Member Info for OneStep

Https://www.bbc.co.uk/news/articles/c4gpy20rgq9o

Surely prohibited by the data protection act ? Will this be another instance of sharedolders loosing out due to malpractice by Lloyds ?

To help shareholders decide whether to accept the next renumeration package for directors they need full financial disclosure from them. If they don't then they should be dismissed without any compensation !

Just think what will happen if the proletariat lose the few human rights they allegedly have !

Do you think Hunt could persuade Rishi to invest in the UK?

Rishi's plan is working

1. reduce capital gains tax from to 20% from 28%

2. invest in the USA to receive returns in the form of capital gains only

3. Crash the UK economy to improve the $ £ exchange rate for his returns

4. Laugh all the way to the bank

Below are the annualised Internal Rate of Returns from LBG buybacks to today (SP 41.5) based on share price & dividends .

I have consolidated the 100K+ individual investments into pre & post ex dividend totals for each year.

Start Annualised IRR%

08/03/18 -4.12%

19/04/18 -4.01%

16/08/18 -3.99%

01/03/19 -4.90%

04/04/19 -4.77%

08/08/19 -1.05%

25/02/22 -0.55%

07/04/22 2.14%

04/08/22 0.11%

23/02/23 -11.39%

13/04/23 -14.08%

03/08/23 -5.33%

The BOD and some shareholders may be celebrating the success of the buybacks in reducing the ordinary share value but I'm not one of them.

I don't care about changing the ordinary share value from one nominal value to different nominal value, its only effect on profitability is to add an extra unnecessary cost.

I know that if the money spent on buybacks was returned to me as dividends then I would have achieved higher returns if I had decided to re-invest it (even if the re-investment was in LBG shares!). I can only think that shareholders that celebrate the success of buybacks must believe that they could not do better than the BOD.

Is the increase in dividend 15.0% ?

2022 interim dividend paid £545m to shareholders, LBG values the 2023 interim at £594 this gives an increase of 9.0%.

The given 2023 value does not take into account the reduction of shares due to buyback reductions, for the current 64.4B shares the increase is only 8.1%.

Could France be bought for about $2.8T ?

I think not.

LTI

I'm not happy that 31% of my investment is held in a non-interest account not contributing a penny to earnings/profit.
Of course I can see it from the BOD point of view, returning 5 Billion to shareholders via dividend would reduce the share price by 15% reducing it to around 42p.
If they also changed buy backs to special dividends that would put the share price into 30s.
This is would be a valid price to compare to historical prices.
The BOD are artificially supporting the share price to hide their incompetence and you fall for it every time and it's costing shareholders.

A1
The Retained Profits Account Balance (form which dividends are paid) history in £ millions is
Dec 2014 5,692
Dec 2015 4,416
Dec 2016 3,600
Dec 2017 3,976
Dec 2018 5,389
Dec 2019 3,246
Dec 2020 4,584
Dec 2021 10,241
Dec 2022 10,145
The announced returns to shareholders this year are covered from earnings so there appears to be no intention to reduce it. I think you are correct the BOD are hanging on to too much of shareholders money and should return more of it asap.

LTI

Help to me understand, can you complete this simple example ?

Book Value = £15B
Market Valuation = £15B
Shares = 2
Market Share Price = £7.5B
Book Value/Share = £7.5B
--------------------
Company Buys Back 1 share
--------------------
Book Value = ?
Market Valuation = ?
Shares = 1
Market Share Price = ?
Book Value/Share = ?

LTI

Indeed share capital is reduced, but it is mandatory to increase the 'other reserves account' by exactly the same account so the nett liability doesn't change.
I didn't know this until I looked at the balance sheets and saw the entry and did a little bit of research.
(Interestingly? The share premium account is not reduced so it looks to me like the accounting rules 'lock in' all the receipts from share issues for eternity?)
I presume the retained earnings reduction you are referring to is the purchase of the buyback shares?
this is what causes the reduction in valuation.

To be clear when I say market value falls I don't mean on one day so you may not see the market value fall at all, as the effect is spread across the buy back period when earnings are coming in to compensate.
Better terminology may be the market value is reduced/lowered by the buy back cost.

Consider how the balance sheet would differ if a special dividend had been issued instead of a buyback.
All I can think of is
Retained Profits : the reduction of buy back cost would move from buy back row to dividend row.
Share Capital : the reduction by the nominal share would be removed
Other Reserves : the compensating increase by the nominal share value would be removed

Based on this I say that the Market would value the company the same after buy back or dividend issue.
So if a dividend issue causes a reduction in valuation then so does a share buy back.
It's just that you don't see from the share price or even the valuation of your holding because its spread over the buy back period and at the same time earnings are increasing the retained profits to counter the reduction.

I don't think looking at book value/share (or Market Value/Book Value) is useful in this situation.
The market is 'happy' with its total valuation even though it may be very different to the Book Value, so then it must also be 'happy' at the individual share level.
When the Market produces a valuation then different elements of the Book Value will be valued at different percentages.
Retained Profits I suggest would be valued 100% because it's cash and in an account which you can expect the surplus to be returned to shareholder in the not too distant future. So doing a before and after calculation will produce 'misleading' changes in the metrics.
Of course Book Value/Share is useful for deciding whether a buy back is a good idea.

I wouldn't have replied if had not posted again.
I can feel you getting very frustrated and fed up with me so I will understand if you don't respond.

Lti

The balance sheet for LLoyds shows for buy backs 2022

Share Capital : (453) value of shares at face value
Other Reserves : 453 mandatory to increase by the reduction of Share Capital
Retained Profits : (2013) full cost of buyback
Total : (2013)

As I see it :-
Clearly the shareholders equity has reduced by 2013.
The outstanding share holders always 'own' 100% of the equity!
So the value to the shareholders after the buyback has fallen by 2013.
When the cash equity falls, the market valuation also falls.
The share price doesn't fall because there are fewer shares in the same proportion to the drop in the market value. So the value for every share holder stays the same but, because in total there are less shares, the market value has fallen by the buyback cost.

If you disagree please explain to me how reducing the number of shares increases equity value to offset the drop.

SUFCESSEX
So you fundamentally disagree with Charlie's plans to grow the company through investment.
How many years do you want to wait, it's already 5 years since buybacks started.
If you had that extra share of the £4B+ spent on buy backs in your back pocket you could now be buying shares at 49pish.
You'd be even better off in the future.
The problem I find with all the arguments for/against buy backs is there are no numbers attached or those attached are incomplete (i.e. LTIs first response which didn't even mention the £4B spent).

Lti
For every £1 spent on buyback the book value goes down £1.
We also know that the market value falls by £1, the evidence is when shares go ex-dividend the market value falls by the total value distributed in the dividend.
But this is a diversion from the question of whether buy backs have been the best or worst use of shareholder money.
Someone who never evaluates the consequences of previous decisions will always go on making the same mistakes and there will not be any improvement in decision making.
You obviously think that improvement is not desirable!

The question I think is fundamental to investing, most investors look for the 'best' returns and would like the businesses they invested in to utilise their money effectively to produce the best returns.
The fact is that returning the £4Billion+ via special dividends would have produced a better return to the shareholders and put more money in their pockets.

Just one question to the pro buy backers.
Can you identify anything that LBG could have done with the money spent on Buy Backs since 2018 that would have produced a worse return to shareholders?

"The buyback will simultaneously shrink shareholders' equity on the liabilities side by the same amount."
Shareholders equity is NOT a liability.
It is = Assets - Liabilities.
Buybacks are a divestment, i.e. they reduce Assets/Book Value/Equity so are 'literally' shrinking LBG.
NO liabilities are reduced.
Which is the opposite of Charlie's plan to go for growth?
Dividends are also a divestment and have the same affect on ROA & ROE!
I'm surprised of the need to post this very basic information.

The flexible ISA basic rule is that in any one financial year the nett addition to your ISA must not exceed the annual allowance ( £20000) at any time during the year. So any withdrawal (in the financial year) adds to the amount you can invest later in the year in addition to the annual allowance.

The link below gives several examples which should make it clear.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/684282/worked_examples_of_flexible_ISAs.pdf

What's a good price for some thing which has a face value of 10p, is valueless to you and you are going to throw in the bin as soon as you get it?

I started the "Don't Pay UK" yesterday but now find that it has been removed and I'm unable to easily see the valuable contributions made to it.
Could someone who was involved in the subject post the main points that came out in the 'conversation'.

Thanks
OS

Charlie's Day One Statement
https://www.lloydsbankinggroup.com/insights/charlie-nunn-day-one.html
You can judge for yourself his attitude towards share holders.

LTI is correct.
Barclays Dividend was announced 13 Feb 20 Ex Date 28 Feb Pay Date 3/4 and not subject to shareholder vote. This means it can be cancelled up to the pay date!
Just another factor for Investors to take into account !
Ex-Dividend dates do not have any impact on whether dividends can be cancelled, who would have thought that.
It can pay to know the rules !