Member Info for TakingMyTime

I don't think Donald has much impact on no-deal, he's been for it all along, so anyone who was going to be influenced by him probably already has been.

I think you make a good case that whoever is buying isn't doing so just for the dividend. In that case, they may not sell afterwards (though of course others might).

With Wilmar.

https://www.abf.co.uk/media/news/2019/abf-announces-joint-venture-with-wilmar-international

Seems like a good move in principle but I don't know enough about the Wilmar situation to know whether the price agreed is good for ABF or not. I don't see any particular risks on the China/US trade war situation that would be negative for this.

Well, it's going ex-div pretty soon, right? I forget the exact date. But there have to be people wanting to snaffle the dividend at this price. Someone or several someones have obviously decided if they can get it around 2000p they'll take it, and grab the dividend. The more interesting question is whether they'll sell after it goes ex-dividend. If so, we might see a bigger drop than normal after the dividend and (IMO) a buying opportunity. I hadn't planned on going in deeper on PSN but if the price drops low enough you almost can't pass up the chance.

"on PSN, would this Special dividend that is paid out not be better deployed in them buying back shares?"

I think the answer to this question depends on your particular situation. If you are looking for income, the dividend is advantageous. If you are looking for long-term growth in your investment, the buy-back is better.

The impact on the company is largely the same. Either distributes funds to shareholders rather than reinvesting them into the company. The only difference for the company is that if you reduce the number of shares significantly, you potentially also reduce the number of investors. At some point that could be a negative but is unlikely to be an issue for PSN at this point in time.

There's also tax considerations. A special dividend is tax advantageous for those whose dividends are less than £2K a year, because the tax on your first £2K of dividends is 0%. A share buyback is tax advantageous for those whose capital gains, when they eventually sell the shares, will be less than the CGT threshold, since share buyback in theory at least increases the share price and thus the cap gains. Neither applies if it is held in an ISA, of course.

There's also political considerations. A special dividend allows investors to receive return on investment before the political scene changes in such a way as to result in confiscation or much higher taxation of investment proceeds. Both are possible in the current political environment. It's even possible that a Corbyn government could tax investments that are already in an ISA wrapper because 'people who hold ISAs are rich,' etc. There's something to be said for getting the money now while we can before bad things happen.

For me, I'd rather get the special dividend.

"Hi TMT
Filters in Tabs above - easy. Not worth wasting your time with those two.
BoL"
Thanks, done. :)

'you are saying if the banking system was not rescued by austerity and the theft of funds from more rational projects like green energy then property prices and site values would have recovered by themselves. You are saying the banking system was not in meltdown? '
I didn't say any such thing. I asked you to clarify/define what you mean by 'bailout'. Instead, you are all over the place talking about Rupert and crown estates and green energy.

Yes, I don't post very often. Sorry, my world doesn't revolve around talking to you on an Internet forum. But I did try to have a conversation.

So now, I'll say that if everyone who receives money directly or indirectly from government incentives / bailouts has been bailed out, and should pay it back with interest, we've got a huge problem in the UK.

Everyone who ever received benefits (of any kind, including child benefits) has a huge tax bill coming. Everyone who ever sold food or anything else to anyone on benefits has to pay up, they've been bailed out as certainly as a builder who sells a house on Help to Buy has been. The BBC will be shut down because they've been selling licenses to people on benefits and thus been bailed out. Time to pay up. Everybody who had funds with Northern Rock was bailed out. Time to pay.

You, sir, have to pay. You're using the Internet which has been subsidised. I'd hate to say what your tax bill should be if you've used roads (subsidised), any kind of public transport (subsidised), bank accounts (bailed out), or the NHS (fully subsidised).

Nothing you've paid in taxes counts (after all, those PSN executives paid 45% income tax, PSN paid 13.8% National insurance, and then they paid 20% VAT on anything they spent of that income). None of that matters, it's all just bailout that should be paid back punitively. You don't care if PSN spent any money to make their profit or put any effort into it, the only thing that matters is they were indirectly bailed out and should pay, but you won't apply that to yourself.

Government incentives, government stimulus, whether direct or indirect, should be paid back by the people you don't like. Your own, you won't pay back or offer to. Nice to know there's an ignore option here.

@Nige
'Hi TMT
Imagine you're having a discussion with Exstatex - the rest of us have filtered him.'
Thanks, didn't know that was an option on this forum. I'll try a little longer. Sometimes there can be some common ground.

@billy
'Roll on Corbyn's government.'
Thanks for sparing me the bother of reading anything else you say. You might or might not be sincere but just take a few minutes, if you dare, to read up what Corbyn's hero Chavez did to Venezuela's economy but also to freedom. Amazingly, the anti-Semitism and terrorist-apologetics probably isn't even the worst aspect of Corbynism.

exstatex: just so I can understand you, because you put out a lot of stuff, you agree that PSN received no direct government funds, but would say that anyone who benefited by government funding and/or stimulus activity has been bailed out, whether they received direct government funding or not. Is that accurate? If so, you are using a different definition of 'bailout' than what I'd use, but at least we can communicate intelligently if we can understand each other's definitions.

Further to that, if I understand correctly, you'd say that Persimmon should pay 50% of the increase of its share price since 2008-9, plus 4% interest, to reflect the 'bailout' (to use your term). Correct?

'who do you think you are?'

An investor who owns PSN shares and would be willing to sell them if there were a coherent reason why it is unethical to own them today. Who do you think you are?

PSN's share price at the beginning of 2008, since you asked, was 783p. At the beginning of 2013 it was 820p. I guess that was a bailout, even though they were never paid any money in that time period by the government.

There is a housing shortage. An intelligent government would bring in policies to stem family breakup, which is the primary cause of the housing shortage. They didn't, but they did something else -- encourage home ownership with a range of policies. Persimmon positioned themselves well to take advantage of that so they could make a lot of homes to sell to these people who were buying. But it isn't a bailout of the builders, it's a subsidy of the buyers.

Persimmon needed no bailout, they were a profitable company at that point in time. They were able to make more homes (which cost them money) and sell more homes (on which they made a profit) because of the subsidy but it wasn't a subsidy of them. They were just smart enough to position themselves to benefit from it.

So today the share price is 2095p. Not because of any alleged 'bailout' but because they recognised the government was creating a market situation and took advantage of it.

So, still no facts. No links, no evidence that there was ever any bailout of PSN. I don't think there was, but prove me wrong and I'll take you seriously. You didn't even try. You didn't even try to quantify what PSN should pay back by taking into consideration taxes paid out of your bailout that never was.

Instead, all you have is ad hominem attacks calling people masons and royalists, accusing them of disguising things, accusing them of just wanting to run off with the money because they don't share your 'creative alternative reality.' I don't think the rules of this site were intended to permit you to make those accusations.

@Abkaz. The logic is obvious. There's some risk, obviously, but as Will Rogers said, 'Buy land. They ain't making any more of the stuff.' He's taking a risk but he might make a lot more on his investments than I will. If I were younger I might do the same.

Ok, mate, give me some facts. You want me to divest from a very profitable, high-dividend paying investment, which will hurt my retirement, my wife, my kids. I'm not interested in your interpretations, I want cold hard facts, with evidence.

Give me the specifics of PSN's bailout. How much? When? When did it start, when did it end?

You said there's been no payback. Please quantify that. I want facts. How much Corporation Tax has PSN paid since the bailout? How much tax have their executives paid, or are due to pay, on their bonuses? Does PSN pay any tax (National Insurance or anything else) on those bonuses? You can't claim that all that money was from a bailout and then claim that there's been no payback if tax has been paid on it. If all the money was from a bailout then any tax paid is a payback.

How much of PSN's reserves and land bank comes from a government bailout? Evidence, please. How much tax have they paid on the profits that built up those reserves, or on the funds used to buy that land? Facts, please.

How much bailout money has gone to pay salaries of PSN employees or contractors? How much of that money has gone back to HMRC? If any bailout money has gone back to HMRC in taxes (including National Insurance) then there's been a partial payback.

I want links with cold, hard evidence, not opinions, or convoluted arguments. I'm not interested in your opinions. I'm not going to have a poorer retirement because you have opinions. If you'll do the work of gathering hard evidence I'll pay attention. Until then, you're on ignore.

Nige, I like the numbers as well as you do. I've got 20% of my ISA in PSN, nothing else in builders. Just don't have the nerve to go higher than that.

Would probably put some of it in TW but I bought a house from them once and when I tried to put up shelves the walls weren't straight. My better half would kill me if I invested in a builder that doesn't know how to use a spirit level. I'm not sure shoddiness from almost 30 years ago is really the best way to inform investing but marital bliss is better than a few extra quid.

My view on Brexit is either it will happen and not be as bad as expected, or it won't happen. Either way I think the builders will be fine and the Brexit scare is creating a buying opportunity. The only thing that would make this a bad bet, IMO, is a Corbyn government, and I'm not sure where you can safely hide your money in the case of a Corbyn government. Cash, maybe, but he'll inflate that away or confiscate it if he can get away with it. There's no investment safe in that scenario.

Thanks

No doubt wisdom shall die with you.

'As a scientist I am fed up with people ignoring the FACTS! All scientists trust this data, it is correct.'

If you were a scientist you wouldn't claim that all scientists trust this data, because you would know that there are those who don't. If you were a scientist you'd admit that there are major assumptions required to assert 780K years of data, and you wouldn't be trumpeting it as fact without acknowledging the uncertainties and assumptions.

@exstatex
Not attempting to disguise anything. If you are willing to consider that there could be more than one legitimate perspective on these things, I'd be willing to take some time to elaborate. But I'm not particularly interested in an argument, and if you are just going to assume that people who view things differently from you are dishonestly trying to disguise things or are guilty of some other moral failure, then there's no point in discussing it with you.

Thanks, Nige. Interesting. I wouldn't say 2700 is my limit but that's when I will start to look more closely.

Sounds like you're more heavily exposed to the housebuilding sector than I want to be. I'm happy to be involved but it's not where I want a lot of funds.

Been thinking about this one for a while. Less than a month ago we were at 669. Now we're at 584, which is become appealing. Anyone know why it's dropped, though?

Last year's dividend was 78p, right? That's over 13% at today's price....

From the annual statement, 'We will continue to review the level of surplus capital generated by the Group in the context of market conditions and the performance of the business.'

In short, it depends. If we have a Corbyn government there will be taxes and regulations and nationalisations and uncertainty and there will be no special dividend in 2021. If Theresa May finally goes to that ex-PM homeland in the sky (also known as the House of Lords) and is replaced by another Tory who actually believes in property ownership and that profit isn't immoral, then Brokenshire will find a comfortable home on the back benches and there will probably be a special dividend.

There's a lot of fear that housebuilders will be hurt badly if there is a no-deal Brexit. I don't believe that. As RetiredBanker said below, there's going to be a need for houses to be built, and I think the impact of no-deal will be much more temporary than we're being told. But I think PSN has reserves for that contingency, and if it doesn't materialise, either because there is a deal or because it turns out not to be damaging, those reserves will probably make their way to shareholders as a special dividend in 2021.

So, I'm optimistic. The most likely reasons it wouldn't happen are due to a Corbyn government or due to no-deal Brexit being worse than I think it would be. You'll have your own assessment of those risks, of course, as to the likelihood of those things happening and how bad they will be. Of course I might be missing something but I think those are the big risks.

The market is pricing in the risk of Brokenshire pulling the plug on Persimmon's involvement in Help To Buy, and I seriously doubt he'll be the one making that decision. So I'm not concerned about that one very much at all.