Member Info for TheTrotsky

Given what appears to have gone on at DVRG under GB's tenure, I'm somewhat surprised that more MSYS shareholders aren't clamouring to kick him and any of his cronies off the BoD. If DVRG wasn't already up to its neck in problems and had the spare cash, I'm sure the DVRG would be pursuing GB both for fraud (to overstate sales by c100% is no mean feat) and to have him struck off as a director. I wouldn't trust a word that GB utters (or tweets).

Don't disagree with you hghotshot (or you Jim800) but, in my experience, the share price tends to react inversely to the amount of explanation you put into your accounts (the more explanation you need, the more wary investors become).

IFRS makes a complete botch of DEC's accounts and there is nothing that DEC can do about it. Most people just look at the income statement (old style P&L) and ignore the statement of comprehensive income (old style STRGL). In the past the STRGL was, for the most part, ignored because it included a lot of non-cash adjustments which (arguably) often tended to be of little relevance. The trouble is that under IFRS a lot of the non-cash debits (expenses) that would have once appeared in the STRGL have now morphed to the income statement whilst the corresponding (and arguably mitigating) non-cash credits have been left in the statement of comprehensive income. IFRS's aim seems to be to make the income statement reflect the worst possible case scenario whilst excluding any potential mitigating factors i.e. the presumption being that if, for any reason, things start heading south a company will take no action to avoid or mitigate that event (which is clearly ludicrous).

LTI, The FSCS limit is an irrelevance and I certainly wasn't suggesting that there would be a run on LLOY. Nevertheless, it would appear that the BofE is, at least, considering raising the cash ratios all UK banks will be required to hold (to reduce the potential risk of a bank-wide run on deposits) which, in turn, would reduce the amount banks have available able to lend and increase the amount of cash that they would (probably) be required to hold on deposit with the BofE. Such a move would (no doubt) reduce LLOY's net interest margin and reduce its surplus capital. QED it would have an impact on LLOY's ability to pay out the level of dividends that might otherwise have been expected based on current interest rate outlook and the expectation that LLOY's PPI payouts and similar litigation costs/fines are likely to be significantly reduced, if not totally irradicated, going forward.

PS. I would accept that the current FSCS limit is probably sufficient for most customers but, like every other walk of life, there will probably be a relatively small percentage of customers who have cash holdings significantly in excess of the FSCS limit (even if they have spread their cash around multiple banks) and, if anything, these are probably the customers who should be of most concern because they are likely to be financially sophisticated (or at least well advised) and capable of causing a run on a bank even if only a few hundred of them suddenly choose to remove all of their cash at once. As we saw with SVB, many of the withdrawals were triggered by advisors telling their clients that they should withdraw their cash and run for the hills.

PPS. IHMO the BofE is barking up the wrong tree. Commercially, in all likelihood, banks could never hold enough cash to be absolutely certain of preventing a run and continue to operate profitably. The BofE would be far better off looking at how they can restrict individuals and businesses from withdrawing abnormal, unlimited sums of cash (there doesn't appear to be any daily CHAPS limit). Perhaps if the BofE made it a requirement for all abnormally large withdrawals or closures to be processed at 24 hours notice, that would at least give banks the opportunity to spot a potential problem, contact the BofE and enable the BofE to take emergency action if required. Just a thought.

Trek, Averaging down does rather hide some unfortunate truths; namely that some of your shares bought at higher prices aren't generating the same return on investment as shares bought at the lower price. I could have averaged down but DEC already accounts for c23% of my annual SIPP dividend income; so, primarily as a dividend investor, I'm currently looking to invest elsewhere to spread the dividend risk (I'm not looking to reduce my holding in DEC but I'm not looking to increase it either).

I'm confident that DEC can steer the vagaries of the gas price but I think the wider market is less sure. Also, at a time when many of its peers have been making bumper profits because they were unhedged, DEC's losses look out of kilter. I'm sure many people don't understand IFRS accounts, see a loss and just assume that DEC must be a basket case. To suggest that IFRS makes accounts easier to understand (that was the intention) is a joke in bad taste IMHO.

LTI,

"Most people on here live in the UK and would be interested in facts relevant to the UK and not 'ifs' and not what the EU does."

What, so they can ***** and moan after the event? Unfortunately, unlike you clearly, the majority of us don't have a crystal ball that tells us what the future will be. So, we are left, based on passed events, to try to predict what the impact will be if the EU should respond to US subsidies and what impact that might have on the UK. Waiting to see if something happens and then responding is a sure fire way to always being behind the curve and second best. If you'd actually read I wasn't suggesting that we should get into a subsidy "war" that we'd unlikely win but rather taking a different path which should provide a positive outcome regardless of what transpires.

"I get fed up with 'ifs' 'suggestions' and 'forecasts'"

I was just reporting the key takeaway from Bailey's speech (rather than the prosaic "they might lift FSCS limit" which would probably have little or no effect on LLOY). This is a discussion forum if you hadn't noticed and I think it's totally reasonable to discuss the potential implications of the BofE carrying through with such a proposal and the impact that might have on earnings and dividends. It's just a valid point of discussion as the impact rising/falling interest rates might have. I didn't say that it would stop LLOY paying dividends; I was suggesting that it might prevent LLOY from increasing future dividends as much as it might otherwise have.

You really need to get a pair of glasses and come down from your ivory tower. This is not the LTI discussion board and/or give you the right to **** off every post that doesn't concur with your narrow, world view.

fleccy, I only responded to the constant Brexiteer lament that it's always somebody else's fault ("Brexit revenge"). I'd agree that, in general, Joe Public tends not to care about what happens in the City or at ports/airports but that's because they are simply poorly informed and fail to understand the ripple effect on the wider economy. Perhaps you are right to say that the UK has been moving in the wrong direction for decades; the Brexit vote clearly evidences that ;-)

LTI, EU subsidies continue to be very relevant to the UK, especially if those subsidies mean that inward investment goes into the EU rather than the UK, and it would be myopic to suggest otherwise. The EU is right on our doorstep and we are going to be left stuck between US and EU competition for jobs, investment etc. The UK can try to compete with the EU/US financially but the fact is that, with a population of c67m and a declining GDP per capita, the UK is a small market compared to both the EU (c477m) and the US (c332m). Personally, I think that trying to compete on subsidies would be fruitless; so we will need to come up with another solution (it would IMHO probably be better to channel those potential subsidies into new infrastucture initiatives, such as power transmission; at least infrastucture can't get up and leave when the subsidies stop).

As an aside and more pertinent to LLOY (and other banks) I'm surprised that everybody appears to have ignored the main takeaway from Bailey's latest speech i.e. the suggestion that UK banks may be required to hold an even higher cash deposit ratio to protect against potential future runs on deposits. That could (significantly) reduce the UK banks' future net interest margins and also reduce their ability to fund future dividend increases.

The dividend is currently costing them c$170m per annum. Other than drastically cutting the dividend, or cancelling the dividend altogether, a reduction in the dividend is not going to generate a meaningful amount of cash to fund (say) new acquisitions. DEC is, and always has been, a dividend, rather than a capital play, so I think it highly unlikely that the BoD would consider cutting the dividend unless it was business imperative to do so.

Personally, I think the current gas price is very relevant to the share price. DEC may be more or less fully hedged for the next 12 months (at last year's higher gas prices) but beyond that their level of hedging tends to fall away progressively. So, unless DEC took advantage of the high gas prices last year to hedge a lot more future production than normal, it's quite likely that its income 12 months+ hence will be materially lower than the current year.

The question you've then got to ask yourself is what the expectations are for market rates in 12 months+ and is DEC now locking itself in to hedges for next year and beyond at prices that might prove to be significantly below the market rate (or, indeed, vice versa). DEC does not like to gamble on future market rates and, as I understand, has always tended to hedge significantly more of its future production than some of its competitors. This conservative approach has always benefitted, and continues to benefit, shareholders but has always been frowned upon by many in the wider market (they tend to prefer rollercoaster rides to Steady Eddies).

For me the one area of concern (beyond the normal perceived DEC issues) is whether future US gas production is going to outstrip demand. The US tends to be its own micro market supplying most, if not all, of its own demand and exporting the surplus. However, the US still lacks the LNG infrastructre to significantly increase exports beyond its land borders (Canada and Mexico) and therefore tap into the higher European gas prices. As a result, the US market rate tends to languish below the wider market rate and there would appear to be limited scope to export any forecast production increases to obtain the best price possible (which will no doubt serve to only depress the US market rate still further; supply and demand would dictate that prices fall to force producers to either reduce production or stop production altogether).

Given the step change in rates that occurred in the latter half of FY23, I don't think it unreasonable to expect that we should see some "lag" benefit in the first half of FY24 (assuming rates stay at or above current levels) and, on the presumption that they do, indeed, distribute all of their net income (as they state), that would suggest (by my calculations) that they might be able to pay out c11p+ for FY24 if there is no significant reduction in rates over the next 12 months. Perhaps, as you suggest, that might imply that they don't include the leverage element in the headline purchase yield.

By my (rough) calculations, if there is no change in rates in H1 FY24 then net income in H1 FY24 could be expected to be up to c30% higher compared to H1 FY23 (on a LFL basis) and we could see a further increase in the interim dividends from Q2 onwards to (say) 2.25p. Interesting times

Badgernator, Here's some simple economics for you to try and wrap your head around. The additional delays, staffing costs and paperwork at EU borders means that it costs more to sell goods into the EU; costs that can't necessarily be passed onto customers (especially if there are EU competitors who aren't facing any additional costs). At best less profits. At worst lost contracts. That's even before we get to the question of tariffs and taxes. Sure lower exchange rates help but since we import most raw materials, that's a two-edged sword and impacts services and manufacturing alike.

But, even ignoring all that, businesses do not tend to thrive during uncertainty, disruption and chaos. They are made to run harder to just stand still and that invaiably means that new opportunities go abegging.

So, no, Brexit has not been a success and if you'd bothered to listen to Brexit's most ardent political supporters you'd realise that even they accept that Brexit has had a negative impact on the UK to date (they might not have said it before the vote but they'd always understood that that would be the case). Whether Brexit can be a success in the future remains to be seen but stop trying to pretend Brexit has been an economic success to date. At best you can say it could have been worse.

Also, it may prove to be a misconception to think that the worst is now behind us. It's difficult to separate the wheat from the chaff. Clearly Covid and the war in Ukraine have had an impact since Brexit, both on us and the EU, and it remains to be seen whether some actions have been delayed as a result e.g. Brexit has already had some impact on jobs in the City and there could be further outflows if the EU proceeds to "onshore" the Eurobond market and certain other clearing operations. What seems to be clear from recent events (the lack of new IPOs and the trickle of companies moving their listings to other stockmarkets) is that the City isn't (perhaps) the financial powerhouse it once was (and Brexit may have played a part in that). It may all prove to be a temporary aberration but I wouldn't be crowing about the "success" of Brexit; earthquakes and tsunamis are rarely (if ever) positive events albeit the rebuilding may create economic opportunities.

Sorry, but what a lot of utter poppy****. Brexit didn't work out as you expected so it must be Brexit revenge?! When are you lot going to face reality? Brexit was always going to be a rocky road. Even the "mighty" JRM now says (conveniently after the event) it's going to take 50 years to show a "dividend" (a long enough time frame for him to be dead and buried). You've also got to love how prominent Brexiteers like Peter Lilley, Jim Ratcliffe and James Dyson all promptly upped sticks and left the UK after the vote they'd promoted! Clearly what was good for the goose wasn't good for the gander!

Just accept that Brexit was always going to be a financial disaster in the short/medium term (it's simple economics); the reality is that the EU could have made it a lot worse (and may still do). The jury is still out whether Brexit can be a financial success in the long term. The indicators aren't good IMHO. We're already being squeezed by the US on the one hand and the EU on the other in the green subsidies "war" and lack the means to compete with either of them (even if we could compete financially, we can't offer the same market opportunities) and are at risk of being bypassed (companies are already upping sticks and moving to take advantage of the subsidies on offer). They are large economic power blocs whilst we have no clear strategy beyond some sepia-tinted, Victorian idea of "free market" economics - the problem being that people have spent too much time concentrating on what we used to say rather than on what we actually did (we preached "free market" but created "captive markets" instead).

As for the idea that investors will leave the UK stockmarket in the long term, that rather defies logic. Investors have always followed value (eventually). This has clearly been a bad year for the UK stockmarket and given that many of our large listed companies are not UK-centric, there affiliations are loose . We therefore need to try and address their concerns if we can.

Personally I'm not convinced by the argument that US investors better appreciate value (and afford higher valuations accordingly); the NASDAQ, in particular, has been decimated in the last 12 months. The counter argument could be made that too much money chasing too few opportunities has resulted in US assets becoming overpriced and that there are better investment opportunities to be found elsewehere e.g. UK.

That said, we can't fix the fact that, following Brexit, the UK is no longer a potential entry point to the EU and some fallout from that is/was inevitable; being a ship anchored offshore is not the same as one anchored in harbour. The idea that the EU will be compelled to give us the same free, uninhibited access to its markets as before without us having to comply with its rules, or pay for the pleasure, is, and always was, a pipe dream. Members clubs don't give free, unlimited access to non-members; it defeats the whole purpose!

It says:

"The Company notifies Shareholders that 14 April 2023, being the ex-entitlement date for the Second Return of Capital, is the last date by which Shareholders are required to hold Ordinary Shares in the Company in order to participate in the Second Return of Capital."

Surely, if yesterday was the record date it would say so? Although they use the term "ex-entitlement date" it seems to imply that 14 April (today) is the record date, not yesterday.

Have to say that last night's RNS isn't very clear. It suggests to me that if you hold the shares at the close of business tonight you will be eligible for the 55p but today's sell-off suggests otherwise!

Novice, Somethings not right. Astericos aren't actually obliged to notify the market of all their additions/disposals but they are obliged to notify the market if their holding crosses a 1% threshold either way (namely 25% or 26% in their instance).

Prior to the acquistion of Appreciate, Astericos had a declared holding of more than 25% and, following the issue of the consideration shares, would still have had a holding greater than 25% of the enlarged share capital. So, in principle, if Astericos have reduced their holding they would have been obliged to notify the market (because 17.75m shares is indeed 24.46% of the enlarged share capital).

The disparity may be due to Astericos's original disclosed holding including an indirect interest or those of a related party but there is nothing in the TR1s to suggest that.

Therefore, if the Bloomberg figures are correct and Astericos have indeed sold down c700k then the only way I can think that they could have managed it without notifying the market is to have sold off enough shares to leave them with just above 25% before the new shares were issued, allowed the issue of the new shares to (automatically) take their holding below 25% and then sold off the remainder subsequently. I don't know whether that is legal (or against the spirit of the legislation) or whether they would have been obliged to notify in any event (even if it was simply the case that the issue of the new shares took thier holding below 25%).

So speaks someone who doesn't have a clue what went on at Carillion

Monks, Something isn't adding up. The more I look at it, the more surprised I am at the level of dividend for FY23 compared to FY22. TFIF supposedly distributes all of its surplus income after costs. As far as I'm aware, but stand to be corrected if I'm wrong, income for this purposes does not include any realised profits/(losses) from gilt sales. The FY22 dividend looks low compared to the FY22 purchase yield given that there was little or no interest rate volatility during FY22. Likewise the FY23 dividend looks high compared to the FY23 purchase yield given that there was a lot of interest rate rate volatility and that most of that volatility occurred in the latter half of FY 22 (there would have a lag effect on income). Did the mini-budget fiasco allow them to make some additional, one-off, non-recurring income?

For anybody interested, my starting point was to calculate the average NAV ex-dividend for FY22 which I estimated to be c110.55p (based on the average of the NAVs announced at 31/03/21 and 31/03/22 respectively after adjusting for the final dividends). I could have used the share price instead but wanted to eliminate any discount/premium. I then took the FY22 dividend of 6.77p and divided it by 110.55p to give an effective annual return of c6.12% (which I rounded down to 6%). A bit rough and ready but not likely to be a million miles off the mark.

Just done some back of the B&H packet calculations. I estimate that at the start of FY23, TFIF was earning a net monthly return of c0.5% (c6% per annum) and that by the end of FY23 its net monthly return had increased to c0.79% (c9.5% per annum). Also, based on some rudimentary estimates, I reckon that TFIF's effective net return for FY23 was c7.65% i.e. if there was no change in the base rate for the next 12 months then TFIF might be expected to pay out c11.75p in dividends for FY24 (9.46p x 9.5%/7.65%)! Being a bit more conservative and assuming that the base rate more or less plateaus for the next 6 months and then starts to (gently) decline by (say) 0.5% over the next 6 months, then I reckon TFIF could be expected to make a net effective return of c9.3% for FY24 and pay out c11.5p. At the moment I'm pencilling in a (conservative) return of at least 10p into my dividend forecasts; the base rate would have to drop quite dramatically from here to expect less and all the current indications are that the base rate won't be tumbling any time soon.

It's certainly has been possible to make a turn spread betting (trading in the range, say, 1.40p to 1.95p) but it does appear to be at, more or less, the bottom of its current range (since the start of the year) and it's hard to see anybody shorting this in the hope it might tick down another 0.05p (without specific business information). I therefore doubt anybody is selling at a profit at this level unless they acquired their shares at sub-1p at some long distant time in the past before it acquired MW

Monk, Aren't you overlooking the fact that they have issued the shares to invest the proceeds and generate more income; it doesn't therefore necessarily follow that the EPS will be reduced. The fact that they are issuing shares suggests that they can see opportunities to invest and generate income in excess of their current weighted average return

Cashola, I can see good reasons why a cash limit might be in force. Firstly, it reduces the amount of cash that shopkeepers may need to bank (this is becoming increasingly difficult, not to say costly, as bank and Post Office branches closures mean that shopkeepers are having to travel further to bank cash). Secondly, it means that less cash may be held on the premises (one of the other upshots of bank and Post Office branch closures is that shopkeepers are tending to bank their cash less frequently). Thirdly, it reduces the potential payment cycle (the time between receipt of the money and the payment for services rendered). Fourthly, it becomes a question of risk (and insurance); if a shopkeeper accepts cash payment and is then robbed, who is on the hook for the payment of the bill? Not the customer (they've paid and their account has been credited); the liability would fall on Paypoint in the first instance and the shopkeeper ultimately (who'd have to reimburse Paypoint from their insurance claim - assuming they can get insurance for cash losses). Fifthly, if it was needed, banks and Post Offices are now charging more for cash handling because of the declining volumes. They are benefiting from the very problem they have helped to create!

Bottom line, the cash limit may not be all of Paypoint's making, especially if the shopkeeper has to indemnify Paypoint for any losses (regardless of whether or not they have insurance cover). You can moan all you like but everybody is having to move away from cash transactions (whether they like it or not) because of the bank and Post Office closures (it's becoming self-fulfilling). Shopkeepers will undoubtedly have some cash float on the premises but it's becoming an increasing risk and it's therefore inevitable that they too will want to reduce the amount of cash transactions and/or want to make it, as near as possible, a zero sum game on any given day i.e. the amount of cash purchases more or less equals the amount of cashback.

PS. Customers can always pay their bills by debit card. It's the new cash didn't you know ;-)