Member Info for MikeM14

Hi Renoljo,
You say:-
"Given the current market value is 260p, I don’t consider this to be a good offer.".
In effect, I think you are saying that you think that the current market price is too high. In that case wouldn't it best to sell your shares PDQ, and certainly before they get to ex-dividend date next Thursday, when everything else being equal you could expect the market price to fall to about 240p (subtracting the ordinary dividend of 3.5p and the special dividend of 16.8p)?
The per-share values for the ordinary dividend and the special dividend were, if my memory is correct, announced with the results on 29 July. At close of play the day before, the share price was only about 230p. On the day the results were announced, the share price rose considerably, to about 248p (I'm just taking those figures from the chart available on this site). Since then, the market price has risen quite a lot more, to just over 260p. Presumably most of that rise has been because "the market" was pleased with NWG's future prospects (based on what was said in the results), rather than because of the mechanics of this special dividend combined with consolidation.
It's a bit of a difficult one to call. If I had sufficient NWG shares to have a tax liability caused by the large dividend, and the shares were not in an ISA (or other tax wrapper), I'd be quite tempted to sell for 260-plus early next week if I could. However, neither of those conditions apply for me.
It's also worth bearing in mind that the consolidation ratio was decided on when the market price was probably a lot lower than it is now.
All the best, whatever you decide.
Mike.

Tuneup,
No, that's not how I read it. The CEO, along with all the others, had about half the shares withheld "to satisfy associated tax liability", as stated in the announcement.
Sorry to butt in again.
Mike.

In case anyone is interested and hasn't seen the RNS announcement today, HM Treasury's stake in NWG is down again slightly, to 47.99% (prev 48.21%).
Rgrds,
Mike.

Cabrawest,
"Is today ex divi day?"
Yes. It's in the RNS announcement of 28 July, complete with timetable:-
https://www.lse.co.uk/rns/SHEL/shell-plc-second-quarter-2022-interim-dividend-zmev81xfmtskfaa.html
Mike.

Hi again kassam83,
No you don't get new shares "rather than" the special dividend paid in cash.
You get the special dividend paid in cash (16.8p for each share you currently own. You also get a new type of shares that *replace* the shares you currently own. If you currently have, as an example, 1,400 shares, instead you will end up with £235-20 cash plus 1,300 of the new type of shares.
Probably best if you just read the announcement directly yourself. It looks quite long, but it's not too bad:-
https://www.lse.co.uk/rns/NWG/notice-of-general-meeting-and-class-meeting-c9a32krjtqj4yge.html
Regards,
Mike.

Hi kassam83,
Yes, that's when you get your new, consolidated, "larger" shares to replace your existing shares.
Perhaps rather than "due to be paid" they should have said "due to be admitted", or similar.
I'm presuming that HSBC is your broker.
Mike.

Hi kassam83,
Yes, that's when you get your new, consolidated, "larger" shares to replace your existing shares.
Perhaps rather than "due to be paid" they should have said "due to be admitted", or similar.
I'm presuming that HSBC is your broker.
Mike.

Hi Fonzius,
Re your post at 13:38 today.
I've checked your numbers, and they look correct.
The problem is that the "new" share price won't necessarily be £2-54, or the same as today's "old" share price. Some things are fixed, and some are variable. What is fixed is the current total number of shares, and the amount in pence of the dividend per share that they'll pay out - 16.8p. That then fixes the total amount of cash that will be leaving the company. More recently, as per today's RNS announcement, they've also fixed what the "consolidation ratio" will be, ie 13 "new" shares for every 14 "old" shares. To do that, they've had to assume a starting market price of the shares. As this was probably done a couple of days ago, they've used a market price which is now out of date. I think that the market price has gone up a bit in the last few days. So it might have been, say, £2-45, or something like that. If they had to do it at today's market price, they'd need to use a slightly different consolidation ratio for the theoretical price of the new shares to be the same as the current price of the old shares - it might be 27 new for 28 old, or 15 new for 16 old, or something else. It's actually a very complicated calculation, and all they can do is the best they can. They can't foresee exactly what the future share price will be, and they certainly can't control it. If you use a starting price of £2-54, as in your example, you might be "down" £188, but if you use a different starting price, you might be "up".
It's not an exact science, because no-one can predict exactly what "the market" will do in a few weeks' time.
I'm sorry I can't explain it any better. For Tesco, I put together a "spreadsheet" on the computer where I could see the effects of the market price changing, but when I look back at it now, I realise that I was over-analysing the situation for what are actually very small differences. £188 sounds a lot of money to you or me, but it's actually very small in the context of £35,000.
Regards, Mike.

Hi Janus1,
You ask:-
"If the payment does not impact on the share price due to consolidation how do you end up with less value in the shares? Sorry to ask but this is really perplexing me.".
In simple terms, because you end up with less shares (at the same price per share) than you started with.
Using hypothetical numbers to make it clearer, if you started with 14,000 shares and the share price was £2-00, your shares would be worth £28,000.
If they then paid a big dividend of 14.2857p per (old) share, you'd have about £2,000 cash from the dividend.
If they then did a 13-for-14 consolidation to get to get the share price back up to £2-00, you'd now only have 13,000 new shares with the price of £2-00, ie £26,000.
Instead of £28,000 worth of shares, you'd now just have £26,000 worth of shares, but plus £2,000 of cash.
I hope that helps.
Mike.

Hi MikeS02,
Thanks, and no problem.
I don't feel stitched-up with the proposals in any big way, and personally found their explanation and rationale pretty clear and sensible. However, with consolidations in general, I feel a few little gripes at a practical level for what more-experienced investors than me call simply a "cosmetic" exercise. I don't understand why there's so much importance attached to keeping the share price looking the same - surely it's easy enough with modern IT systems for the consolidation to be factored in to qualify the history of the share price. Cynically, maybe something to do with the way directors' remuneration criteria are worded...
At a practical level, some gripes are:-
(i) If, like me, you like your shares in "round" numbers, it will cost you a broker/platform fee to buy some more to get yourself back up to a round number, as well as stamp duty and the dealing "spread".
(ii) Fractional entitlements, depending on exactly how the document is worded, are not a big issue for large holders, but if you don't get the cash for the fractional entitlement back, it's more of a nuisance for a small holder. If you owned 14,000 shares and it just went to 13,000 new shares, there's no problem, but if you owned 15 shares and it got consolidated to 13 new shares plus fractional entitlement of .928 share, and you didn't get the cash equivalent of the .928 share back, you might be a bit miffed!
(iii) Presumably (and I'm speaking from ignorance here), NWG have to pay an external organisation some sort of fee for "doing" the consolidation. That fee is then money lost to NWG and thence to its shareholders.
Rgds, Mike.

Hi Fonzius,
I'd like to think that I am not asleep, despite the heat!
I've read today's RNS announcement, but not yet the full document. In effect I think you are right - this is a "zero-sum game". As the per-share amount of the ordinary dividend, and of the special dividend, are fixed, as previously announced, and as the consolidation ratio is now fixed, the only variable is the market price of the shares, which of course can change continuously all the time the markets are open.
If there were no consolidation, the share price would, all else being equal, fall slightly when it goes ex-dividend for the ordinary dividend, and fall quite a lot more when it goes ex-dividend for the (larger) special dividend. Broadly the aim with the consolidation is to restore the share price back up to what it had been if there hadn't been a special dividend. You end up with less value in your shares, but more cash via the dividends.
The thing as a private investor to watch out for is that the large dividend payment(s) is potentially taxable as income if your shares aren't held in an ISA - in effect you're being taxed to get some of your own money back! I got caught out with Tesco last year with a similar situation, but I'm not going to let it happen again - my NWG shares are in an ISA.
I hope that helps.
Mike.

Bres1960,
In one of your latest posts, you say:-
"There are blue chip UK company shares today that are guaranting a 7.2% annual return on shares that are currently priced at almost half the current cost of a BP share of £3.80p?".
I'm not sure *any* listed company can "guarantee" what dividends will be paid in the future, or how its share price will behave in "the market" (manipulated, as some would claim, or otherwise). No shares are without risk. In the case of BP, I suspect that many on here (sadly for me, myself included), will have suffered through what happened in 2010 with the Gulf of Mexico. Assuming you actually hold BP shares, and aren't just on here to try to push some kind of "agenda" (which some of your posts suggest), out of interest, and for all our education, what specifically drove you to buy BP shares rather than any others?
Mike.

Failford,
"Any ideas folks re jump".
Probably media headlines suggesting that a windfall tax on renewable electricity generators is now *less* likely, plus general market is currently up, plus possibly reaction to the announcement of a confidence vote on the UK PM.
Mike.

Gary59,
Thanks for the welcome. Share price wise, it's looking good this morning (my effective cost for my first tranche of LGEN was around 246p, but I missed the most recent dividend). VOD (I'm a relatively small LTH) sadly down considerably this morning, but at the moment I'm just "keeping it in the drawer" for the dividends - I can't see me ever not being under water with it in the foreseeable future but I'm not going to keep averaging-down ad infinitum.
Mike.

Hi TheTrotsky,
I am a relative "new boy" to the LGEN discussion board, and I think you may be reading far too much into my comments. I did not seek to cast aspersions, suggest that any particular shares were "tarnished", or suggest any posters had ulterior motives! If my postings in any way came across like that then that was not my intention and I'm sorry. I have only been a holder of LGEN shares for about a month (although I've been following them for a year or so), and, by coincidence, am a fairly recent holder of GSF shares. I simply pointed out a comment that I thought was factually wrong, and if my "butting in" like that was seen to be less than helpful then again I am sorry about that. I had not read the long-running thread in its entirety, only about the last half of the postings.
All the best,
Mike.

Sotonspike, and others,
Further to the long discussion about "matters GSF" below, I've just had a "eureka moment" and think that the poster Thrugelmir who started all this off might have actually been thinking of JLEN, not LGEN under which he/she posted it. JLEN is an environmental group, relevant to the type of activities GSF gets up to.
If that's the case, then all the more reason to discontinue that topic here on the LGEN board!
ATB, Mike.

Thrugelmir,
You say:-
"GSF is an investment company not an investment trust.".
I'm not sure where you've got that from.
Near the top of the "Share Price" page for GSF on this very "LSE" website, it says:-
"Gore Street Energy Storage is an Investment Trust".
And on GSF's own website, under FAQs, it says:-
"Gore Street Energy Fund PLC is a publicly traded investment trust that is listed on the main market of the London Stock exchange (Ticker: GSF).".
It couldn't be much clearer.
I realise that this is getting a bit off-topic for discussion on an "LGEN" board.
Mike.

I think "CFFO" is Cash Flow From Operations.
Presumably (without looking at it in detail) 30% is an increase over the previous percentage.
Mike.

Brix,
Thanks.
ATB, Mike.

CSDI1962,
Your post at 23:18 yesterday (6 May):-
"Why do BoDs waste money on buybacks.".
Why do you keep going round and round asking the same question?
This time it has been answered by 67Sam, Bumble1968 and LTI, and maybe others. The answer doesn't change.
As recently as early April you asked a similar question, and it was answered similarly at the time. I even posted a simple worked example, which I think you saw at the time. The effect of the buyback is to raise EPS, potentially allow the dividend (per share) to be increased, and, provided the buyback is done at a lower price than NAV per share, increase the NAV per share.
You say:-
"The money thrown on buybacks, while reducing the number of shares also reduces the net asset value as the cash is gon forever.". If done at a good price, it actually *increases* NAV per share. Also, if a dividend is paid, do you not see that the cash paid out as a dividend, also, is "gone forever" from the company?
Finally, you say:-
"...having sold out recently - but planning to buy back in when funds allow.".
So you're planning to buy something that, in the same email, you're saying is in effect a waste of money. Can you explain the logic of doing that?
Mike.