Member Info for RickEngland

Mmmm? my calcs.

Regulator says 11% CET is adequate. So 16.2% - 11% = 5.2
5.2 / 0.2 = 26 (0.2 being 16.4 - 16.2 cet to pay div)
26 x 0.57p dividend = 14.82p a share.
X shares in issue = £10.5bn of spare cash, excluding a ton of provision they probably won't need.

The way I see it, is margins are higher if they're using their own money to generate more income.

Rick

Come on folks. Huge cet1 ratio, then add a ton of over prudent provisioning the babk is loaded with cash/capital it doesn't need. Add to that the growth this period, it's pretty decent. Every 0.2% of CET is worth 0.57p dividend.

Now the div income funds buy back in. This will take a week, for fund managers to seek the internal authorities. Then the demand for shares increases. Sure I wanted more div too, but will suck it up and wait "again".

Good to see the growth in the bank. Actually the results are pretty decent.

Rick

Interesting CET1 16.2% after div, 16.4% before div is paid. So every 0.2% of CET is worth 0.57p dividend. That is a huge pile of liquidity Lloyds are holding.

6 hours to go, to find out if Antonio's departing gift is 4p div a share (2.25p 2019 special and 1.75p 2020). Plus a £7bn share buyback programme, and quarterly div moving forward. Hope I won't be disappointed.

Theres still the issue of 15% of profits going towards funding this new scheme even if it is approved.

To me that means any div, from profits is out the window. They need a few years just to get to a div position anyway.

I see it as more risk with lowering potential reward.

Maybe I might dip in, if the price warrants it. 2 - 4p. Mmm nahh 2p. Dont get me wrong, I think Gary could do a good job if it wasn't for the legacy issues holding him back.

Point is investors need to appreciate that despite how much faith they have in management, the board is not in control anymore. Their destiny is in the lap of a court, a judge and the FCA.

Personally although Gary might have a good relationship with the FCA, I can't see them giving Amigo an advantage over other financial firms. There's no rush either for the FCA to help Amigo. They will want to cover thier own backs, and look at the issue industry wide. There will months of assessing, and reviews etc, has Amigo got that long? They need to restart business.

I work on an invest rule "is it getting better or worse?" Worse.
"Have I given them a chance?" Yes
"Do they keeping moving the goal posts" yes

Lending was supposed to recommence nov-20, didn't happen, looks like Feb-21 won't happen either.

I had 20k shares got rid around 9p when the threat of "material ongoing concern" was reported. Enough is enough.

Besides if people are that brave, nothing stopping them rebuying at 4p or less.

Glad I'm out, shame but hey ho.

Rick

It's not black and white situation. I'm sure it's cheaper in many instances to find a solution to get a "win-win" for both parties. I'm sure Amigo earned a decent wedge on loans they've agreed to settle. Legal battles could cost millions and waste millions. Fighting the regulator is writing your own death sentance. Even the big banks have had to take it on the chin for stopping divs, agreeing holidays etc.

I'd prefer the approach Amigo are heading, I'm behind the new CEO. We will bend, but we expect the regulator to help with over agressive claims firms as well. Find a solution that works. To be fair if Amigo follow the rules, they will have the regulator on their side, so that begs the question, what have they done historically to upset the regulator? I want the house cleaned and move forward with a clear set of rules and lending practices. Even if that measn Amigo take a hit, lets just hope the new provision covers everything.

Looks like massive progress has been made. Lets get the books totally cleaned and move forward and feel proud of the business model moving forward. It's not over for the firm, they have a ton of cash still, 2021 is a new start.

Congratulations on your topup. The firm must be worth much more 7p a share. I'm waiting for the results to digest the numbers before considering further investment.. My general investing strategy is:; "is the situation getting better or worse?" Based on the share price, I view this as "even", so I don't see the price increasing until end of Nov anyway.

I want to see the balance sheet, cash flow, and P&L first. Might even get a further dip on those results, especially as we know that new lending is not happening until 2021. However I still think Amigo will have decent cashflow heading into 2021. New Year, new start.

Rick

Franky: We're Going to have to wait for the results on 26th Nov 2020, to fully understand the financial position. I'm not bothered loans are not restarting until the New Year. I'd rather people took loans to payback Christmas overspend, than loans to pay for Christmas. Plus if you enter the new year with a job, you're generally safe.

I'm happy with the cash position, and the continually reducing debt facility. My questions are, what is the current equity per share (was 35p in Aug), lets say 25-30p now. What is the cash burn for operating the business, is this covered in income for current loans? What is the current holidays on loans, likely to all restart in the new year anyhow.

Pretty happy most of the 25k disputed loans are resolved, or at least boxed up for a fight or agreed to settle. However is there a raft of new disputes? I might topup my holding, although I'm preared to wait for the results now before I take action. The share price will go know where until the results are out. So I'm not worried I might miss out on a dip.

I still view the firm as a speculative play, although I'm not throw the kitchen sink at it. Shame not getting any divs from the big banks, as wouldn't mind throwing some free cash from those divs at it.

Not worried for the immediate future. I expect progess by March 2021, or might cut my losses and walk away.

Rick

Cash is still more than 4x the market cap currently around £33m. If this was a brand new business starting with £140m in cash today, I'm sure the market would be valuing it at more than £33m. I'll be interested to read cost of operating the business in the results on 26th Nov 2020, and if this is covered by earnings on existing loan payments. I've got 8000 shares and currently down on my investment. I take the view of treating this as a new business when they restart loans based on current share price and funds.

Hi Crooty.

Nope not shorting it. I'd be very surprised if shorts were allowed on the day of the dilution. Even if they were, i would assume the short would have to be diluted too. Otherwise it's unfair deal/trade.

Point is 2.9 billion new shares are hitting the market at 8am in the morning. That is one massive dilution. I wrote about this a week or so ago, that dilutions are painful and to be careful and plan for the day it actually hits. Go and read the RNS news.

Like I say something has to give tomorrow, how bad it is remaings to be seen, although I'd be very scared if I bought today.

All the best, I hope it works out. I don't get satisfaction for seeing investors in trouble, just telling it how it is.

Rick

depends how you view it newbie-k

If a growing firm issues new shares, and there's demand, any 'small' new dilution won't effect the price much.

Usually a share price is based on the market cap of a firm. If the market decides a firm is worth £2bn then the share price is worked out by dividing total shares in issue into that £2bn market cap.

What's happening with IAG is they've had their meal (new cash), tomorrow they pay the bill ( share dilution). Now some will argue the expected dilution has already been priced in, and the share price will say "stay static", and the market cap then grows from £2bn to £5bn. That's a very tall order to accept in my mind.

The dilution wasn't because the company is growing, its because it was worthless without the new cash, or going bust without new cash. Therfore it's only worth the cash it raised until it starts to prove it can survive.

So I suggest the current market cap is correct £2bn. So something has to give tomorrow. I think it will be a miracle when the new shares hit and we see a £5bn market cap.

2.9bn new shares diluting exiting price...mmmmmm.

We will see. Put it this way I'm not paying 94p, for a dilution like that tomorrow morning. For a firm burning millions a week. 30th Oct trading update will be interesting.

I'll stick with 45p for tomorrow.

Rick

I'll go for 45p tomorrow morning (7th Oct) IAG have had the cash and the market says the firm is worth £2bn.

So for the market cap to stay at £2bn, the shares have to half. Otherwise you get the same price, and the market adds to £2bn from thin air to equal £4bn market cap. Don't see that happening.

Probably be a lot if heavy selling too. Interesting day tomorrow for sure.

Good luck
Rick.

I must admit I bought into RR at 1.16, lost my bottle as it started dropping Monday morning and sold at a small loss 1.13 just before it went wild and climbed.

I switched my RR amount into 'more" Lloyds.

What I learned from that, is buy shares i'm are 100% confident with my investment. I can sleep at night with Lloyds, i'd be stressed owning RR.

I'm into Lloyds for 130,000 shares. Waiting for the divs.
Also hold Natwest. I'll stick with banks, huge capital, less risk, trading less than book value.

Possibly might dabble with IAG if it drops big time when new shares hit the market tomorrow. Although would be more comfortable after their end of Oct update.

I'm looking at 12%+ divs with Lloyds when it comes back which will be incredible return, based on interest rates rather than holding cash. Im patient, I see it really is a once in a lifetime opportunity. My own view not investment advice.

Rick.

In at 1.16 last week
Out at 1.13 this morning. Might have got 1.16 if it wasn't for my damn wi-fi

After a weekend of thinking. I don't trust I'll be allocated full rights. So £40 loss I can live with that. Too much risk playing with this firm.

I'm sure RR get 4bn income just for existing engine flying miles, when all planes are in the air. Let alone other sales, for other divisions. Must be near the bottom now at this market cap, unless more fear selling happening.

I think if want 32p, you're need shares to qualify.

The

Won't happen while RI is in play. After the RI then RR qualify for the additional gov loan. Im sure RR priced in enough cash to cover them a good year with other restructuring. Only if in a year, if cash issues persist will other options be on the table.

Just need more planes in the air. It will become increasing difficult for govs to lock the world down, as further months prove that we have more chance dying of the flu than covid.

Won't happen while RI is in play. After the RI then RR qualify for the additional gov loan. Im sure RR priced in enough cash to cover them a good year with other restructuring. Only if in a year, if clas issues permits will other options be on the table.

Just need more planes in the air. It will become increasing difficult for govs to lock the world down, as further months prove that we have more chance dying of the flu than covid.

the rights is not in jeopardy, unless the price falls below 32p. The RI is effectively an IPO, reselling the firm again for 2bn. So any new buyers will be taking their rights, because they're buying to specifically lock in 32p.

Besides the entire RI is fully underwritten, of PI dont buy, investment banks will.

Even if price goes to 80p, then 32p extra shares is still a great buy in price for an established firm, just stuck with some cash flow issues. Blimey the price was £6.81 on 2nd Jan 2020. Got to value here at these prices.

It's as funny as my £7k down on 125,000 lloyds shares. Happy to take a punt at these prices. Hold for 2022 and smile in the pub with divs paying the drinks all night. Sooner or later everything will turn good.

There's no other fun out there, while stuck in doors. Throw the train commuting costs at the market and watch the charts. Heehee.