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I'd like to know if there's any "small print" to this announcement. What is the timescale for the divestment ?
At the moment a week is a very long time in politics. We've always known what Russia is like (riddle inside an enigma etc). The West's (and Ukraine's of course) problem is primarily with Vladimir. If he goes then everything might change very quickly.
As far as I can see the immediate effect is an accounting exercise - with substantial write downs but no impact on cash flows.
The more concerning thing is the forced sale - who is going to buy and at what price. The share price will surely be hit with the market anticipating a fire sale.
This was to be expected with the current political situation but is it actually sensible ? If it means that Russian companies by one way or another (eg no willing foreign buyer) getting 100% of the dividends rather than around 80% isn't that more money for tanks and guns ?
OliGarch, had a look and agree that the scheme is well funded. Can't have everything I suppose but I see that they forecast an annual slug of £400 m or so on an ongoing basis to the scheme. That's quite a big proportion of annual earnings but so be it. At least it's a well defined liability - so hopefully no Rumsfeld knowns / unknowns.
The share price is becoming quite interesting. 1) Balance sheet value of the property portfolio and 2) parcels could well become a long term growth business (with associated P/E rating) based on pandemic behavioural changes and online business growth
Results look to be exactly on trend to me. Can only assume the analysts had pencilled in something slightly better.
You can never tell - yesterday I expected GSK to take a bit of a hammering, market shrugged its shoulders. Today it's RELX that gets a little kick.
Impressive numbers, slightly better than I was expecting.
I have to say I have some doubts about their aims - net zero by 2050 including customer end product use. The latter is at
partly outside their control eg for what and how efficiently will customers use the energy supplied.
Quite a few companies like APF in Canada and Australia but as far as I know it's more or less unique on the FTSE.
I like the business model a lot - so many tiddlers try to play with the big boys and set up operations (and big commitments / debts) only for the ambition to come undone. Their agility has enabled them to refocus at minimal cost.
I'm slightly sceptical about all this transitioning and future commodities bandwagon - but it's beside the point. These commodities are in demand today and will grow almost regardless.
I think the big picture read across is just how undervalued major sectors of the UK stock market are such as pharma, energy, supermarkets etc
Putting only a measly £50 bn on the consumer healthcare business and converting this group's profit share to the pharma division leads to a market cap way north of where we are now.
Private equity etc will continue to snap up UK assets unless and until market valuations go up.
RE: Listing
The position regarding BHP stock is clear - no longer a FTSE100 constituent but otherwise business as usual.
What I still don't know is the situation regarding the merging of the oil assets with Woodside. Woodside said they were considering a London listing at the time of the announcement but am unaware of any further news. If they do list then all potential problems solved.
However if they are just listed in Aus my broker has said they will be unable to hold. The question then arises what is the procedure at the demerger eg will BHP set up a facility to buy (a capped number of ?) Woodside shares - effectively a cash alternative - or will you in effect be obliged to sell BHP prior ? Not entirely clear.
This is not an urgent matter though. The BHP share reorganisation is scheduled to complete some months before the Woodside deal.
Nearly fell off my chair when I saw this. Pragmatism from the EU what's going on ?!
You can have your own views on climate policy and the energy transition but at last we have some thinking that is consistent with the stated aims. Transition will take decades not months or years - therefore it makes sense to do the next best thing in the meantime. Let's hope the UK govt grasps the nettle as well.
The activists will protest of course but the return of serve is that it is better to supply your own gas than import from someone else. Better economically and better environmentally (transportation, governance standards etc)
1 - top notch results look at that operating cash flow
2 - minimal damage from COP
3 - corporate streamlining
It has to be said that it's also a huge boost for the UK what with all the brexit scaremongering and so on
Good results though not as impressive as Shell last week. Predictable knock back by the market.
Similarly trying to keep low profile for COP by writing down assets for lower headline profits. Plus maintained divi and paying off some debt instead.
You could not put a more low key slant to these results if you tried. They've thrown the kitchen sink at it but you can't hide the fact that RDS have achieved $16 billion of operating cash flow in 90 days or so. Impressive.
It can't be done and BP should give up on this strategy
Seen it all before with diversification attempts - stick with what you're good at. We know that petroleum will be in demand in quantity for at least the next 30 years. BP should do its bit to satisfy that demand, not surrender to environmentalists and cede an even larger share of production to OPEC, Russia and the like
I think Shell is closer to the best strategy. Natural gas / LNG has lower emissions, is cleaner and has more options for any energy transition eg hydrogen either grey or blue with carbon capture.
Can't remember where I saw it but there was an article saying we don't understand why oil companies aren't down even further what with droves of investment managers, pension funds etc now avoiding them
It's just another example of the media and the metropolitan bubble living in their own world
Share buybacks may or not be good value for the shareholder - depends on whether in hindsight they bought at the right price. Amazing how many times it turns out wrong.
Dividends are better - just need to ensure enough cash left in the company for a strong balance sheet, contingency and investment opportunity. Doesn't really matter what the share price is.
Because buybacks are double edged you can only assume they're so popular because they prop up EPS.
How about this for a thought
Oil companies are playing the game of climate change to keep the activist wolf from the door but BP seem to be going
a bit further - relative to their size they're talking about significant investments away from petroleum. Compare with the more conservative approach of US oil and even Shell. Shell is less in oil but is very heavily weighted on natural gas
On the other side of the coin it is not being rewarded by the green investor - their argument would be that there are more credible environmental investments out there.
A case of falling between two stools ?