Member Info for LordAdam

I think the market is very unimpressed by the lack of dividend growth given the rise in profits and the improved cash position. Given what's going on over at EMG I wouldn't be surprised if the BoD squandered the improved cash position on protecting their bonuses via a share buy back rather than give it to the shareholders via dividends as they should. Mike

The result of the AGM were pretty much as they always are ... all resolutions passed etc. except that resolution 3 was withdrawn before the meeting -- does anyone know what that was? I can't find a complete copy of the notice for the AGM on the web site as it would have been sent out on proxy cards etc. Mike

As you say, unusual wording, but it's a european contract and that may have influenced the choice of words. The intial contract was announced on 24 May and was for launch in July 17 ,,, now just a couple of months in the customer is placing a continuation to that initial contract for a three year period -- clearly they were impressed/pleased by what Trakm8 are offerring. To me it appears to yet again confirm the progress that Trakm8 are making in the move to long-term cash flow generating contracts rather than the usual sale/profit cycle basis that most AIM companies aspire to. Mike

Today's RNS puts the dividend down at 55.1p ... looks to me like the board are aiming to spend half the dividend on the buy back. So my pessimistic estimate of a 50% buy back policy seems to being coming true. That's costing us poor people 3.1% per year not just this year but for every subsequent year, ie you pay 3.1% this year, and next year and so on ... *even if they stop* buying the things back! That's the power of compounding -- losses up front add up to mega losses over the years. Mike

Followers of BREE will have noticed the RNS for Tim Hall and his wife (PDMRs) selling a million shares over the last few days and wondered what it might mean ... I know I certainly did. Looking at the detail though it has been previously announced that the Tim Hall, having been CEO at Breedon Southern for the last seven years was stepping down and the board were looking for his successor. As such it would be natural for him to 'trim' his holdings and move on. I suspect we may have an announcement regarding that in the near future. Mike

Thanks for the update on the dates for the dividend announcement. I think you hit the nail on the head when you said "I'm sure the gain isn't solely down to the buy backs" ... that's the real question, how much of the gain _is_ due to the buy back? and how much is due to Mr. Market, Brexit and the election etc.? There's no real answer to that one, but there is a real answer to the following question "How much does the share price have to grow to compensate for a 50% buy back policy?" It's possible to analyze that precisely in a spreadsheet. Two simple scenarios ... no buy-back, £2 dividend per year completely reinvested ... vs ... dividend of £1 reinvested plus annual growth generated by the £1 buy-back. So what growth rate do you need to compensate for the buy-back? The answer is 3.1% ... you need a relentless 3.1% growth in the share price to compensate for the buy-back. Put another way, the buy-back takes 3.1% straight off the top of whatever you get and on a level share price that's a real loss of 3.1% when compared to the level dividend. I'm not so sure that BKG can guarantee outperforming the market by 3.1% every year for the next 'n' years. Mike

With today's RNS the dividend is down to 60.9p ... that's very nearly a 40% cut on the 100p that they promised it would be when they talked about returning £10 per share to holders. Does anyone know why this year the dividend is being announced on 17 August when it was 15 June last year ... two months later? Mike

Overall we're holding 9.7% of our portfolio in SSE ... as we've been holding for a while, based on the original purchase price we're getting 6.1% yield -- although new buyers at today's prices would be getting more like 6.6%. It was the original intention, and still is the plan, to hold for the very long term and reinvest the dividend in this and other holdings as appropriate. On that basis we've done reasonably from the dividend income stream. We would have done a lot better had they paid a 50p special dividend rather than feathering their own nest at our expense. Overall though, if I were forced to sell at today's prices I would have made an annualized 2.1% which is really not that good all things considered. As I've said in other postings, with the present lack luster performance and the tendency for the BoD to dip their hands in our pot, I won't be topping up here with the dividend proceeds until there's a significant drop in price (and hence increase in yield). Mike

Yep, with a pay cheque of over £500,000 a week they are using the dividend that they promised us to artificially increase the EPS so that they can be sure of getting their bonus. At the last time of reckoning the dividend had been cut to 61.5p from the 100p that it should have been. So when you get your dividend, remember that it should have been more than 50% bigger. And don't forget that what you've lost isn't being used to pay the bonus, it's being spent on insurance to help guarantee it ... the bonus comes out of other company funds -- double whammy. Mike Mike

Rather than a £3m buy back, which will have uncertain results, apart from making the board look better from an EPS point of view and helping to guarantee their bonuses I would rather have had an extra 0.75p on the dividend. Better the cash in the bank than two in the bush ... mark my words, it's an inward looking and self serving board that does 'buy backs' and once they do it they usually do it again. Mike

You're right there's not much posting here ... I'm a long term holder here but two things have stopped me topping up over the last 12 months or so. The first is the buy back program. They took the 50p special dividend that I should have had and used it to guarantee their own bonuses and then had the gall to say they were going to protect the dividend to the RPI level when the the buy back created a 3% dividend increase automatically. In other words if we don't get 3%+ then they've taken even more money off us. The second is that the buy back has had a very sluggish effect on the SP ... Tomorrow we go ExDiv and you can expect a 60-70p drop at the open ... I suspect that the SP will soften further over the next few weeks. All in all it's a poor performance and past experience suggests that once a board starts playing the buy back game and looking after themselves you can expect more of the same. I hope it works out for you ... if it weren't for diversity and getting in a long time ago I wouldn't be here now and when the time comes I'll probably be leaving. Mike

Rather than just read the Mail ... if you had taken the time to check the facts you would have seen that they are 33rd in the list of shorted stocks ... and not in the top ten as you stated. See http://shorttracker.co.uk/company Also if you'd followed what I said in my last post, or again checked the details ... you would have realised that there is only one fund that holds any significant short position in LRE ... so more 'hedge fund' rather than 'Hedgies'. Mike

Sorry to see you leave Arsenal ... but each to his own, and you must do what you feel/think is right. I hope you'll stick around for the discussion in future. Personally I'm in for the longer term and am hoping for a special dividend come the autumn. On the subject of shorting/shorter's list I think you've called it wrong though. Odey Asset Management (OAM) do have a 4.5% position but in actual fact they've had a short position since 2013 and historically it's much larger than this having peaked at about 6.5% back in 2015. Effectively OAM trades the short position -- that's what that fund does and at the moment they are actually reducing their position ie they think it's going to go up not down. As we get closer to the autumn the current price doesn't seem too high ... earlier though I did sell out at 734 and bought back in at the 670-75 level. Although I'm confidant of getting the 735 again I'm not so sure that I'd get back in again at a reasonable price for the potential 60p special later in the year. Mike

If my diary is correct then we should be having an announcement this week about the upcoming dividend etc. By my calculations the 100p will have been reduced to 62.47p assuming that there are no further buy backs between now and the announcement. That's a hell of a reduction in income stream to 4% from the headline 6% that I was promised when I bought my shares. We shall see what the board have to say about their intentions ... but from my perspective they don't look good. Mike

There we go ... another 3p (3%) off the dividend ... now down to 63.5p from the 100p that the accounts allocated to us. When will it stop, who knows, the board haven't declared their position on that one, but looks to me that it's not going to be any time soon. Certainly, if I had the money in my pocket, and I would have if they paid the full dividend, I'd be cautious about investing at this price and in this climate. At least I would have a choice ... here I have no choice, and no choice about that bonus that they are probably securing along the way either. Mike

Seems like the board are becoming more and more desperate to secure their bonuses with the buy back ... buying bigger chunks of shares at higher and higher prices. Each of these huge purchases is costing us 3p off the dividend ... now reduced from 100 to 66.5p ... more than 33% down. I for one am not a happy bunny with this policy ... Mike

Don't know if anyone else has been keeping track of the buy back ... but my spreadsheet (which was penny perfect last time around) says we're now down to 69.4p from the 100p that we should be getting. I was very disappointed to see that they'd resumed buying beyond what they did last time and at share prices very considerably in excess of the price when the program started -- personally losing 30% of the dividend isn't acceptable. And yes I know I could sell some shares for the difference ... and lose £2 a year from now to eternity for everyone that I do sell. Bum deal all round, unless that is you've got an executive bonus that's linked to EPS etc. Mike

If you look at the detail I think you'll find that the options aren't exercisable until 2020 at the earliest. Also you'll notice that they were done at the mid-price on the day of the results ... ergo they were arranged weeks ago and the strike price would have been anyone's guess at that point. I'm afraid I don't share your sentiment ... rather the opposite ... from a money grabbing point of view it would have been easier and more certain to either award short term options, a cash bonus or a pay rise than do it this way. Yet again the board have specifically tied their own financial well being in with that of the company rather than pursue individual short term gain. Mike

My first reading of the results are that they are very much what we expected to see with some interesting plus points that raise their head above the parapet ... "installed base increased 26% to 190,000 (2016: 151,000)" is one that catches my eye -- a larger increase than I had expected given the poor timing of incoming projects. Given that TRAK are moving aggressively towards a recurrent revenue business model this is indeed significant. Also an eyeball of the results suggests that their cash flow control is very good ... We shall see what the market makes of it overall, but in the short term I expect the market makers will try to milk the results in their usual exploitative fashion by big spreads and wild swings -- but twas ever thus ... Mike

For a board who are exceptionally reserved in their use of words in general and RNS's in particular, coupled with the recent major equity investment of the management and the even more recent rise in the share price I can't help feeling that this is indeed 'significant'. Mike