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I have sold gl all I have tried to understand the sense behind the future direction of AV but I can not get my head around it. I will probably trade it but in long term, I struggle to see a Brightside to a shrinking company.
I guess that why the old dividend rate was so important to the older shareholders it was the only light in a dark tunnel.
I do not get the new battle plan it makes no sense to me but AMANDA has thrown 1 million of her own money into it so she must believe in it and I hope she is a super smart lady that is really on the ball and pulls it of. and makes us loads of money.
All the profits from all the assets sales may cause institutions to buy in sending the share price up waiting for those special payments or buybacks. and the dividends beat the average for the FTSE. At least the new dividend rate will be safe with so much money from the asset sales and surplus.
I see this share price only going in one direction. I think we just need to be patient for the real value to be shown.
The past is the past let us look to the future. and hope THE NEW CEO AB is on the ball..
Today was a chance for AB/board and it was blown badly. Instead of getting 31p 31p 31p 31p 31p over the next 5 years costing AV per year 1.2 billion out of the 1.8 billion profit after tax. Instead, we are going to get 21p 22p 23p 24p 25p and some extra returns if we are lucky with a leap of faith. I know people say this was unrealistic but no one has said why. It is covered 1.5 times by profit after tax. Why was the change needed?
For every 100 million of profits that could grow in the future we will lose on asset sales to pay down the debt,
we will save like 50 million on interest payment while at the same time we have some of the best interest rates we are ever going to see in our lifetime for debts to the point where they say we to rebase the dividend due to lower-income.on our core 3 locations. due to selling of all the global assets cheaply during a pandemic. tho Singapore I think was a great deal at 18.4 x
Italy at 8.4x was not.
Total madness in my view.
total payouts per year
2019 was 30.9p
2020 so far 6p and maybe a special
2021 why is 26p too much to hope for as the cost of the dividend would be around 1 billion and AV made 900 million after-tax in 6 months so are likely to make 1.7 billion for year after-tax excluding assets sales. or surplus or debt.
There is no real reason the dividend needs to be cut at all.
A dividend policy review does not mean it has to be slashed by a 1/3 or more it would be a different story if the dividend was not covered.
Debt could be paid down a lot through asset sales not even taking into account the 12 billion surpluses.
20p would = 6.1 return v LGEN 6.7% return
AV surplus 12 billion-plus 1.6 billion and now 0.4 billion-plus profits with 10 billion debt. if I have read it correctly with another say 3 to 6 billion worth of assets up for sale.
Lgen surplus 6 billion and fewer profits than AV 6 billion debt if I have read correctly.
I would view 20p as a very poor outcome tho it may happen and it would not be a very good return for shareholders. compared to others.
While we are 20% under LGEN value we would be trapped by the dividend ratio to company value between us and other insurers.
AB said Our strategy is about focus and delivery. The sale of Aviva Vita is another important step forward as we reshape our portfolio and follows the recent announcement of the majority sale of our Singaporean business. We will continue to be decisive as we seek to transform Aviva for the benefit of our shareholders."
I have wondered what question at an AGM I would ask ect The questions I would ask if I could would be the ones I know I might tho very unlikely get an answer to, I know you never going to get a dividend question answered so I would not ask.
My lesson from the last answer and question session was tons of dividend questions were asked and brushed aside with a few second answers, then someone asked a green environmental question about office pollution and waste which lead to an in-depth answer lasting 20 mins from some excited board members.
So my questions would be.
1. Where does AB think the SP will be in 12 months do you expect it to be over 3.50 or 4.00 and should the share price and bonuses be connected.
2. What amount of debt /or percentage would be your goal when talking about reducing the debt.
3 Do you take on board what other companies in the industries are doing in comparison.
4 Would you ever consider increasing the debt even after it has been reduced to take over another company if the opportunity appeared.
I could think of lots of other questions but I doubt any would get answered it would be like asking a politician you ask one question they answer another.
You could be right but I think they got to beat LGEN dividend amount and some if they want the SP to ever increase further.
otherwise, why would existing investors stay.
LGEN has a 5-year plan we need to see something that can beat it on a 1 to 5-year plan there no point doing a real long-term plan due to the fact that the CEO on average are only there 5 years and the new CEO will have his/her own plan.
We are 20% below LGEN valuation if for argument sake we got a 6% return and our valuation increase to equal LGEN we would then only have a 4.8% return versus a 6.9% return from LGEN we would always be seen as the poor cousin to LGEN .
Why would new investors move to AV over the likes of LGEN
I am hoping the board come to the same conclusions.
Can you imagine what going to happen to the share price if we get a good dividend return policy?
Even tho it is very unlikely but if they came out with an 8% to 10% returns like the 26p to 31p dividend rate we would shoot up. Logic would suggest other investors from the likes of LGEN would return to AVIVA for better returns.
On the other hand, if they disappoint on the dividends and it comes in below the average for insurance companies for a reason like reduce the debt and run the company better ect we are going to have a few bad days.
No one knows which way it will go yet and even if they lose 1.2 billion divided by all those companies is not exactly going to break the bank for companies like LGEN AV. small insurance companies might feel it fairly hard.
No in my view
Even tho there are many other numbers that could make a huge difference that we/i do not understand.
If we were to look at it very simply
Why buy A company that makes under 400m a year after-tax with a value at near 7 billion+ if I have read it correctly.
Why at the same time if rumours are believed we are selling the french unit that makes 450m before tax and at a guess 350m after tax for the rumoured 2 to 3 billion. if this happens it would be totally insane.
A few have suggested that the EU conference on the 19th is the latest deadline for a Brexit deal as there are only 6 weeks left until we drop out and the clock is ticking down fast.
So with that thinking, we could see huge gains or huge losses next week.
If it does get pushed back again I would imagine it will only be for another week or 2 because after that the time needed to get it to pass every parliament would have run out.
So we have 4 possible big moving points on the calendar.
1 Brexit deal or not
2 french unit sale if it happens
3 results
4 oxford vaccine I think could still have a huge effect as many countries have brought it.
All these could have a huge impact over the next 6 weeks. we could be at 250 or 370 by the end of the year.