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What happened to the buyback? Another big announcement followed by a tiny 1-day buyback then nothing? I don't mind if they don't do buybacks at all but I really don't understand what they're doing here.
It feels like they announce buybacks more often than they actually buy back shares.
In other companies within the Group.
Olderandwiser, this is about the difference between consolidated accounts and individual company accounts. Dividends are generally paid out of the top company in the Group, not the consolidated group, so that's the company that needs to have sufficient retained earnings to pay them. If you scroll down to the company balance sheet (page 105 on the pdf) the company has £17m of retained earnings. Generally the top company is just a holding company and doesn't trade externally.
No, it's just an accounting adjustment. Share capital and retained earnings are both reserve accounts that sit in the equity section of the balance sheet.
Share premium arises on the issue of shares, and retained earnings arises on profitability. You can only pay dividends from retained earnings, but you can transfer the balance from share premium to retained earnings, which is what they're doing. This allows them to keep paying dividends when retained earnings gets low. This process is always described as a capital reduction which can confuse some people.
Finally, the accounts are here. I can't immediately see any major issues?
I hope not. Who'd want more North Sea assets? The UK is a terrible jurisdiction.
1% revenue growth is pretty poor given inflation at 10%, and most of the profit growth came from interest on the huge cash balance they hold.
If management genuinely believe that LGEN is that undervalued then they should be buying back significant numbers of shares
More great results today. No comments in the last 6 months, probably a good sign!
Entitled "Trading statement" but only contains buyback info?
Yeah it's the duration mismatch between assets and liabilities that's causing problems for the banks. Shouldn't be an issue for LGEN unless there's something I'm missing, the liabilities are long duration and matching cashflows to liabilities should be literally the main focus of an annuity provider.
Having said that the accounts are complicated enough that it's difficult to say for sure.
They're not selling LDI to random people off the street. The pension fund managers who bought them are experienced qualified professionals who should know what they are doing.
Yeah I think someone at the WSJ likes trading oil options.
Tony, I like you and your posts are very informative, please keep posting.
There are a lot of people on these forums who post just to wind people up and get a reaction. Best not to let them get to you.
Usually it's bad results that cause these forums to become argumentative, not good ones!
Capital spend coming in below budget with production at or above expectations and no nasty surprises is about as good as could possibly be expected. The only real negative here is commodity pricing which is out of the board's control.
If these gas prices persist then in my opinion they should be cutting any gas-related capex and focusing on oil.
Back in December 2019, just before the pandemic, SDI bought Chell Instruments which was a major acquisition at the time and did a lot of business in the aerospace sector. Then the pandemic hit and aerospace disappeared.
Right now global air travel is getting close to where it was in 2019 and at some point aerospace spending is going to increase. I wonder if there's some extra benefit coming to SDI from that?
In my opinion the buybacks (both here and at BATS) have been a mistake. In a declining industry the focus should be on paying off debt in order to protect the dividend for as long as possible. The result has been a big increase in the cost of debt (as rates have gone up) which will impact future financing.
IMB could have the net debt down to 0 in less than a decade based on current cash flows, along with consistent increases in the dividend as interest costs reduce, and once the debt is gone all the excess cash could be paid out to shareholders.