Member Info for fleccy

It's an ETF that allows investors to bet on the Vodafone share price. A 1% drop in Vodafone share price adds a profit of 3% to invested capital, whereas a 1% increase in the price subtracts 3%. I would say it's a risky bet with Vod's share price being so low. All it would take is for the share price rise to 130p, from the current price, and you've lost 30% of your invested capital.

"VOD is not in value territory yet. I would tred carefully putting more in here."

Vodafone just reported €11.101 Billion revenue, in a single Quarter where roaming revenue is still suppressed. Full year EBITDA is "expected to be between €15.0 – €15.4 billion and adjusted FCF of at least €5.2 billion.
Apart from the recent Covid drops to around a Pound, the share price hasn't been this low since the 1990's. I would suggest there is value in Vodafone's current share price.

"The reported profit before tax was £536 Million, and profit after tax £2 Million."

It was getting late when I posted, but just to add to the above.
Reported profit before tax was £536 Million.

"Reported profit after tax £2m, down £446m, due to a one-off tax charge in the quarter.

That gives you everything you need to calculate the Net Profit Velo:

Tax for Quarter = £(536 - 446 -2) Million = £88 Million

Net Profit = £(536 - 88) Million = £448 Million

Or you could have just added the reported Tax charge

Net Profit = £(2 + 446) Million = £448 Million

"Can't say if all quarters will be "bad" until we know what the actual Q1 net profit was before the new tax charge.
BT have declined to state it - but leave you to fumble about with pre-tax profit etc, never ever stating the exact tax charge either; deliberately in my view."

The reported profit before tax was £536 Million, and profit after tax £2 Million.

"The Indian government is still not happy with the international court's ruling and they have appealed against the order. It will be already lucky if they stop asking for the ? 22,000 crore"

seen_it_done_it, If the Indian Government rescinds the retrospective tax law then Vodafone has nothing to pay. The appeal against the previous Singapore ruling, will just go away, as there will be no case to answer. It wont help VI though, as their Government debt is in relation AGR dues and spectrum fees. This helps Vodafone, not Vodafone Idea.

"does this mean vodafone idea can survive?"

From what I've read, Vodafone fought against paying the tax all the way up to winning an arbitration case last year. The Indian Government might be on the hook for paying Vodafone's legal fees, but not much else. Unless Vodafone Group have some sort of backroom deal, with the Indian Government, to inject more money into VI, I don't see this helping unless I'm missing something.

"This isn’t purely about opportunism. There’s something broader going on. Drahi’s appetite for telecoms assets extends beyond Altice — he’s amassed a 12% holding in the U.K.’s BT Group Plc. Other private buyers are sniffing around too. Witness U.S. buyout firm KKR & Co.’s deal for a piece of Telecom Italia SpA’s fiber business and EQT AB’s interest in Royal KPN NV. Yet there hasn’t been a really big takeover that has encouraged investors to push up the value of the sector as a whole in anticipation of bids. So bargains persist.

The simple explanation is that the public market doesn’t look beyond short-term cash flow, as Iliad Chief Executive Officer Thomas Reynaud has pointed out in his own defense of Niel’s buyout offer. Right now, cash returns in telecoms are being dampened by capital expenditure and shareholders don’t believe this investment will ever generate a decent payback."

Probably the same thing I've been banging on about for years.

"Europe’s billionaire telecommunications tycoons are doubling down on an industry the stock market has all but abandoned, bidding to take full control of the firms they founded. Investors may end up kicking themselves for selling out to offers that aren’t as generous as they look.

Xavier Niel’s bid to buy out the roughly 30% of Iliad SA he doesn’t already own follows fellow billionaire Patrick Drahi’s move to take Altice Europe NV private earlier last year. The share prices of both their creations had fallen sharply in the run-up, helping the buyers present their takeovers as containing outsize premiums."

https://www.bloomberg.com/opinion/articles/2021-08-03/france-telco-buyouts-xavier-niel-and-patrick-drahi-see-something-you-don-t

"net debt increased from €403 Million in FY20 to €2.277 Billion in FY20"

Another typo, Doh. Should be:

net debt increased from €403 Million in FY20 to €2.277 Billion in FY21

"As a tree shaking exercise It wouldn't surprise me if there was announcement from BT that the dividend will continue to be suspended in a bid to test the patience of the long term holders into selling."

I'd agree with you, apart from the fact that they've confirmed the dividend is restarting for the current financial year. It wouldn't surprise me if they delay it as long as possible though, and lump it into a single Final Dividend to be paid in the next financial year lol.

"One thing I can say about Ryanair ...it is run by a team who are very decisive and have few fears about making any big decision they need to do ....the City likes that"

Pokerchips, Ryanair is currently massively overvalued with a Market Cap of around £16.2 Billion, in FY2020 they generated revenue of €8.4948 Billion with operating expenses of €(7.3674) Billion, so only generated a net profit after tax of €648.7 Million. In the preceding years, RYA actually generated less revenue, but their bottom line profit was better Mar 31(2019 € 885.0 million, 2018 1.4502 Billion, 2017 € 1.3159), It's all in their annual reports. In terms of operating margin (2021 (51)%, 2020 13%, 2019 12%, 2018 23%, 2017 22%). According to RYA's annual report, they made a loss of €(1,015) Billion in FY21, and net debt increased from €403 Million in FY20 to €2.277 Billion in FY20. I like to use RYA, as it's an easy example of the way the market skews stock valuations to suit a certain narrative. If BT had sustained losses comparable to RYA's, it would be sitting around 50p currently. Another thing I find interesting is the way articles mention the new "Gamechanger" 737 MAX Aircraft RYA are purchasing, but never make any mention of the cost, yet virtually every article mentioning BT's FTTP rollout manages to slip in the £15 Billion upgrade cost. Do you get my point?
It doesn't drive me nuts looking comparing Apples and Oranges, it gives me clarity and confirms my view that the market is nuts. There are examples of crazy valuations everywhere, I'm ploughing my money into stocks where I see value, not stocks that are pumped by market irrationality. I suspect RYA has been helped by low volumes, but it'll be interesting to see what happens after the summer holidays end.

The more I read that article, the more it looks like a it's been written to drive negative sentiment. Some of the comments are total BS in my opinion.
He says:
"We believe that Openreach will deliver strong growth in the coming years, as a result of its investment in the rollout of fibre-to-the[1]premises (FTTP) to 25m locations by 2026, up from 5.2m today,”

Then contradicts :
“However, believing that Openreach will face increasingly stiff competition over the long term from Virgin Media (NASDAQ:VMED) O2 and other alternative networks, we forecast for Openreach’s revenue and EBITDA growth to stagnate in the second half of the decade.”

Where does he buy his crystal ball? Talk about pure guess work, how does he know the altnets wont go bust? Since economies of scale rule in Telecoms. He totally ignores the amount of debt VM/O2 will be carrying, and increasing with their upgrade plans, and the fact that they'll have to run two network hierarchies side by side, DOCSIS and PON. In some respects he is correct though, since much of Openreach's revenue is internal, coming from BT to finance the FTTP rollout, therefore enhancing Openreach's revenue within the group, but it's a zero sum game as far as BT as a whole is concerned. Once the FTTP rollout is completed, Openreach revenue will come from maintaining the network rather than installs.

They also say:
"The European bank in a note, following financial statements released on Friday, highlighted that it values BT at around £20bn."

£20bn??? Lol. This suggests to me that they have no idea how to value Telecom stocks, and are just making it up in my opinion. It's reported VM/O2 combined will have an enterprise value of around £31 billion, generating half the revenue BT is now, yet Berenberg put a value on BT of £20 Billion, do they realise that BT own EE which is worth £12 Billion alone? If Openreach is worth at least £20 Billion, and the other parts are worth say £10 Billion, conservatively BT must be worth at least £40 Billion imo.
No mention of BT's cost cutting plan to save £2 Billion annually from 2025 onwards.
Some will the pension's an issue, but the agreed triennial pension deficit of £7.98bn, is an estimated figure with the IAS 19 (true) deficit on the 31st March actually being £4.2bn; I don't see the pension as an issue going forward, and I totally disagree with Berenberg's valuation, they're having a laugh imo.

"Berenberg rates BT as a ‘hold’, with a 175p price target – against a prevailing market price of 174.4p."

https://www.proactiveinvestors.co.uk/companies/news/956630/bt-groups-openreach-revenue-will-stagnate-in-second-half-of-decade---berenberg-956630.html

Does this mean the big players are about to buy more? That's what I assume when I see negative contradictory articles like this.

Berenberg downgraded BT to hold on the 20th May and the closing price for that day was 170.85p, BT then closed at 205.6p on the 17th June; A climb of nearly 36p (20%) in 28 days after Berenberg downgraded the stock. If they downgrade BT, maybe it'll worth over £3 in 6 months time.

"but... the SP here (and in Glaxo and Shell etc) is based on the PERFORMANCE of the assets ..and at present (with current economy issues etc) "

The P/E doesn't support your "PERFORMANCE of the assets" view, since BT is clearly undervalued, and as far as your "at present (with current economy issues etc) " view, how do you explain the share price performance of companies like Ryanair?
The market is punishing Telecom stocks for no apparent reason, apart from a constructed narrative around return on future investment. What the market doesn't seem to get, is that the 5G and FTTP upgrades will be the last for generations; There'll be some evolution as far as data rates are concerned, but I can't see any substantial future upgrades from here. Fibre can cope with Terabit data rates, so OLT/ONT replacement will take care of any future increases in access network data rates. 5G will take care of any mobile bandwidth requirements, and 6G will be like WiFi for stadiums, Train stations, Airports, Shopping Centres, etc, since 6G will have limited line of sight uses due to the Frequencies used, complimenting 5G not replacing it.
The reason I mentioned Ryanair is because their share price is back at Pre-Pandemic levels, even though they've seen Billions in cash burn, issued shares, and suffered losses. Ryanair has also committed to purchase at least 200 737 Max "Gamechanger" Aircraft, which would cost around $24 Billion at list price, probably around half that with bulk discount. Using your reasoning, how do you explain anomalies like Ryanair? Seems to me that the market makes assumptions on flawed reasoning and herd mentality, the 2008 Financial crisis proves that. Anyone who says that that markets and stocks aren't manipulated should watch the film The Big Short, where investment banks and credit rating agencies conspired to conceal the risks, and prop up prices of the investments in an attempt to reduce their own losses; Nothing's changed since then, the House still plays with stacked decks.

"Hey Nige & Co. See you're still crawling up fleccy's derriere!"

Rod, we all know you're the only one on here interested in derriere's.

"See Meggitt ( who are involved in Military defense systems ) have had an approach this morning"

I saw that, and I have to admit I don't know much about the company, but Parker-Hannifin must see something they like. It will probably be another nail in the UK's manufacturing coffin, should the Government allow it to go through.

https://www.reuters.com/world/uk/parker-hannifin-buy-british-engineer-meggitt-63-bln-pounds-deal-2021-08-02/

Meggitt have said:

"Parker-Hannifin said it will offer legally binding commitments to the British government on its role in the country.

The U.S. company will continue to meet its contractual obligations for goods and services supplied to the government, keep a majority of UK nationals on Meggitt's board and maintain the company's UK headquarters here.
On jobs, it said it would maintain Meggitt's R&D, product engineering and direct manufacturing labour headcount in the UK at no less than current levels, while increasing by at least 10% the number of overall apprenticeship opportunities."

Personally I don't believe any guaranties, under these circumstances, and just see this as the continued asset stripping of UK PLC. If this continues, the country will own nothing, patents will go abroad. I believe a lot of small companies are tied to Universities, with research into various new technologies, they dissappear abroad too in many cases.
I see Meggitt have a section dealing with advanced composites, and many other things. I looked on their website 30 minutes ago, I can't get on it now. It's probably swamped by people checking it out to see what the US company is eyeing up.

"The question is will someone snatch bt from drahi before he can make his move advfn are talking £4 , £5"

I doubt Drahi is after taking over BT, I think he may have other plans. He may, or may not, increase his shareholding toward the 30% threshold, but Openreach could be the focus, not a takeover. Get enough stock held by different institutional investors, and they could team up to force changes without taking over the company. The Government could stop any potential takeovers, but I'm not sure how they'd deal with activist investors, with big equity stakes, pursuing an agenda to force the board into making changes.
It's been reported on quite a few occasions that private equity is eyeing up Openreach, time will tell if that's the target.

" Is Drahi still allowed to add to his 12.1% of BT shareholding, or would he have to wait to disclose any additional BT shares?"

I can't see how he could be stopped from increasing his holding, he just wouldn't be allowed to approach the company, or other shareholders, with a view to taking over the company. He would have to declare any increase in his holdings though, and the market would then form its own opinion based on any increase. In view of the fact his announcement of a 12.1% holding appeared out of the blue, how would we know whether, or not, other parties are accumulating shares on his behalf?

"The business world has gone mad."

Indeed, but RYA are trading up on really small volumes. It will be interesting to watch what happens as the volumes increase going into the Autumn. Much to the annoyance of the RYA regular posters, I enjoy watching RYA, as their share price appears to defy gravity.

"If we are back in constant £2 territory by autumn, and high £2 territory in December, when Drahi can say more, I’ll be happy with that."

I've had a look back through the holdings in company, going back to the 15th Jan 2020 , apologies if I've missed any.

Blackrock.. Holding
15/01/2020 5.24%
27/01/2020 5.25%
Currently
08/06/2021 6.41%

Norges Bank Holding
06/01/2021.. 3.002%
Currently
10/06/2021.. 2.97733%

Altice (Current)
10/06/2021 12.1%

Morgan Stanley
26-Jul-2021 5.022054%
Currently
27-Jul-2021 0%

You'd think there was some way of seeing how Drahi accumulated his holding, adding in the 4.6% trade 7th June 2021, but it's impossible to match any figures lol. The recent Morgan Stanley notification is interesting, because it came in and immediately left them the next day.