWU ballot timetable announcement. You'd possibly think, what does this have to do with a BT strike ballot? But there's legislation around strike action, affecting companies classified as an essential service and important to National Security. Should the CWU win a strike ballot, there's a possibility the Government may limit the action due to BT being classed as an essential service provider.

" cannot see that acquiring 18.1% of BT means that Altice has "taken control" and hence I can see this as no more than a warning shot by HMG, and a warning shot which is outside of the powers granted by the act."

"Trigger events: holding of interests and rights"

https://www.legislation.gov.uk/ukpga/2021/25/schedule/1/enacted

Maybe the Government know something we don't. Is Altice operating alone, or are there others accumulating stock in the background? Something's triggered this, and it could be something outside of the public domain.

I suspect the acquisition will be cleared, but this is possibly about sending a message to potential vultures.