Member Info for LordAdam

I do hope it's not as low as a tenth of the previous 58p ... ie 5.8p per share ... I'm hoping for 7.42p, but it's more hope than science to be honest. Until 12th March with the half-year results I don't think we will have any firm idea.

Meanwhile, although I dislike censorship ... as Mr. BTF seems to be a great deal nuttier than a pile of Squirrel Sh?t and seems to be intent on proving such to everyone (ie he can't keep quiet) ... I'm going to have to put a filter in for him.

They went exDividend *before* the recent shenanigans. You will *not* get the dividend in May if you buy now.

Mike

The argument that companies indulge in buy backs to reduce the dividend commitment is both fallacious and incredulous.

If a company is strapped for cash to meet the dividend it cuts the dividend - period. Anything else just doesn't make sense and the numbers don't add up. With SLA we're talking about spending £3+ to save 20p (in round figures). Put bluntly they could cover the dividend for the next fifteen years on that share that they've just spent £3 on ... yes I know the dividend should go up year on year ... but you get what I'm saying and a 15 year payback just doesn't make any sense of the transaction.

If a company has surplus money and no suitable project in which to invest it (ie put it to work on behalf of the shareholders) then it should either a) retain the money as reserve, or b) distribute it to the shareholders. And a buy back is not a distribution.

So dodgy is this practice that there is a whole chapter in the Companies Act devoted to it (ch 18) and it's forbidden (sect. 701) without the specific passing of a resolution by the share holders in its favour at the annual meeting (many will have seen these resolutions routinely planted in the notices for such meetings and they are routinely passed 'on the nod' without a second thought).

Has anyone looked at the terms of the executive bonus scheme?

Ah the old chestnuts ... it's amazing how folk fall for the share buy back scam.

Firstly the equation ... Market cap / number of shares => share price ... is something that you might find in an accounting textbook ... and that's where it should stay.

The reality is that it's the other way around ... share price * number of shares => Market Cap. It's share price that drives the market capitalisation, not the other way around.

The buy back swaps the certainty of a cash in the bank dividend which the share holder can choose to spend or reinvest at their discretion ... for the vague hope that the share price will/may possibly increase at some point in some way in the future, which the share holder has to sell before gaining access to.

So why are they so popular? Who do they benefit, what's the real purpose for this slieght of hand? ... Interesting question that ... call me cynical but seems to me that the only 'guaranteed' result of a share buy back is, Earnings / number of shares => EPS goes up ... of course that couldn't have anything to do with making the Board of Directors look good could it? ... and I'm sure it's got nothing at all to do with executive bonuses ... nah, that would be just too cynical ... or would it?

Mike

Just to help clarify the situation ... shares that are held in Treasury do not count in terms of the market capitalisation of a company, and also do not count for the purposes of calculating the percentage holdings etc for reporting by large investors.

Once a share has been bought in the market and transferred into Treasury it does, for all practical purposes, cease to exist. There is a further stage of 'cancelling' the share but this is largely academic. Some companies keep a stock of shares in Treasury for employee bonus schemes and scrip dividends thus avoiding the need to create them again at a later date.

I'm no fan of buy backs ... much preferring the certainty of dividends or capital returns than the vagaries of market movements which may or may not lead to a capital gain at some point in time -- if you're lucky.

Mike

The situation is exceptionally clear ... from the prospectus itself ...

"The Consideration Shares received by Galliford Try Shareholders will rank pari passu in all respects with existing ordinary Bovis Homes Shares, save that they will not be entitled to receive the Bovis Homes second interim dividend, which is expected to be declared in lieu of the Bovis Homes 2019 final dividend for the year ending 31 December 2019.
Galliford Try Shareholders on the register at 8 November 2019 remain entitled to receive the final dividend of 35.0 pence per share for the year ended 30 June 2019, as announced by Galliford Try on 11 September 2019."

The new Bovis shares will rank 'pari passu' with the exisiting shares ... they are indistinguishable from them ... and will be paid all dividends etc that go exdividend after 6pm on Thursday 2nd. You won't get the dividend that is paid in May but you will get anything subsequent to that.

The only reason you're not getting the May dividend is because the moved the exdividend date prior to the changover in order to specifically exclude us. Similarly the bonus issue to existing Bovis shareholders is/was managed in the same way.

Mike

My reading of the situation is that you *wouldn't* get the dividend ... they went ex-Dividend on the 24th, so you've missed that and consequently won't get the dividend payment that will occur on 29th May 2020.

I'm prepared to be corrected, but I think I've got the details right.

Mike

As at the time of writing (12:45) the dividend is in my cash account but not in my trading account ... so it's kind of half way there. That's with my ISA account at iWeb ... I'd expect it to make it to their normal trading accounts a little quicker ... past experience suggests that it will make it through the system before the end of the day (but today is a half-day of course).

Mike

As you say, they've promised it in the RNS at 10:13 but it's not available on their site or the nsm at this point in time 12:45 ... does lead one to believe that they really want everyone to have gone home before it comes out!

It's the only down side of my broker's account with iWeb ... which is very cheap to run and normally a very good service ... they won't/don't do scrip dividends within their nominee accounts -- which is a pity as if you're of the 'reinvest the divi' mind set (and I tend to be) then you often get a reasonable price for your new shares all things considered.

I do of course tend to reinvest the dividends, but just have to do it manually ... what generally happens is that Company A's dividend gets put into Company B's shares ... Company B's div goes into Company C and so on ... that way the timing is often beneficial.

Mike

SonOfRobin ... I stand corrected, well partially at least ... the norm is for shares not to be purchased in the market place to replace those created/issued for the scrip dividend ... SSE have taken an unusual route. But only partially ... note that the amount of dividend elected for conversion to the scrip is some £209m and a maximum of only £150m will be expended on the buy back. So we're both right ... more importantly I suspect that we've both acquired some knowledge along the way.

I tend not to look at the fine detail of various companies scrip dividends as my brokerage account doesn't allow the take up of them ... which is a pity on some occasions.

Mike

SonOfRobin ... if you're talking about the shares which are given to share holders in lieu of dividends ... then these shares are 'created' by the company, they aren't bought in the market. Effectively they are created/issued by the company at zero cost to themselves and so there is a cash saving when compared to actually paying out the dividend. The folk who actually pay for them are the exisiting share holders who suffer the share dillution when the new shares are created (or brought out of treasury).

Mike

Yes, I thought the previous announcement was a bit 'premature' ... Shell usually doesn't announce the currency equivalent dividend values until very late in the day. Should have trusted my instincts and then I wouldn't have had to update my portfolio software twice!

It's not unusual for employees of a company to be also purchasing shares via one scheme or another.

But when it's your only share purchase or investment you might like to look carefully at the implications ...

Should the company fail, and here I refer to any company not just Kier ... then you stand to loose 1) your employment, 2) your expected or current pension, 3) your savings/investment. It's worth thinking about diversification in such circumstances.

Mike

Actually they may have hit the point rather than missed it ... what MARS wants is the publicity ... they can always bump the price up later. And EV owners want somewhere to eat while they charge too ... so they get a cheap meal/drink and a charge at the same time. Next stage is some kind of loyalty discount ... ie refund of some of your charging against a bill for 2 or more people and you have the makings of a marketing campaign.

Mike

So, let me get this straight ... we wait until the buy backs finish ... ie, there's no systematic buying of the shares ... and then the price goes up?

What happened to the basic supply and demand model ... unless we now mean when there's a surplus of sellers the market makers put the price up so they can make less (or no) money out of the market ...

Umm ... not sure that this is an idea that's going to float ...

Mike

It's when they get around to it ... although it will never be earlier than the payment date. Usually they lump all the reinvestments together and do a bulk purchase in the market as soon as is reasonably possible after the money comes through. The reason behind that is that they are then not liable for making a discretionary decision about timing which might go against you leading to a claim that they acted incorrectly. If you are lucky they then split the costs across everyone and you get an advantage in terms of trading costs. However, the market makers know what is going to happen and could manipulate the price on payment day or stock pile stock ready for it.

Mike

Makes no sense at all to me ... oh, there's an argument that runs in favour of MMT for unusual conditions when stagnation or recession is likely ... but on the whole internal projects funded by printed money leads to an effective devaluation of the real value of money -- and those most affected tend to be the financially prudent on relatively fixed incomes. ie those on pensions -- the very folk who are supposedly lusting after smooth roads and high speed internet in the country.

An analogy that always shows the weakness of these types of theories is the simple one of family life ... if I pay my son a handsome dollop to paint the garage door (that's infrastructure, and it needs painting) then our family wealth is not improved one jot ... our GDP has increased, we've turned over cash ... but in reality I've lost money to someone outside the family to buy the paint (that's imports) and more than likely my son will spend the money outside the family to boot ... that's more imports.

Nope, no fancy theories ... as a country we have to make things and do things that other countries want to buy.

Mike

Longish, thank you for the reference to Thomas Picketty's book 'Capital in the Twenty-First Century'.

I've now got a copy and it's safely tucked up in my 'must read' collection.

Always good to broaden the horizon's and increase the depths of the foundations!

Mike

Diabolical communication as you say ...

The RNS says " The B shares will be redeemed for cash on 24 October 2018."

My reading of that is that they will be issued automatically on Monday 22nd and redeemed on Wednesday 24th, although as you say the actual payment will be made (I think) on 2 November. As the B-shares will never be listed on the market for trading some brokers are not even listing them on their client's accounts. It would appear that some are, some aren't -- mine doesn't.

Either way the effect is the same ... we get the dosh on 2 November. Meanwhile the consolidation took place first thing on Monday morning.

I suppose the next major thing from a high yield portfolio point of view is going to be guesstimating the dividend for the next time around. I do recall that there was a prediction in one of the sets of results or may be the merger/sale documents. One thing is for sure ... I bet its based on the new consolidated shares rather than the old ones (ie we don't get the 8/7 that it should have been!).

Mike