Member Info for LordAdam

Forgive the reference to Rowan and Martin's Laugh-In ...

It's interesting to think about the 6m that the companies market cap has reduced by today ... but what's really interesting to the point of being 'strange' is that the management's senior team for this company have lost (on paper) £2m today between them ... and they aren't batting an eyelid about it.

JFW's personal stake has gone down from an all time peak of £23m to £3m ... and there's no sign of him or anyone else sweating about it.

And therein I suspect lies the secret of Trakm8 and what's happening with the share price. If you can find the answer to that particular riddle I think you'll have the answer to the whole problem.

Mike

It's extremely tempting to top up at these levels.

Yes it is, and I did.

This drop today is lunacy and common sense will re-establish itself fairly soon. As you say the meeting/presentation has only just finished and we should some information from that.

Mike

I don't think there's any fear of a hostile takeover ... at almost any price ... if you look at the number of shares held by JFW and the rest of the management team it comes to approximately 33%. Other large investors account for 14%. I assume that the nominee companies listed are small private investors and account for a further 18% the remainder is probably made up of smaller holdings (below the notification level).

The majority of small investors think the company is worth more like £5 than 50p so there's little fear that it would go for less than that.

The way that I read it is that Trakm8 is being run more like a private enterprise than a listed company.

There will be either an exit strategy or an income generation scheme planned -- probably the later. We just haven't got there yet.

Mike

A bit like a budget speech, there's something for everyone, optimist and pessimist alike.

Very interesting, but it becomes significant when seen in the context of a series of statements and RNS's by a board who have been deliberately avoiding any hype or ramp type action for nearly three years now. For a variety of reasons the BoD don't seem to want a higher share price. That will all change when it suits there purposes for it to be higher.

Mike

A good set of results ... and a useful increase in the dividend overall (after accounting for the recent rights issue).

As always the market can be a bit contrarian so we shall have to see what the bulk of the folk make of it ...

Mike

Thanks for the information ... what's interesting is that the 'A' shares from what I've seen are consistently lower priced than the 'B' ... I wonder if this means that the buy-back will tend to nudge them up towards the same price. Does seem though on the face of it that holders of the 'B' shares will loose out on the 'value-added' argument that is usually applied (falsely I must say) to the buy-back/return-of-value trick.

Mike

From the RNS's that I've seen, and I've only sampled a few, it appears that the buy back is type-A shares only.

Is that intention/plan?

Mike

Small detailed point on the details of going ex-Dividend ...

You have to be holding/own the shares as the market opens on the day of the ex-Dividend (Thursday 16th) in order to qualify for the dividend on the date that it is paid. The later date, in this case the 17th, is the record date. It relates to the register of shareholders that each company has to keep and it is usually two days behind the market. Effectively the record date of the 17th (Friday) will be uptodate with the trading activity from when the market closed on Wednesday.

It's the register that is used to generate the payments, but it's the opening bell on the Thursday (16th) that gives rise to the entitlement.

Note that you can sell first thing on the Thursday and still receive the dividend. In fact you can buy at 4:29 on Wednesday and sell at 08:01 on Thursday and you will still receive the payment.

Hope that helps.

Mike

Definition of an Expert ....

1. 'X' is an unknown quantity
2. A spurt is a drip under pressure.

Mike

DriftKing ... from what you write it looks as though your thoughts are that if you rebuy within the 30 day period you are free of CGT. If so, then I'm afraid that's not how it works ... here's the details from guidance sheet HS284 (2018) ... "If a disposal of shares is identified with shares acquired within the following 30 days, the gain or loss on disposal is the difference between the net disposal proceeds and the acquisition cost."

So you will be eligible for CGT on the difference between your sale and re-buy price. And although that is likely to be a smaller amount (given the 30 days) than if you had sold outright the real disadvantage is that the rebought shares now acquire the purchase price of the shares that you sold at the beginning of the sequence.

Overall it's a nightmare ... suffice it to say that the optimum is when you make £11,700 of CGT's in the year and no more.

If you are a husband and wife team then you can exploit the fact that you both have separate CGT allowances _and_ you can gift shares between yourselves for no tax. So husband (H) sells the shares ... gives wife (W) the money and W rebuys the shares. Then 30+ days later W gifts the shares to H. You've effectively B&B'd the shares and managed to crystallize your gain thus using the allowance to the full.

Mike

I've got a note in my diary (based on last years dates) that the Interim Results are due on Thursday 23 August.

Am I right? Does anyone have an official date for the interims?

Mike

So what does the Head of HR know that we don't? Or put another way, I wonder what his thought processes where behind selling £638,000 worth of shares a couple of days ago?

Maybe his thoughts were a bit like mine as I sold out at just over 1600 ...

Well time will tell ... Good luck all ... I've made my targeted gains for the time being so I've no complaints and I wish you well.

If/When it gets back to about the 1350 sort of level (6% yield) then I'll be back in again.

Mike

If you don't watch it you end up selling when the price is down and buying when the price is up ... which of course is exactly the opposite of what you want to do.

So unless you are a true contrarian ... in which case, the question is when is the bottom the bottom and when is the top the top ... can I suggest an alternative way of thinking about it?

For these income based, widows and orphan, shares ... buy when the yield is above say 6.25% and sell when it drops to or below 5%? With GSK and its effectively constant 80p that gives you a range of 1280-1600. If you traded that range you'd have a 25% growth (5+ years of income) and a 6.25% return while you were waiting.

Of course this isn't a bank and you run the risk of losing the lot ... but then when did your bank give you a 6.25% return with a potential windfall of 25%?

Mike

I concur with RichRed in terms of how it would have worked ... what was sold on your behalf was the right to buy at £1.55 per share. Whoever picked up the rights would then have to add £5.18 to make the share fully paid up before it could be sold on.

So actually, looking at the figures you didn't do at all badly out of it ... which is a surprise to an old cynic like myself.

I reckon that on 9th, the day before the new shares were admitted, the closing price for the rights was 150 and you got 155 so well done you! As to whoever picked up the rights ... they paid 155+518=673 for each share ... and on the 10th the market closed with PHNX at 677. So not a lot in it really.

Thanks for the numbers it's always interesting to see how the other options played out!

Mike

55p for a final dividend would be very nice, very nice indeed but I don't think it's going to be that high.

The last interim (before the rights issue) was reduced by 12.5% to give 28p. If we reduce last years final by the same amount we get to 56p ... but we've had a rights issue inbetween ... and if we split the 56p over the additional shares as well we get to 42p.

As I tend to be conservative when predicting dividends and dividend growth in my books I've got 42p final written down, which with the 28p interim makes 70p for the year. On an historical basis that gives me 6.18% (for the price that I paid plus the RI). For new investors that would give 7.58% based on yesterday's price.

I rather suspect that one of two things is going to happen ... either the BoD will take the opportunity to 'normalise' the yield and increase the cover by cutting the dividend -- which is not going to do much for the share price, and even less for my historical yield (and we're income investors) ... or, the dividend will be maintained at or just above the 42p level and the share price will rise to bring it back into the 6.5% sort of yield range. (That's my bet by the way)

Mike

BewareTheShadows ... sounds like a plan.

I too have a sell order in for effectively 1600 ... like you the capital gain at that point (26-27%) will equal several years income and make it worth while selling -- although normally I'm a very long term holder for income. Trouble with holding GSK for the long term within my own p/f is that there's no real dividend growth at the moment and a relatively large swing in price (and yield).

Fingers crossed on a blip it might reach the 1600 level over the next day or two!

Mike

Londoner ... thanks for the thoughts/analysis ... very nice to see such a reasoned exposition of the recent trading statement!

We're income investors and whilst we keep an eye on capital values, what drives us forward is the long term income stream (dividends) that we get from our investments. So rather than being share price focused what really ticks the boxes for us is a maintained and preferably modestly progressive dividend payment. We were not disappointed with the recent interim earlier in the month and are looking forward to the November results (and January dividend payment).

Our average price is 108 ,,, giving a very creditable historical yield of 6.9% ... which we're more than happy with. We would top-up more, but our holding here is 'up-to-weight' for the rest of the portfolio, so until we've exploited opportunities elsewhere we'll be sitting on our hands!

Long term ... I don't see the company going toes up ... I suspect the sector as a whole will come back into favour, if only as a source of income for old folk like us! Back in the day it used to be that Drink and Tobacco were the two stalwarts of income ... Tobacco I don't feel happy with from an ethical/moral viewpoint (that's my choice, others may choose differently of course) ... Drink I'm very happy with!

In short, whilst the equivalent of two years income down at the moment, I don't see any reason not to hold here, and as I say, when the balance of the portfolio changes I'll probably add to the holding.

Mike

We're income investors ... but unusually we sold a bunch of these at 2750'ish as the P/F had become rather top heavy in Shell. Pleased that we did as we max'd out two lots of CGT allowance and can now move the cash into the ISA's when the price is right to rebuy.

Overall though such shenanigans are not our style, much preferring to buy and forget ... and there's always the old proverb "never sell Shell"!

Mike

The implication from the VOD board was that 'LC' has been banned from the site ...

I agree ... VOD is pretty much a range trading share with a good consistent dividend payment to keep you interested while your're waiting.

I'm essentially an income driven investor ... but when I first set our portfolio up I made some mistakes, as we all do ... I got into VOD but at the wrong time, back in 2015 at about the 2.28 level ... bad timing really but the yield at that stage seemed attractive and I thought they might have a bit to run on the SP -- but it was the yield that I was buying for really.

Sold half in 2016 for 2.25 as I could use the money better some where else, and the second half in 2017 for 2.33 for a small gain.

Overall, including the dividends I made 4.91% pa on them ... so not a disaster for a beginner.

This time round I've bought in at 1.93, 1.92, 1.84, 1.84 for a weighted average price of 1.88.

At that level I'll be happy to collect the dividend for a while ... but when we get back to the 225-230 level I'll be looking to sell again as my capital gains at that stage will be equal to 3-years income and that's my criteria for considering an exit -- unless there's a firm reason to expect further gains or growth in income.

Mike