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Beaufort Securities confirms ‘buy’ recommendation On Tuesday, Beaufort Securities reiterated their ‘buy’ rating on Saga. Proactive Investors quoted the analysts as pointing to the loyalty of the group’s customer base which set Saga apart from its peers. “This provides the business with a distinct advantage and provides confidence in its forward visibility,” the analysts said, adding that the market would “recognise these facts in due course”. “Beaufort accordingly recommends investors take advantage of Saga’s lowly Admission price, to build their IPO allocations up to a realistic level by paying up to 210p/share,” the analysts wrote, as quoted by Proactive Investors. http://invezz.com/news/equities/11241-saga-share-price-claws-back-losses-in-early-morning-trade?utm_source=Alert&utm_medium=Email&utm_campaign=IPOs:SAGA:30052014

In the main, yes ... but they put the IPO through Capita.

Their share dealing service is a shambles.

... could be the opening price ... just a thought ... but, as always, DYOR

... for everything, (as they say) ... and, with all the negative press over the long weekend and the resultant dip, I believe this is a good time to top up. As always, DYOR though.

Ring any bells ..? Britain's seventh-biggest high street bank will attempt to lure investors with an offer of free shares when it unveils plans for a £1.5bn flotation on Tuesday. Sky News has learnt that TSB will tell retail shareholders who hold onto their stock for at least a year that they will receive one bonus share for every 20 they acquire in one of the City’s biggest stock market listings so far this year. http://news.sky.com/story/1269319/tsb-lures-retail-investors-with-bonus-shares

This may involve some capital, but that's not the main reason why it makes sense for Saga to go public. This is instead the high degree of overlap that exists between stock pickers and wealth-management customers. If Saga wants to build its brand with the latter, what better way than to generate hype among the former with an IPO? Just as people are more likely to invest in a company they know at a consumer level, they are more likely to consume the services of a company in which they invest. Saga has made the link between its customers and its potential investors unusually explicit. It has offered its customers a deal on the stock: they receive 21 shares for the price of 20. And it is offering between 30 and 50 per cent of the stock to individual investors - far more than is common. Most flotations these days have no 'retail' element at all; even Royal Mail (RMG) gave four-fifths of its stock to institutions. The same overlap between customers and investors explains why so many online stock brokers are public companies, despite their limited capital requirements. Publicity, as well as succession planning, was the main reason for Hargreaves Lansdown's flotation in 2007. The most recent addition to the fold is Plus 500, which listed last summer even though it had net cash on its books. This is part of a long-term stock market trend. A century ago, the London Stock Exchange (LSE) was dominated by capital-intensive sectors like mining, shipping and railways, which needed public equity to fund their expansion plans. But as the British economy has moved away from its Victorian role as the world's workshop to focus on the provision of services - which typically require little capital - the stock market has gradually turned into a public-relations machine. It would be hard to prove it empirically, but this may have lowered the risk profile of equity investment. Stock pickers can still give their money to speculative mining ventures, but they can also entrust it to companies that could, if they wanted, fund their own growth. Welcome back, Saga. http://www.investorschronicle.co.uk/2014/05/20/comment/chronic-investor-blog/saga-the-stock-broker-2zQGeusuzSYJV4YB6QblJP/article.html?utm_campaign=ICDailyEmail_2013&utm_source=emailCampaign&utm_medium=email&utm_content=

Why is Saga going public? On one level, the answer is obvious. The existing private-equity owners - Charterhouse, CVC and Permira - want to realise their investment. And, as usual with private-equity flotations, the share sale is also an opportunity for Saga to restructure its balance sheet, which is currently too debt-heavy for most public shareholders to stomach. About £550m of new money is to be raised, which will reduce net debt from £1.25bn to £700m. But the listing documents also give a more subtle reason: to build the brand. "The company is making the offer in order to raise further consumer and investor awareness of Saga," states the share prospectus. This is particularly interesting in light of a growth prospect the directors seem excited about - wealth management. They cite "the increasingly complex financial planning needs of [Saga's] customers, the need for a trusted brand in the space, and the high proportion of household wealth held by the over-50s demographic". The size of the market, they estimate, is about £14bn, "based on an assumed 2 per cent management fee on an estimated £700bn of over-55s financial wealth". Saga, it seems, wants to slip into the gap being vacated by high-street banks on the one hand and independent financial advisers on the other. Both these groups have come under attack from regulators. Banks are closing branches because higher capital requirements are depressing their profits. IFAs are closing because the Retail Distribution Review, which banned commission payments, has made old-school sales businesses unviable. The end of compulsory annuities, announced in the March Budget, only adds to the market's attractions for Saga. Pensioners can now choose from a vast array of different investment and drawdown options. That choice will require advice. Saga's opportunism has precedence. The company started out in the 1950s by offering package holidays - then a major growth industry - and listed on the stock exchange in 1978 as Saga Holidays. That eventually provided a platform for its diversification into insurance, which now accounts for about 70 per cent of profits, before it was taken private again by the founding family in 1990. The company already offers some investment services, having received a license to offer stock broking on an 'execution-only' basis in 1996. But its platform, Saga Share Direct, is actually provided by Barclays Stockbrokers. A big push into wealth management will presumably involve setting up an independent operation. (Part 2 in next post)

... at discount stores as shoppers flood in for bargains. Discount stores have seen their sales soar by a massive 30 per cent in the past year as shoppers flood in for bargains. The boom at budget stores rams home the fact that households are still having to count the pennies. At the same time, the bargain hunters are putting pressure on established stores, which now face an unprecedented threat. Statistics compiled exclusively for The Mail on Sunday by Barclaycard show total spending was up 3.7 per cent last month compared with April 2013 – well ahead of inflation. However, Barclaycard warned that the figure could be a ‘seasonal blip’ prompted by a late Easter and warmer weather. The report detailed spending at discount stores for the first time since Barclaycard began publicising its research last year. The sector encompasses pound stores, cut-price supermarkets and cheap clothing retailers. Barclaycard would not reveal details of which groups are covered by what it calls its Value Index, but they are thought to include the best-known high street names in discount retailing. Val Soranno Keating, chief executive of Barclaycard, said: ‘Though many economic indicators continue to paint a positive picture and the talk is of a recovering economy, the improvements are yet to trickle down and positively impact on household budgets. ‘Lack of wage growth has acted as a brake on consumer spending for a long time, and though there are signs that it could finally be improving, until we see several months of real wage increases consumers will likely remain cautious with their spending.’ The figures were revealed after Poundland announced last week that sales were up 13 per cent. Tesco hit back, saying it would introduce ‘pound zones’ in 300 stores. The biggest gains in overall sales among all retailers were in family clothing – up more than 21 per cent – and garden centres, where spending rose by more than 20 per cent. Growth in online sales was slower than the trend rate seen in the past year, but the rise of 5.8 per cent meant it still galloped ahead of spending growth in stores. Barclaycard estimates that its figures cover about half of all credit and debit card spending. http://www.dailymail.co.uk/money/news/article-2625145/Cut-price-Britain-sales-soar-30-cent-discount-stores.html

... make some money.

"We're in the money ..."

European equity capital markets leapt into 2014 with their strongest annual start since 2007, Thomson Reuters data showed on Friday, as a glut of initial public offerings helped business surge 38 percent on the same period last year. European IPO activity has more than tripled year-on-year to $12 billion, helped by the flotations this week of Denmark's ISS and Britain's Poundland among others, as investors rush to cash in on the region's nascent recovery. Global proceeds from stock market listings have more than doubled in 2014 against the same period last year, up 113 percent to $37.1 billion. "Today the IPO route is open to vendors - this was not the case two years ago," said Gareth McCartney, Head of Equity Syndicate at UBS. "The IPO story is one of restocking the pipeline post the financial crisis, when this route for vendors was effectively closed." http://www.reuters.com/article/2014/03/14/investment-banking-activity-idUSL6N0MB1HN20140314

From Hargreaves Lansdown on Tuesday: Strong investor interest in Poundland means the British discount chain is likely to be valued near the top end of its flotation price range on Wednesday. Institutional investors are thought to have been queuing up to buy shares in the group, which has about 500 stores in the UK selling items for £1. A late rush may leave the chain, led by Chief Executive Jim McCarthy, potentially up to 10 times oversubscribed by the time the offer closes on Tuesday night.

Shares of single price value general retailer Poundland performed well on their first morning of trade, with shares rising to their best level of the day, at 392p, by early afternoon. Standing 31% higher from their initial price on Wednesday morning, the company's market capitalisation rose to approximately £980m. Over the 52 weeks to March 27th, income was at £880.5m. Hence its price-to-sales (P/S) ratio at the time of its float, at 300p, was about 0.85 - a level often considered relatively conservative by investment bankers. US outfit Dollar General, for example, trades at a P/S ratio of about 1.08 based on its current market capitalization and latest full-year figures and Family Dollar at about 0.68. Factors to be taken into account when comparing sector peers include: each company's share of their respective markets, relative competitive environments, growth outlooks, relative stages of growth and any unique attributes of each firm's business models. http://www.hl.co.uk/shares/stock-market-news/company--news/poundland-soars-on-first-day-of-trading

... that Poundland is as much 'in the public eye' as Royal Mail. There's also a certain amount of free cash floating about as a result of the Vodaphone payouts ... ... which could mean an almighty splash on Monday morning. GLA.

Royal Mail’s shares rose 38% on the first day of trading (the average first-day gain for all UK IPOs since 2008 is just 4%). http://moneyweek.com/lloyds-selloff-must-learn-from-the-royal-mail-privatisation-fisaco/

... with a bit of luck - and possibly up to 600.

Hi ... ... just so you're aware that Poundland Group is subject to London Stock Exchange rule 7050. Any trades placed before 8am on 17th March are being taken on a "When Issued" basis. This means Poundland Group has not yet qualified for a stock exchange full listing. If the stock is not admitted to the official list or to listing or quotation on an approved organisation, every transaction effected under this rule is void. Listing is expected to occur at 8am on 17th March at which point trades in Poundland Group will no longer be undertaken on a "When Issued" basis. You should only proceed to execute a transaction on a When Issued basis if you have read and understood the potential outcomes. WHAT IS "WHEN ISSUED" DEALING? Often called ‘conditional’ dealing, When Issued dealing is a period of dealing with deferred settlement, which typically takes place in securities that are due to be listed or admitted to trading on one of the markets of the London Stock Exchange ("the Exchange"). Trades during the When Issued period, are conditional on the security being listed or admitted to trading and can only settle once this has taken place. In the event the security is not listed or admitted to trading, all transactions effected during the period of When Issued dealing are declared void by the Exchange. This information is disseminated to the market via a Stock Exchange Notice. The When Issued period allows market participants the ability to trade a new issue ahead of its full listing and/or admission to trading on an organised and regulated basis. As well as facilitating price formation ahead of unconditional admission to trading it allows participants the earliest opportunity to agree an entry or exit price of a new issue according to their investment or regulatory requirements. Even so, I'm confident that the shares will listed and will rise on Monday ... but, as ever, Do Your Own Research. Good luck.

... much appreciated.

Any idea when you have to hold the shares to qualify for the dividend ...?