Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Fair point I think. As a point of semantics the payment hasn't been described as, and isn't, a dividend, - it's a return of capital (or capital reconstruction), but given the rise in the share price we'd have been better off keeping the shares.
I guess looking ahead if the company continues to drive improved financial performance and becomes more valuable there are fewer shares over which to spread the value, so the share price could appreciate more.
Good point ftseexplorer - but then jp71 should not have been subject to the shareholding reduction (not owning the shares on the relevant day) ? Which, given the share price, might have worked out better than the capital reduction ?
It will be interesting to see what the half year results say on Thursday, and whether the share price moves very much over the next week or so. This distribution of money was always described as a reduction of capital rather than a dividend. The aviation headwinds seem to be easing a little although automotive is still struggling with the chip shortage by the sound of it. Remain of the view this share is a long term hold.
I thought the results were a small step in the right direction. I think we all know the end point is some years away, and that the company has to 1) increase the number of cars it sells, 2) deliver direct cost saving through better procurement, and 3) improve the productivity so that opex per car produced reduces. The right noises are being made, lots of sensible things seem to be in progress, but really it's too early to be either very confident or severely disheartened.
The other questions in my mind are - if AML get to 10,000 cars sold, £2bn sales, £500m EBITDA in 2024/25, what does that mean for profit - £100 to £125 million ? And what p/e is it sensible to apply to get to a share price target in 4 years ? If that profit figure is realistic you'd need a very smoky p/e ratio applied to hit Stroll's £100 per share number (£5 x 20 share consolidation).
A fair strategy IAPR. I hold a block of Melrose shares long term as I think they drive long term value in the businesses they acquire. I also from time to time trade the shares - buy another block of them after a dip as they usually rebound, sell after a decent rise as they tend to drift down. As always everyone, DYOR.
Everyone receives one B2 share (nominal value 15p) for every ordinary share held as at 6pm 27th August.
The B2 shares get cancelled on the 31st August.
Shareholders will receive 15p for each cancelled by B2 share on 14th September.
The share consolidation then reduces the number of shares to reflect that all shareholders have been given 15p per share of their company in cash.
So it's effectively a dividend but not given as a dividend.
My experience with Melrose is that it can drift for periods between news. I also think that it's heavy exposure to automotive and, in particular, aviation, means that in the short term next year or two then growth is going to be limited.
Long term it's a good hold I think - I'm sure the businesses are being and will continue to be "sharpened", and that a lot of growth (when it comes) will feed through to the bottom line. I agree with Freddie2 that there will be a special dividend from the proceeds of the Nortek sale when that is completed.
So a long term hold for me.
LTI I think you're right in that the next set of results will be key - in particular to provide greater clarity on exactly what the dividend is likely to be going forward. Lloyds in general seems in decent shape, and while there are clearly fears about inflation generally I can still see a drift upwards but little more until late July. The likely yield going forward will probably then determine whether the shares take another step forward or not.
Agree Smiler. If we don't have different opinions on the board we can become subject to groupthink. I don't think that AML will be profitable at bottom line (after D&A and Interest charges) this year or next, but for 2021 I do expect to see improving financial results reflecting better marketing and production management.
Nice gain so far today - maybe driven by the Airbus announcement that they plan to increase production to cope with demand and see demand for airliners back to pre-pandemic levels in 2025 ?
Think Boeing's shares have also bumped upwards.
Helu0104, you're right in that the payment of a dividend will reduce the net value of the business, and by extension the share price should drop to reflect that some of the business's cash has been paid out to the shareholders.
But this impact on the share price happens when the share goes ex-dividend, not when the payment is actually made. Hence the dividend is paid on the (25th May) to shareholders who were on the shareholder record as at (16th April I think).
So the reduction in the share price to reflect the dividend has already happen - please to say it's been completely overwhelmed by the general rise in the share price over the past few weeks.