Member Info for Poolwatcher

Well done Beachbum,

There are lots of ways to make money investing and one of the hardest is to sell your shares and buy back in advantageously.

For me, a lot depends on Wednesday's trading update - if it's positive or more or less as expected, then 350 might be too low a target to buy back in, even if macro events intervene adversely. For me 385 was too tempting!

GLA and DYOR

Thought it might help to double check the RNS about the buy back and it appears the company doesn't hold any shares in treasury for cancellation.

"Aviva does not hold any ordinary shares in treasury and therefore, net of shares pending cancellation, Aviva has 3,687,321,923 issued ordinary shares of 25p each admitted to trading."

Hope that helps.

Paul2566,

"If an investor held 1% of AV. stock before the share consolidation, they will still hold 1% of Av. stock after the share consolidation. " - this is not the case. Why?

Thanks to the earlier share buy back program over 245 Million shares are being cancelled on Friday, the 1% magically becomes 1.07%

Total number of shares currently in issue: 3,687,321,923
Shares held by company for cancellation: (245,225,489)
Total number of shares in issue to be consolidated: 3,442,096,434

An Investor holding 1 % of the company prior to cancellation holds 3,687,322 out of the 3,442,096,434
to my mind that is 1.071% of the company. These are the numbers that get reduced by a factor of 0.76 in this weekend's consolidation.

I know many posts on the chat are dismissive of buyback and consolidations that help directors meet targets, but I get more of the company for less outlay - so I can see a benefit to me too.

Now, the reported anticipated DPS of 31 p is based on £870 million / 3687321923 / .76
I might be wrong, but it looks to me that in actual fact the Dividend will be £870 million / 3442096434 / .76
(or 33.2p per share)

My hope is that the BOD will have room to exceed expectations when the next dividend is announced.

DYOR, and GLA

The cancellation of the buyback shares means that the total number of shares issued will reduce by 29%, but those being held by investors are being reduced by less than that (24%).

This means someone owning 1% of Aviva today will discover they actually own 1.06% once the consolidation has completed.

As for the interim dividend, while nothing is certain yet, usually it is a third of the total for the year. Analysts have pencilled in 29.6p for the year, while the board have suggested 31p for the year and the great sage of poolwatching (me) thinks we could have a pleasant surprise when the next dividend is announced, but for now - pencil in 10p and DYOR. GLA

Apologies, the estimated dividends going forward quoted in the circular are 31p and 32.5p

"For reference only, on the basis of the Share Consolidation ratio, if the Company were (in line with the updated dividend policy announced in the Company’s Results Announcement) to pay (i) a dividend for the financial year ended 31 December 2022 of approximately £870 million, such dividend would be equivalent to approximately 31.0 pence per New Ordinary Share, an increase of approximately 40 per cent. from the 2021 dividend per share; and/or (ii) a dividend for the financial year ended 31 December 2023 of approximately £915 million, such dividend would be equivalent to approximately 32.5 pence per New Ordinary Share and growth of approximately 5 per cent. on the dividend for the financial year ended 31 December 2022 as set out above. These remain estimated dividends which are for guidance and subject to change."

cut and paste from the circular

Might Aviva justify a premium to LGEN?

Two thoughts:
1. LGEN has had to hold a fire sale of Russian Assets, Aviva completed its sales in a more robust market - I don't know the overall figures, but Aviva has timed its sales well.
2. Might the sale of the French business (and the associated loss generating exposure to Golden Ticket holders..) translate into higher than expected EPS and DPS figures?

I don't have a crystal ball, but for the BoD to quote 31.5 p rising to 33p in 2023 suggests they are more than quietly confident.

The data is available for everyone's perusal. Let those who have eyes, see.... or perhaps DYOR and GLA!

Every 1000 shares now, that were producing £210 p.a. in dividends are expected to turn into 760 shares generating ~ £240 p.a. alongside a capital return of £1001.69

How can this be?

Well, the cash pile of £7.5 Billion from sales has been used as follows:
£2.75 Billion of that cash to reduce debt (helps profitability)
£1 Billion used in the share buyback program (fewer shares = more dividend per share, etc)
and the remaining £3.75 Billion is being returned as capital rather than as income to do with as you please, hence my gratuitous link to 'Choose Life' from Trainspotting featuring Ewan Mcgregor
https://www.youtube.com/watch?v=viIl2vEk6s4

The company want the benefits of the improved numbers to be obvious to all - hence the consolidation to keep the 'after' price at a similar level to the 'before' price.

In my view, there is a good chance Mr. Market will like the improved numbers from May 16th.
DYOR and GLA

Hi Bertram,

Thank you for asking for guesses, which is probably the best anyone can offer!

LGEN was financially strong enough to keep paying dividends when many companies stopped due to covid uncertainties - its one of the reasons it has become my largest holding. Other reasons are the confidence insiders seem to have as shown by director buys, and that business operations appear to translate into healthy tangibles that shareholders will increasingly benefit from over time.

Examples of my research include simply Wall Street e.g. they suggest LGEN is trading at 60% of a fair value,
yahoo finance linked articles, e.g. this one from motley fool
https://uk.finance.yahoo.com/news/5-best-shares-buy-today-121508016.html

and of course comments from other interested individuals and so on.

I too would appreciate any guesswork from others on this blog, for example I'm anticipating a Final dividend of at least 12.64p to be declared in March and paid in May / June based on this years final divi to be similar to the final dividends for the last 2 years.

Hope that helps, DYOR and GLA

After a bit of research I found that 1.6 Million shares at 0.8p have been subscribed to by Mr Plimmer.

That explains the 1.2 Million (0.8 x 1.6 Million) I didn't understand in the "Placing" document
(n.b not he 'firm' placing)

The conditional placing increase PDMR ownership (& other employees) from 4% to 8.83%

Who are these people?
Why aren't we being told who they are?

Usually an RNS is required when PDMRs trade.

Every time I read the announcement something new crops up that needs explaining.

1. Who benefits from splitting the rights issue into 2 parts?

The 'Firm' placing (clue is in the name..)
- 2.7 Million to pay off unspecified promises
- 1.9 Million to pay off the board
- Another 1.2 Million already subscribed (??)
- 0.5 Million for operations

Conditional Placing

PDMRs and other employees go from 4% of the company to 8.83%

shouldn't we be told which PDMRs are involved in this?

Looks to me as though all the insiders are increasing their positions and the director with hedging experience is leaving.
Just saying.

My back of the envelope calculations The £750 million share buy back ought to result in those shares being cancelled, this reduces the number of shares in issue by about 5%.

As nothing has fundamentally changed yet, the market cap divided by fewer shares ought to push Av. to 420

As for special dividends - £3.25 Bn is approx 89p per share after the buy back. Experience with Admiral suggests its better to hold the shares before any special div is announced and anticipate a big dip after it is paid.

We might see a peak above £5 and dividends increased by 5% above what they would otherwise have been.
As always, I'm no expert and DYOR.
GLA

I for one, would happily see my stake in Kefi lost entirely if that means peace in Ethiopia, and unfettered access to aid for the starving in Tigray.

However, large scale mining could provide opportunities for the country where humanity began to develop a modern suit of industries supporting self sufficiency.

Unsurprisingly, Kefi in Ethiopia have credibility problems in my view - The TK delays go back many years, and recent security issues have highlighted the preferred board response to be one of kicking the can down the road. Accompanied by extensive frustration on this chat!

The recent seminar with other mining companies like condor gold (Nicaragua) showed Kefi has a weaker leadership in terms of the vision for getting ore out of the ground, crushed and electrolysed to realise the deposits. The infrastructure for transporting gold remains in need of improvement and the financial processes for converting transactions into international payments is untested.

Saudi has a much more stable environment than Ethiopia, yet progress there also seems slow.

At times I feel I should reduce my holding and at other times I want to increase. Plenty of potential catalysts to lift spirits but its a hold for now. GLA remembering I'm no expert and to DYOR etc

I've increased my holding by 30% on the basis of these results, as Shell's debt burden appears to be shrinking fast as the global economy picks up. 7 Billion returning to share holders while a million shares get cancelled... points upwards IMO.
Why not a strong buy? ESG of course.

I'm no expert, DYOR etc