Member Info for MikeM14

y11,
"Anybody brave enough to sell on the 13th May and buy back on the 14th May. I have seen this pattern and done it a couple of times you get the dividends and buy back cheaper."
Are you sure you're saying what you mean?
Given that ex-div is 12 May, if you sell on 13 May you will indeed get the dividend, but you'll in all probability get a lower price for your shares given that it's gone ex-div. How do you buy back on 14 May, given that it's a Saturday?
Given that you're just giving away 2 lots of dealing spread, one lot of Stamp Duty, and possibly 2 lots of broker commission, what are you actually gaining?
Mike.

Chips,
You ask:-
"When do the Buyback shares get cancelled.
Is it after the whole buyback program is complete .
Surely if that the case Lloyds share price would rocket on cancellation of the whole buyback shares".
Although it doesn't fully answer your question, you can get an idea of how it works by looking at the monthly "Total Voting Rights" RNS announcements. The most recent one was on 1 April. Compare the number in that with the number in the one at the end of February.
https://www.lse.co.uk/rns/LLOY/
I hope that helps.
Mike.

Chips,
You ask:-
"When do the Buyback shares get cancelled.
Is it after the whole buyback program is complete .
Surely if that the case Lloyds share price would rocket on cancellation of the whole buyback shares".
Although it doesn't fully answer your question, you can get an idea of how it works by looking at the monthly "Total Voting Rights" RNS announcements. The most recent one was on 1 April. Compare the number in that with the number in the one at the end of February.
https://www.lse.co.uk/rns/LLOY/
I hope that helps.
Mike.

Nala,
"In this case I cant see the Mail having much effect.".
Agreed. Also, I find the timing of the Mail on Sunday's article ("advertorial"?) a bit strange. This fund-raise was hardly "new news" as GSF announced it nearly 2 weeks before the article came out. Unless, of course, it was becoming evident that uptake was going to miss targets (which I think is extremely unlikely).
As to comments by others about disappointment that existing holders weren't given first refusal, this will all be to do with "disapplication of exemption rights", an almost-standard resolution at AGMs, which, if voted for at the AGM, gives the company authority to do such fund-raises without going to existing holders first. I thought there was a limit on % of new shares - maybe 10% without looking in detail - where they could do this. Maybe GSF had a higher % (I'd have to look).
Mike.

Hi Woody111,
"What was it called when Natwest changed the share ratio / price which went from from 40pence to £4.00?".
If you're asking what the process is called, it's a "Consolidation", or, more fully, a "1-for-10 Share Consolidation".
If you're asking what the company was called when it did the consolidation, it was definitely Royal Bank of Scotland (RBS), not NatWest Group (NWG), because the consolidation took place in June 2012 whereas the name change wasn't until about July 2020.
I hope that helps.
Mike.

Hi CSD1962, and thanks.
I guess every individual investor will have their own preferences in the "certainty of cash now" vs "long-term value" (or, as some might cynically see it, "jam tomorrow") spectrum. The problem, as I see it, with a large special divi now is that it's a one-off and in all probability the share price will just fall as a consequence so overall you're no better off. Of course, if Lloyds paid me a special now of 100p per share and then the share price went to zero I wouldn't necessarily complain...
Mike.

Thanks Aristonia, and for the "recc".
Of course the mechanics of these things have overall market forces superimposed on them which can swamp things.
I had a shopping list of all the shares I was going to buy or top up today in my ISA for the new tax year, and thought I'd done pretty well with my buying prices. Needless to say, they're all now "under water". A good thing I left some cash uninvested...
Mike.

Thanks ronaldjohn123, I'm glad it made sense. However, surely it answers your question? To put LTI's answer in simple layman's language, if you own some Lloyds shares, and do absolutely nothing, you will end up owning a bigger fraction of Lloyds, and therefore of its profits, than before, as a result of the buyback.
Mike.

I watched yesterday evening's marathon debate here about the benefits, or otherwise, of the Lloyds share buyback programme with interest and sometimes despair.
I have put together a simple worked example, so people have something tangible to look at. It's all in simple steps, with a letter for each step for quick reference if someone thinks it goes wrong at a particular point.
My conclusion is that (everything else being equal) buybacks increase EPS and potentially dividend per share, and if the buybacks are done at below NAV per share, they also increase NAV per share.

"Company A" consists of a factory (which generates the company's revenue and profits), cash, and debt. The company has revenue of £200k per year and profits (after tax) of £10k per year. The company has a policy to pay 50% of its profits as dividends. The company currently has 200,000 shares. The share price is currently 40p.
(a) The Balance Sheet is as follows:-
Asset – Factory (with working capital) valued at £120k;
Asset – Cash of £40k;
Liability – Debts of £60k.
(b) NAV is £100k.
(c) NAV per share is 50p.
(d) EPS would be 5p.
(e) Dividend per share would be 2.5p.

"Company A" then decides that it will use £16k of its excess cash to buy back, and cancel, some of its own shares.
(f) The Balance Sheet would now be as follows:-
Asset – Factory (with working capital) valued at £120k;
Asset – Cash of £24k;
Liability – Debts of £60k.
(g) The number of shares bought back at the market price would be 40,000.
(h) Therefore the number of shares remaining would be 160,000.
(i) NAV would now be £84k.
(j) NAV per share would now be 52.5p.
(k) EPS would now be 6.25p.
(l) Dividend per share would now be 3.125p.

I've checked it all before posting, but if anyone spots a typo that has got through, or thinks it's fundamentally wrong, then the letters should make it easy to point out where it is flawed.
Mike.

meoryou,
Purely from qualitative memory (I hold both BP and Shell), they both cut their dividends at about the same time, near the beginning of the COVID pandemic, but Shell cut theirs more - down to about a third of the previous level whereas BP only cut theirs to about half the previous level. Since then, Shell have increased theirs more rapidly from the "cut" level.
Obviously we have seen the respective share prices behave in somewhat different ways since then - how much that's down to the different dividend treatments, and how much down to other specifics (eg Rosneft in the case of BP) will I'm sure continue to be the subject of much conjecture!
ATB, Mike.

Thanks hardup.
Without doing all the calcs myself, that seems reasonable. It all got a bit lost due to the length of the thread.
Or, "I was wondering when someone would spot that one, Wilson" if you're a Dad's Army fan!
Please keep up the good work.
Mike.

hardup,
Lloyds have said the total cost so far has been £481,153,662-32. Your figure is £505,636,264-02. Where have you got your figure from? That is a mark-up of over 5% on Lloyds' stated figure.
If you're comparing the figures from the same day, and apologies if you're not, how can your figure be right? Stamp Duty on shares is only 0.5%, not 5%.
Mike.

LeeRex, and hardup,
"If no one owned the shares, who gets the Divi?"
Interesting question, but how would such a situation arise?
If a company - Lloyds in this case - creates and issues new shares, then someone has bought them and given the money for them to Lloyds. That "someone" owns them and gets the divi if he/she holds the share at the right time (ie when it goes ex-divi). If the "someone" then sells the share in the market, whoever he/she sells it to, the buyer, now owns the share and gets the divi from it (subject to owning it on the correct date). If Lloyds buys back the share and cancels it, it ceases to exist so the question "who owns the share and who gets the divi?" doesn't apply. The only common exception I can think of is if Lloyds buys back the share and *doesn't* cancel it but sticks it in Treasury. While it's in Treasury, ie until it is reissued, it doesn't attract benefits such as getting the divis and having voting rights.
What other situation were you thinking of?
Mike.

Let's hope so Monkshood. It's also gratifying that there don't seem to be any reports of turbines having been damaged by Storm Eunice, etc, in February.
Mike.

I find it slightly surprising that today (28 March), when in theory the market will be "awash" with some 9.2% more, new, TRIG shares, bought at a discount (to market price), that as I write the share price is actually *up*!
Oh well, one day I might actually understand how the market works...
I'm not complaining, mind, as I did buy a few more in the market while the price was depressed because of the fund-raising.
Mike.

fairdealer20,
Thanks for educating me further about PB. One day it looks as if I'll have to "bow to the inevitable" and get a smartphone.
In the meantime, as I only wanted to do a small top-up and round-up on my TRIG holding, I'll probably just buy in the market while the price is depressed - I'm due to receive a couple of dividends from elsewhere in the next couple of days.
Mike.

Paul2566,
And to add insult to injury (re your 2 posts below):-
"RBC cuts Unilever price target to 3,200 (3,600) pence - 'sector perform'."
ATB, Mike.

Thanks IP3LY for the explanation of how PB works. I evidently didn't read their website properly. However (and please correct me if I'm wrong) you need a smartphone to use PB - being the luddite that I am, I don't have a smartphone so couldn't use it anyway.
Mike.

Paul2566,
Sorry, but I think your 2nd sentence in your 08:19 post is incorrect. It's not a limit of £250, but a minimum of £250. From the RNS announcement:-
"There is a minimum subscription of £250 per investor under the terms of the Primary Bid Offer which is open to existing shareholders and other investors subscribing via the PrimaryBid mobile app.".
Gerry557,
I'm not sure whether you actually go through a broker at all when using PrimaryBid. I haven't used it myself, but I looked at it briefly "last time" and decided that it wasn't for me. It seemed to me (I may have misunderstood, though) that by using Primary Bid you'd end up with various small pockets of shares in Primary Bid which would then involve money, hassle and delay if you wanted to get them moved to your normal broker/platform to consolidate with the pool of shares which was your main holding.
I agree, as an existing holder, that this "disapplication" of pre-emption rights is somewhat annoying, but, as you say, it makes such fund-raises easier for the Company (and shareholders voted for it...). Last year's "Share Issuance Plan" was due to time-expire on 4 March (2022) and still had "headroom" left - I don't know why they didn't use that (or start a new one).
Mike.

Absolutely, LTI!
Mike.