Member Info for LordAdam

Not sure what you've got in your account Grey Monk ... but it's not the B-Share's that were issued. They won't appear until Wednesday 24th ... and then, it will only be in the cash equivalent form. My understanding is that you won't be able to trade them as such and an automatic redemption will occur for the 33.99p.

Seems to me that you are referring to the 8:7 consolidation in that you now have the 'new' share designations issued as 7 for the old ones that you held on the register at the opening on Monday.

The proof of the pudding will come on Wednesday (or later depending on your broker's back office routines) when you will see if you have the actual cash credited to your account.

Your previous post suggested that you bought on Friday and as such I strongly suspect that you *won't* get the 33.99p cash for those shares as you were not on the register by the 5pm deadline on Friday having missed the ExRights time on the previous Wed/Thu.

We shall see.

Mike

Well I sold half in May 2017 at 88p and the other half in Feb 2018 (not so good) at 75p ... and then I went away.

My reasoning was that as I'm really into high yield portfolio type investing this share, which up until then was a 'growth' share didn't fit my profile as it was only going to make capital/equity gains rather than income returns (dividends).

That's not to so that it won't *ever* issue dividends, just that I couldn't see that happening in the timescales that I was looking for. Hence the need to convert capital gains into pseudo-income by cashing out.

Since then I've monitored the share closely and I can't say that I've seen anything to make me regret my action.

Wish that I could say that about other stuff in the portfolio!

Mike

Ex dividend date is not the end of this week, it's 8 November, almost 3 weeks away. The final results had this to say:

"The directors are recommending a final dividend of 49.0 pence per share which, subject to approval at the AGM, will be paid on 5 December 2018 to shareholders on the register at 9 November 2018. Together with the interim dividend of 28.0 pence per share paid in April, this will result in a total dividend for 2018 of 77.0 pence per share."

The record date being the 9th makes the ExDiv date Thursday 8th.

As the dividend is a significant amount (49p) any rise in the week(s) leading up to the ExDiv date is likely to be offset by a corresponding drop on the ExDiv date itself. After all, buy on the 7th and you get the 49p, buy on the 8th and you don't.

Mike

Tedmark ... you're right ... my broker says they are trading 'ExRights' as regard the B-Share scheme payment. But the consolidation 'Ex' date is on Monday. If you buy today, you won't get the B shares and you will be consolidated on Monday.

With dividends and rights in general the company share register is two trading days behind the market. Hence the record date and the 'ExDiv' date. Otherwise a 4:29 transaction in the market today would have to make it onto the share register in 30 minutes to qualify.

See my post at 01:29 this morning for how the maths works out ... and my post earlier this week for the text of my Brokers corporate action notice giving the dates and details.

Mike

Well we're both right and we're both wrong ...

Firstly, neither of us is responsible for the way the market values any share let alone SLA ...

The mid point ((open+close)/2)) on Wednesday was 271.55p and the mid point on Thursday was 267.35p. But hey that's the market for you.

We're also agreed (I think) that if you bought shares on the Wednesday you would get the 33.99p (via the B-Shares) and if you bought them on Thursday you wouldn't. So I'm right about that ... and the market makes you effectively right in your idea that there wouldn't be a change in values.

Tax, by the way, doesn't come into it, as we have never had a 'deducted at source' dividend tax or capital gains tax in the UK ... yes I know about tax-credits in the old days, but they were only 'notional' and not actually deducted.

So the market didn't react to the fact that shares bought on Thursday were worth 33.99p less than the day before. Never the less they were/are.

As regards the consolidation ... the company have chosen the opening market bell on the 22nd (Monday) as the trigger point for that calculation. Consolidations (and splits) never really affect the share price (apart from market sentiment) as they simply rearrange the same market capitalization amongst a different number of shares.

But the reality is ... that if you bought on Wednesday you got the 33.99p and participated in the 8:7 ... if you bought on Thursday you didn't get the 33.99p and did suffer the 8:7 consolidation.

So buying on Wed cost you 271.55 and gave you shares valued (after the consolidation) 310.34 - and you get 33.99p later (based on the previous 8 shares not the 7 of course). Buying on Thu cost you 267.35 and gave you shares valued (after the consolidation) 305.54 - *but you miss out on the 33.99p later*.

As I said, we're not responsible for the vagaries of the market ... but on Thursday, the fair/correct price was (271.55-33.99) = 237.56 which after the consolidation would be become 271.50 ... as you will see 8*271.55 = (7*271.50)+(8*33.99).

Overall, as punters, unless there is a big share drop tomorrow, (always a caveat isn't there), we should have come off reasonably well from this little affair.

Mike

Is it just me or is the RNS that has just been posted to the RNS for GCP actually for the GCP company traded on the NYSE?

That checks out as GCP Applied Technologies.

Looks like the LSE web servers are having some problems ...

Mike

Just to confirm that I received a corporate action notice from my broker today confirming that the ExRights date for the B-Share scheme is Thursday 18th October. That's the date on which I expect the market's reaction, if any, to occur ... ie there would/should be a nominal decrease in the opening price of 34p.

Here's the exact notice -- which also gives the consolidation ExRights date.

"Return of Capital.

Under the terms of the Return of Capital, shareholders will receive a cash payment of 33.99 pence for each share held on 18th October 2018, being the Ex-entitlement Date, through the issue of B shares.

In conjunction with the Return of Capital, Standard Life Aberdeen is also proposing to undertake a Consolidation of its Ordinary shares whereby shareholders will receive 7 New Ordinary shares for every 8 Existing Ordinary shares held on the Ex-entitlement Date, 22nd October, 2018."

Mike

Bob6 has said that the exDiv date is Thursday 15 November.

If you are to receive the dividend you must own the shares as the market opens on Thursday 15th November.

You can sell them at any time after the opening of the market ... 08:01 onwards.

The latest you can buy them (if you don't have access to out of hours trading) is the close of the market the day before ... ie 16:30 on the Wednesday.

Hope that helps.

Mike

:) ... no, not three years of actual income in terms of what I earn/receive each year ... three years of the equivalent dividend income.

It's a way of looking at things that makes the decision relative to the share price and its dividend rather than actual amounts.

I usually buy shares yielding 6% or more ... then if the price increases to the point where the yield drops to 5% I consider selling ... by that stage a 100p share with a 6p dividend will have increased to 120p. So if there's no increase in dividend in the offing, and if the share feels like its topping out, I sell. I get 20p of capital gain straight off as opposed to having to wait 3 years to earn the equivalent in dividends.

Then I put the money to work on some 6% yielding share .... wash, rinse and repeat.

That's it in essence ...

Mike

Ps. This time around it was actually 800 shares, £10k worth.

Just past experience of seeing/watching the cyclical nature of GSK.

You don't have to go back far to see prices of that level ... just as far as Feb/Mar of this year, when I bought last at 1250 and the FTSE was in the 7100-7300 range.

Not much has changed from GSKs point of view in terms of dividend and growth expectations. I rather suspect that as market sentiment changes we will see levels approaching the 1333 level again at some time. My investment strategy is to wait until about that time.

In an ideal world I would buy and hold forever, but the lack of dividend growth and the opportunity to cash out at 1600+ for a 20% capital gain (3+ years income equivalent) was a no brainer at the time ...

Mike

Me too ... sneaked in a small buy within one of the ISAs at 8.8899 ...

We shall have to wait to see if this is the 'bottom' of the recent run on the FTSE. I rather suspect it's not with all the uncertainty that is drifting around at the moment.

Rather reminds me of the very old saying that Wall Street sneezes and London catches a cold!

Mike.

You are of course completely correct ... the record time will be the close of trade on the Friday.

However, as always the devil is in the detail ....

The record date relates to the time point at which the company registrar implements the cut off point on the share holders register held for the company. This is two trading days behind the market ... and hence the trading date cut off is those two days earlier.

This is the normal situation in exDividend dates ... the share trades exDiv from the opening bell on Thursday and the company 'record' date is usually either midnight on Friday or the close of business on Friday.

It's a mute point though ...

The reality is that what matters is not the 'Record Date/Time' but the exRights or exDividend date/time as this is when the shares will be adjusted. The RNS did not specify this, but as I say, it should be two days prior to the record date ... ie Thursday morning at the opening.

Either way, we shall see what transpires, I have no plans for selling and I'm sure you don't have either.

Mike

We income investors ... would NOT welcome a cut in dividend.

Indeed one of the main attractions of the company has been its consistent dividend policy in the past. For true, high yield income investors, the share price is more or less irrelevant -- other than to provide buying opportunities.

What really matters is that the company continues to trade and pays a consistent dividend year by year, preferably keeping track with inflation. With a never sell type approach the rest is irrelevant.

If your hope is to gain from an increase in the share price rather than the income distributed by dividend then you're probably more in the speculation camp than the investment one.

Now I realise that I've just kicked the hornet's nest ... and I didn't mean to start a flame war ... just to show that there is another way of looking at the present situation. :)

Mike

If you sold at 1600 (which I did) then buying at 1404 gives you a 15% profit on the round trip. That compares very favorably with a sit-and-hold strategy of just collecting the (5-6%) dividend.

But my real buying target is actually in the area of 1333 when the yield hits 6%.

Gut tells me that it will get down to that, or close to it, some time over the next 6-12 months.

We shall see ...

Mike

Thanks for the book title/author reference ... I'll give it a look!

Mike

It's built in in the sense that if you buy the share any time up until the 17th you will get the 33.4p ... if you buy on the 18th or after you won't. Hence the share value will (as it must) go down at the opening bell on the 18th. That means the 33.4 is effectively in the price now -- hence 'built in'.

The consolidation should have zero technical effect on the share price ... but there's always likely to be a psychological market effect. On the whole splits are welcomed, consolidations are not. Although there's many exceptions to the rule and we shall have to wait and see how this one pans out.

Buy backs, despite the spin and propaganda are not good news for small investors ... much better if they had returned the capital by means of a special dividend rather than trying to artificially increase the EPS and reabsorb the shares that they printed for the various bonus schemes.

Mike

Don't wish to spoil your consoling statement ... but the 33.4p return is already built into the price ... following the 18th when the shares go ex-rights the price will automatically drop by the 33.4 so Stevey will be none the better off from that respect.

The market really has been expressing its lack of support for this company 'post-merger' by voting with its feet and the share price has reflected this. I've got two holdings ... one from the original floatation and one recent at £3.20 ... so I'm half under water with this one.

We shall have to see longer term what happens with the dividend and the SP.

Mike

Oh golly Strudel it does seem that you've been through it over the years ... you've a ton more practical experience of the bad side of investing than I have (other than the usual duff share choices ... of which I have a reasonable history!).

Here's some interesting links to the FSCS web site that might help to give you some details on the aspect of the £50,000 limit on compensation associated with investment accounts. Firstly their general launch pad page on the subject https://www.fscs.org.uk/what-we-cover/investments/

Looks like Beaufort folk will get their money and investments back in full ... https://www.fscs.org.uk/what-we-cover/investments/information-customers-beaufort-securities-limited-bsl-and-beaufort-asset-clearing-services-limited/

As regards Strand Capital it looks as though the FSCS are paying up to the £50,000 limit for client monies held in accounts, it's not clear to me what's happening or happened about client assets ... https://www.fscs.org.uk/what-we-cover/investments/strand-capital-limited/

Their page on investment limits is not overly helpful ... https://www.fscs.org.uk/your-claim/compensation-limits/investment-limits/

Which leaves me wondering where, last night, I read about the reverting to original value idea ... let me rummage in my history files ... nope, can't find it, but I may have got confused with the American situation ... https://www.investopedia.com/articles/investing/050515/what-happens-when-stock-broker-goes-bust.asp

What an eye opener this all is!

Mike

Strudel, that's an interesting idea of yours regarding spreading your money around a number of brokers in order not to exceed the £50,000 investment and/or £85,000 deposit limits imposed by the FSCS on their scheme.

A couple of points though are worth knowing ... firstly the scheme will not cover you for capital gains made ... compensation is to return you to the value at the time that your investment was first made, as though it had not taken place. Also it's not at all clear that both limits would apply to a single account -- I suspect that you would only get £50,000 on a shares type account. (Of course £85,000 on a bank/deposit account.)

It's important to put it all into perspective ... for example, I don't know in my memory of a single UK bank that has collapsed leaving depositors out of pocket. Even in the days of Northern Rock, no depositor actually lost money even though they could not access it for a period of time.

Similarly I'm not aware of any UK broker that has folded and took clients assets down with them. Rather the way the system is set up, brokers and solicitors etc have to hold all monies and assets in separate client accounts.

If you know of any UK banks or brokers that have gone down taking clients money with them then I'd be very interested to know as I'd like to research just what happened at the time and in the aftermath.

We're all here to learn and many of us (my wife and I included) have very significant sums invested. Clearly we wouldn't want to lose the lot so to speak!

Mike

Leas, a reasoned and measured response.

As you say the Chairman's role is to figurehead the company and guide in the background, lending support and expertise where needed whilst leaving those in executive positions to get on with the 'doing' part of the task.

Mike