Member Info for Meconopsis

Good evening @ strictlybricks

Gemini tells me that the marcap at the end of Feb 2025 was around £14.4bn - but what’s £400m amongst friends?

[Correct answer is “Nearly enough for a round in my local, but not quite”…]

Thanks Forensic505

New investor here…

Could I ask how often/when/where the NAV gets updated to SSIT please?

It’s not immediately obvious on their website.

Thanks in advance.

Happy new year everyone.

As a reminder to everyone, the sale of the US protection business to Meiji Yasuda is still ongoing. It was headlined for close "at the end of 2025" by L&G, although Meiji Yasuda stated end 2025/early 2026 in their announcements.

We *should* get a share price pop when it's announced as it'll unlock a promised £1bn buyback by L&G, which should provide a significant degree of price support.

Why no news yet?

It's probably because there are a lot of regulators involved:

- US - Maryland and New York

- UK - PRA and FCA

- Japan

- Bermuda

In these transactions, no news is generally "it's plodding through the bureaucracy" good news.

L&G will want to get this closed before the year end announcements.

“Correct me if i am wrong here, but my understanding is SpaceX are just looking to raise $30 Bln in funds from share holders, not actually taking SpaceX public ......but the $30 Bln raise effectively means if they did take it public its value would be expected to be near $1.5 trillion. Have i understood correctly?”

The reports are that it’s an IPO.

In truth the £30bn is probably a bit of a sideshow against a £1.5tn valuation.

NASDAQ has a minimum free float requirement of 10% - so $150bn at £1.5tn. So $30bn is only 2% of marcap. It means that the IPO is providing an exit point for staff (including Musk) and other investors (such as SMT) whilst minimising dilution.

Given that SpaceX is now cash flow positive, the $30bn is probably aimed at clearing a chunk of debt - so that there’s no future need for a capital raise.

SG2025 - completely agree with the caveat that purchases are allowed in limited, specific circumstances - e.g. through a share save scheme.

Your point stands in substance though - the CEO can’t make a £200k personal purchase as a show of confidence at the moment.

Phyl - even if you take the dividend then consider reinvesting 5-10%. It’ll provide you with a mechanism for keeping the divis ahead of inflation. Compounding and all that.

This is worth a look - https://news.sky.com/story/theres-one-thing-scarier-than-markets-lurching-around-and-its-happening-right-now-13414361

An interesting piece from Ed Conway at Sky News. It provides a good indication of why insurers have dropped in the last few days.

https://news.sky.com/story/theres-one-thing-scarier-than-markets-lurching-around-and-its-happening-right-now-13414361

Eckie8 - I agree that Solvency was the narrative.

If you head over to https://group.legalandgeneral.com/en/investors/equity-investors-and-analyst-centre/consensus then you'll find what L&G published at the end of June based on canvassing the views of a variety of brokers.

Head over to the half year results presentation at https://group.legalandgeneral.com/media/p0tk0dzq/2025-half-year-results-presentation-slides.pdf then you'll see that L&G beat:

- Core Operating Profit - delivered £859m vs £816m consensus

- EPS - 10.94p vs 10.50p

- Operational Surplus Generation - £729m vs £705m

Where it didn't beat was the consensus view that S2 coverage ratio would be 220% vs 217% delivered.

Head over to page 23 of the results pack and you'll see that the movement of the S2 coverage ratio and the note highlighting that the US disposal will add +7% back in AFTER the effects of the forthcoming £1bn buyback.

As it was, the £500m buyback took 7% out of the S2 coverage ratio - partly because it was booked to the accounts at the start of the buyback. Had they only booked half of it to the accounts then the coverage ratio would have been slap bang on consensus.

My view is that the share price drop was someone shaking the tree. If the results were *so* worrying then the share price would have continued to fall and - as it is - we're more or less to back where we started.

What I think we *can* expect is quite a big share price bump once the US disposal is completed and the £1bn buyback starts.

I'd encourage people to leaf through the analyst pack and - in particular - pages 30 onwards.

Chid - you’re absolutely welcome to express whatever opinion you like. Whoever or whatever you are.

I largely disagree with you. But value the disagreement.

Eckie

If you read the half year report and/or listened to the analyst briefing then you’d understand the reason for the S2 coverage ratio movement, which was fully explained by the management team - including the fact that the US disposal is going to add +7% net onto that ratio.

You say that the S2 coverage ratio is below estimates. That’s the analyst estimates - not the management team’s.

The S2 coverage ratio is affected by all sort of stuff like dividend payments, allocation of buybacks, accounting of assets - and all insurers manage within a target S2 coverage range.

It’s important to be clear that Aviva’s increase takes the S2 coverage ratio from 203% to 206%, whereas even after a 6% drop L&G’s is 217%.

Compare either of those with other insurers and you’ll see that they are both at the top end of ANY insurance company.

As an Aviva shareholder I’m actually more worried that the CSM hasn’t grown and that Aviva is failing to compete effectively in the PRT business. The DLG acquisition provides lots of opportunity, but also lots of execution risk. The Aviva management team are really good at execution, but it’s far from a risk-free endeavour.

Don’t get me wrong, I think the Aviva management team have done a fantastic job. But, equally, I think the job the Simoes is doing isn’t fully appreciated yet. L&G is probably where Aviva was 2-3 years ago in its transformation.

“But Aviva is up 43% YTD. Also big inrease in the dividend. Solvency also excellent. L&G all the exact opposite. I'm just saying.”

L&G solvency ratio is higher than Aviva, as is RoE. L&G committed to much bigger share buybacks than Aviva.

Also, just saying.

UserSteve - in short, the accounting standards for insurance companies changed in the last few years, which makes profitability / assets / equity both worse than it is and not comparable with the figures before the changes.

Click on my username and trawl through my old posts. You'll find posts on the impact of IFRS17 and "mark to market".

City AM article - https://www.cityam.com/motor-finance-lords-sound-alarm-on-fcas-redress-scheme/

From The Times via Apple News…

“…The House of Lords financial services regulation committee has written to the Financial Conduct Authority asking it to justify why claims should be allowed going back to 2007.

The committee suggested that claims should only be eligible in respect of car loans where the contract has expired within the last six years.

…

The committee, which recently published a highly critical report about the FCA and its inhibiting effect on the overall sector, also called on the regulator to publish details of the modelling it used to come up with an estimate of £9 billion to £18 billion for the total cost of the redress scheme.

…

Lord Forsyth of Drumlean, chairman of the committee, said the peers were “concerned by certain aspects of the redress scheme”, particularly on how far back claims should be honoured.

…

The committee argued that because the basis for claims would primarily be on a breach of the Consumer Credit Act, it considered a limitation period for bringing a claim in the courts “may be more appropriate”. This, it said, might be six years, citing the precedent of a case brought to the Supreme Court in 2023 involving the Consumer Credit Act.

‘What legal advice has the FCA taken on this point? What legal grounding underpins the FCA’s proposed timeframe?’ Lord Forsyth asked of Nikhil Rathi, the FCA chief executive.”

TinkerT - my (limited) understanding is that you can carry a capital loss more or less indefinitely as long as it was initially reported in good time. Certainly my accountant includes a statement of rolled forward capital losses on my tax return.

Manfor - SCB currently trades at 109.1% NTAV on LSEG and 108.7% NTAV on HKEX.

Largey00 - I largely agree with everything you've written except the oversold bit. Although - just to contradict myself - I think the company is massively undervalued.

There are two issues for me:

The first is that cladding is the "gift that keeps on giving". Eight years on and it's still adding to costs. And I'm not convinced that that's over.

Secondly, nothing happens quickly with planning and until the Government brings in really meaningful reforms then housing sector recovery is a "way off".

I have been (a very happy) holder here several times, but think there's as much scope for the price to fall from here as rise. "Unfair" as that may be.

Lowest - 250

Highest - 1100