Member Info for NigeCo

Toff, What did you make of the BT pension deficit in the results? I know that you were predicting a deficit of £10bln. Just looked again at the BT results page 25 regarding the pension deficit below, the deficit valuation was £6bln on 31 March 2019 to £1.0bln on 31 March 2020. BT contributed £1.3bln

"Reduction in IAS 19 pension deficit driven by increase in corporate bond yields 25 • IAS 19 deficit down from £6.0bn at 31 March 2019 to £1.0bn (net of tax) at 31 March 2020, driven by: – increase in the real discount rate – £1.3bn deficit contributions paid over the period – positive asset returns • Expansion in credit spreads during Q4 reduced IAS 19 without corresponding reduction in actuarial valuation • Triennial actuarial valuation to take place at 30 June 2020; aiming to conclude in first half of 2021 • Other developments: – consultation aiming to align RPI1 with CPIH2, without any mitigating steps, will increase the deficit – consultation on a new statutory funding regime; expectations for the new regime likely to feature in upcoming discussions with the trustee"

https://www.btplc.com/Sharesandperformance/Financialreportingandnews/Quarterlyresults/2019-2020/Q4/Downloads/Slides/q420-slides.pdf

https://www.dailymail.co.uk/news/article-8311651/Coronavirus-UK-TV-film-production-crews-start-filming-Britain.html

Fleccy... "I've just eaten some sour grapes so my blood sugar's climbing again."

LOL, there will be a few LSE board members with sour grapes (if still around) in 5 years time if the BT share price is back to 300p having bailed out @130p.

I agree losing the BT dividend was a hard pill to swallow, but in time could be the making of of the share price going forward. I also agree that it's time that the BT BOD showed some backbone and stood up to the regulator/government, we should be demanding a favourable percentage return on our shareholders cash that is funding FTTP.

I would like to know why the press haven't reported on this massive drop in the pension deficit? They would have reported on it had it increased, I'm sure.

Dividend cancelled until 2021/22.

Dividend will start again in year 2021/22, so I think I'm right in saying H1 dividend payment will be in February 2022. The dividend for the full year will be rebased @7.70p for the full year. A 50% dividend cut.

"BT pension deficit drops by £6.1bn as liabilities decline
BT’s total pension deficit stood at £1.1bn at 31 March 2020, down from £7.2bn the year before, as liabilities dropped from £59.4bn to £53.3bn, according to its full year results."

Am I seeing things??? BT pension deficit dropped by £6.1bln??? Why wasn't this reflected in the net debt of £18bln???

Or will this be reported on the 20th June 2020, the next update regarding the pension deficit???

Fleccy.... "I see my Lloyds investment as my most at risk due to Covid 19, but only indirectly and i'm not worried about it"

Fleccy, I know from reading your comments previously that you say your not worried about LLOY. I don't share your opinion on LLOY, my main concern with LLOY is that it's the UK's largest mortgage with the ownership of Halifax. With the bank of England governor reporting last week with him predicting a 14% shrinking of the economy, however he did also expect a V shaped recovery with the economy predicted to rise by 15% by the middle of next year, depending on the virus not spiking.

So this in my opinion puts mortgage banks at risk going forward, dependant on people being able to pay their mortgages. The downturn is predicted to result in a further 2 million unemployed with the worst recession predicted for 300 years. Yes it can be argued that banks are well capitalised compared to the 2008 financial crash. I see holding Lloyd's as a risk myself, but good luck.

Fleccy.... " i'm currently awaiting Vodafone's results tomorrow before i commit to anything. I suspect the picture will be more clear by the end of the week."

That may prove to be a wise move, if VOD were to do the same as BT, and axe their dividend for 2 years BT share price may fall along with VOD, having said that VOD look undervalued too IMHO.

Fleccy.... ""At least £60 billion if the same metrics are used, or 6 times the current value. The combined revenue of VM/O2 will be around £11 billion with a similar amount of debt to BT, at startup, of £18 billion. This is where the market is using a dysfunctional system to value like for like companies. The truth is, BT is currently sitting around a valuation of £10 Billion, because that's the valuation that the market makers have decided to give it."

Very good point Fleccy, will Mr. market maker wake up and smell the coffee?

Either VM/O2 is overvalued @£31 billion (more than likely) Or BT is undervalued @£10 billion (most definitely) If these valuations were the other way around with BT valued @£31bln and VM/O2 valued @£10bln, BT would still be cheap compared to VM/O2 valuation.

https://www.hl.co.uk/shares/share-research/202005/bt-dividend-suspended,-rebased-from-2021

Toff..... "No I’m afraid your memory doesn’t serve you. You’ll find no mention of a £200 lost anywhere in my posting history. I traded BT numerous times when it was at the £3 level and always made money. Then I ended up with a small position at £2.70, held them for ages and picked up some dividends. Those were the ones I sold. All told I don’t know how much I lost but it was a damn sight more than £200"

My apologies Toff, I must have miss-read the post, I did think to myself at the time of reading, why would anyone be upset at only losing such a small amount of cash.

Toff.... "At the closing price on Friday I could have bought about 28 percent more shares back for the same money I got when I sold. That proves that paper losses turned into monetary ones are sometimes very beneficial. The values of a share certificate changes everyday but the number of shares remains on it the same. And the number of shares I’ll have if I buy in again will be far greater."

If my memory serves me correctly Toff, when you sold BT you made a loss of £200, you then went short on BT and made a £750 gain = £550 gain. I wish that I could recoup my BT losses that easy. Lol

I must say EmmJane, you have only been on this board for a short period of time, already I'm impressed with your knowledge. I do look forward to reading your well informed comments, and will do no doubt in future, you're a great addition to the board.

Toff.... "Bearing in mind capital raising is easier and more financially rewarding when the shareprice is higher, it wouldn’t surprise me if BT don’t spring a rights issue on the market in a year from now. I expect the shareprice to be closer to £2 than £1 in a year and the higher shareprice could force the board’s hand. And I’d expect any rights issue to include all shareholders, not just II. And what better time to do it, while the pandemic is still fresh in people’s minds."

Toff, I don't think BT need to do a right issue, especially now that they have cancelled the dividend for the this year and next, saving billions that will be used to pay for FTTP. With you predicting that the BT share price will be "closer to £2 than £1 in a year" this gives me confidence with you being one of the biggest bears on this board, is now the time that you should be going long with BT? BT are trading on a P/E of only 6.03 with a Market Cap of only £10.36 Billion. This IMHO is a crazy valuation, for a company that churns out £2 Billion profit.

well done from me too Fleccy, good to the point letter & thanks for sharing. it will be interesting to see your reply.

Like I've said previously Fleccy, IMHO, BT have scraped the dividend for 2 years for a very good reason. They can now plead with the government/regulator for leniency going forward, or have they already done that. What springs to my mind is the meeting with Philip Jansen & Boris Johnson back in January of this year. After the meeting both were all smiles. Was this part of some kind of agreement with the two? You scratch my back, and I'll scratch yours. We may never find out the answer, but it makes you think.

Poundashare .....6/3/2020......"131 you can't keep a great company like BT down."

Poundashare .....8/5/2020......."How the mighty have fallen. This share will never recover without a merger or a takeover and a complete rebranding. The pension deficit detracts investors and the very name BT detracts customers. Why do you think there was never a rebranding of EE to BT mobile?"

You've changed your tune mate within 2 months.

All the discussion boards are the same, any negativity attracts posters with nothing positive to say, I'm sure that some posters delight in it.

"NigeCo. With the idiots who seem to be running stock markets in the UK, clearly being academic types that would not be able to change a fuse in a plug, unable to comprehend logic, who knows.
I would like to think that it would reduce, that after all is the point of the plan, I have said before down to 6-7b. The last report was June 19 so I assume it was written April, May time so would not have included payments up to June but would be included in this years report. And I believe the next payment is due this June so will not be included, which when it is out some may use to mislead investors as to the position just after the report that would not appeared until the next year, that is how some of them seem to work, part truth. The investments made before CV19 May well have been good enough to offset any drop during CV19. So hopefully £6-7b."

Thanks NDN for your reply and the heads up regarding the timing of the next payment in to the pension date/month. Yes I also agree the media like to paint a bad picture regarding BT and it's pension deficit. At some point going forward the media are going to have to change their negative opinion, once the pension deficit drops.

"Pension situation as of June2019 last trustees report, deficit £8.321b"

NDN, can we expect the pension deficit to have increased in the next update because of the current stock market drop, even though only 22% of the pension is invested in equities. If so what percentage drop are you thinking of?