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Billy, you are probably right. I have never seen shares held by Treasury after a buy back being used for anything but I guess they could be re-issued in lieu of cash. I'm sure that a resolution would be required for that (ie outside of the current legal restriction of use) but possible. But I don't think they can be liberally used by the company for whatever means without specific legal permission.
DT, that is a good question and one I cannot answer with any certainty. I do recall one instance where it was more hassle to cancel than to leave so they left them in Treasury. There are quite few legalistics to go through to cancel. Having said that, it is not difficult just inconvenient and slightly sloppy housekeeping. I understand your scepticism and a notification confirming that they will be cancelled in the future would be helpful.
DT, they would not be available to sell nor given away. True, they technically exist as opposed to being formally cancelled, but they can not be used for anything. They are as good as cancelled and investors should consider them as cancelled. I've seen this before in some of the plcs that I worked for and it is not that unusual to hold them in Treasury but uncancelled. I would not worry about them for a second.
LS, I don't know the ins and outs of this share back plan but I presume there are parameters within which it has to work. Perhaps there is discretion to buy back up to 100% extra than the stated normal amount of 2.5m or something like that. But I totally agree that they cannot amend their policy based on inside information.
I suspect that they have the right to buy back any between 0 and 5m on a daily basis and have this arrangement with their brokers. There has to be a limit or market manipulation would be rife. I'm guessing here but I presume the 5m maximum is deemed to be the maximum amount based on average daily volumes that is permitted without being perceived as materially impacting the SP.
I also wonder whether their cashflows influence whether it is 2.5m or 5m. It is a shedload of cash going out everyday and I assume their cashflows are not always smooth so they are likely to be cash rich/poor at different times. The more the merrier as far as I'm concerned as I consider 350p to be much closer to the true value. If the copper shortages that are predicted actually materialise (late 2019 into 2020/21), then I see 350p easily achievable and possibly more depending on the outcome of other factors (eg investigations etc). Time will tell.
I believe that Management do have some discretion about the amount of buy backs. The company announced $2bn at end of Feb to run to end of Dec. That equates to approx. $200m per month which is approx. $10m per working day. This equates to roughly 2.5m shares per day. The few days we saw 5m shares is an acceleration of the programme which mean it will end earlier than planned. I'm guessing that this was a deliberate ploy by the company given the fall in the SP. They are going to spend $2bn anyhow so why not hoover up extra when the SP appears to be artificially low. I really like the buy back programme and I suspect they will increase it further when the interims are announced. This is a great way to deliver value to shareholders (if one buys the idea that the SP is way below the 'true' value.) Whilst is looks odd that it is under water, that is rather irrelevant if all of the buy backs are below the true value. Sure, the company would have preferred to buy back in the 260s rather than the 330s but it is all with the same aim. Ultimately the enhanced earnings will prevail and this will return to the high 300s within a year or two. Of this I have no doubt. Good luck all.
DT, it is normal practice for plc's to hold them in Treasury. There is nothing sinister about it. They will not be used for anything so they are as good as cancelled. I can't answer the question 'so why don't they just cancel them then?' but this is nothing unusual.
Thanks Billy. Picked up a nice wad at 272.8p so very happy with the subsequent rise. Just hope we have seen the bottom. If the fat orange git could sort a few things out normal service could be resumed.
NKOTB,
I'm with you on 2 shares. GLEN & CNA are my 2 biggest holdings. I bought CNA as a contrarian move a few weeks ago and I think we saw the bottom last Friday. Once it cuts the dividend, it will slowly recover to 125p imho.
As for GLEN, I share everyone's frustration and I will have to hold rather than trade.
Tom
The company continues to spend £8-9m every day on share buy backs. Surely the Management would review this decision if they thought it was not good for shareholders. Therefore we have to assume that they believe that 304p is still way too low.
If they stopped buying I would be worried.
Guys,
I've done some very basic analysis of Q1 production verses their previous full year guidance. One might expect broadly 25% of the full year produced in Q1. Having said that, there will be many reasons why it could be different too so don't read too much into my numbers.
But non of the commodities reached 25%.
Copper was 20.8%, Cobalt 19.1%, zinc 21.9%, Nickel 19.6%, Ferrochrome 23.8%, Coal 22.9% and Oil 17.7%.