Member Info for TheTrotsky

Personally, I think VW and Mercedes should be made to pay additional punitive damages and penalties. They settled in the US years ago and are just trying to play the system here in the UK and delay paying out. They should be forced to fund a UK advertising campaign - "vorsprung durch schummeln" ;-)

Guitarsolo, Then you and the "market" will have to wait 12 months. To satisfy REIT requirements for FY22, FY23 dividends will be paid based on FY22 results (they pay in arrears).

What grounds do you have for considering EPS is going to fall in FY23 or beyond? They strengthend their long-term rental income in FY22, have a number of blue-chip tenants, have little or no current bad debts (virtually 100% rental collection), have additional rental capacity (without the need for significant additional investment) and have fully hedged their interest costs.

Sure, there are potential clouds on the horizon but it seems to me that the market is pricing in Armageddon now ;-) It would seem that all of these WFH pundits think they are the norm rather than the exception and have failed to take into account the impact on collaboration, wellbeing, training etc. that full-time WFH could have on the economy. There is a place for both office and WFH (there always has).

Also, at 31 December 2022, RGL had c£50m of cash of which c£38m was unrestricted plus c£5m of undrawn loan facilities. An additional £10m loan (say), together with the unrestricted cash and undrawn facilities, to repay the bonds would hardly break the bank or significantly impact on RGL's financing costs (if push came to shove)

This is a REIT! It's legally required to pay out 90%+ of its EPRA earnings, otherwise it will lose its beneficial corporartion tax status. Cutting the dividend by (say) a third would not create enough capital to repay the bond in any event and we are still 17 months out from having to repay the bond.

I see that Industrial REIT was taken out at a 40% premium today by Blackstone. It seems to me that talking down the market is paying dividends for Blackstone!

You say that the debt leverage is high for a REIT but that's in part du to its NAV has been pummeled over the last 12 months (NAV has fallen by c20% whilst LTV has increased by c16%). But one should not forget that RGL's interest charges are 100% hedged and covered 3x, and the weighted average debt duration 4.5 years (with the first break in 3 years, I believe).

Yes, there is a risk that if its NAV continues to fall (significantly) that it's loan covenants could come under pressure but the indicators are that interest rates should plateau and start to fall later this year and there is also a limit to how much the NAV could realistically fall (the cost of new builds aren't really falling) and it's highly unlikely that NAV would ever fall below cost for any prolonged period of time. WFH may be here to stay but I think the long-term demise of the office has been overdone - there are too many wider productivity benefits from working in the office to simply ignore.

Broomtree, You need to look at the small print. I was looking at this is recently and it's my undertsanding (please correct me if I'm wrong) that the if you die before reaching the age of 75 your spouse/children can take your SIPP tax-free provided the funds are withdrawn within 2 years after your death (any withdrawals made more than two years after your death are taxed at your spouse's/children's marginal rate of income tax). However, the downside of withdrawing the funds is that there is no longer an IHT exempt wrapper and the funds will therefore become part of your spouse's/children's estate(s) on their death (and therefore subject to IHT). It strikes me that, regardless of when you die, it might be better to keep the funds in the SIPP, pay tax on any withdrawals and maintain it's IHT exemption in perpetuity (there's no reason why the fund, or an interest in the fund, cannot be passed down the generations). That's my understanding based on current tax legislation.

Hey, we outperformed Admiral today ;-) If only one swallow would make a summer ;-)

Passer, What I'm saying is that, whilst your estate is above the IHT threshold, you'd be best advised not to take a lump sum out of your SIPP simply to put it into your ISA. Okay, you wouldn't pay tax on income from your ISA during the remainder of your lifetime but the additional funds in your ISA would be subject to 40% IHT on your death.

I'm suggesting that taking uncrystallised funds pension lump sums (UFPLS) as, and when, needed from your SIPP (to spend rather than accumulate) and paying an effective income tax rate of 15% (assuming you're a basic rate taxpayer and 25% of the income is tax free) may be a better option than taking a tax-free lump sum, placing the money into an ISA, drawing the income and paying 40% IHT on the lump sum (higher or lower depending on capital return) remaining at your death.

23.4p down at the close. Could have been worse but it does seem that investor sentiment isn't perhaps with PHNX as much as AV (AV effectively finished about 6.1p up on the day after allowing for the 20.7p dividend) or LGEN.

BoracicLint, I too have been keeping an eye on this one and, thanks to your post, am now of the view that perhaps it is best avoided. I perused the 2022 accounts this morning and came away distinctly unsettled. Looking at the balance sheet you'd be hard pressed to find any debt (until you realise that the accounts aren't consolidated). As best I can determine they have drawn £356m of their revolving credit facility (they currently have a £375m RCF) on which they are currently paying interest at 3.5% over SONIA (SONIA is currently 4.18%) plus £163m of vendor loan notes (VLN) on which they are paying 6% (the rate is due to rise to 7% on 1 July 2025, 8% on 1 July 2026 and then 9% on 1 July 2027 to maturity).

The problem as I see it is that they already have a lot of debt and now need to find a further c£200m (after adjustment for the £25m RCF drawdown made post period end) in FY23 to fund their capital expenditure pipeline. Where's that funding going to come from? Given the current LTV there doesn't seem to be any additional scope to materially increase their RCF and the shares are already trading at a discount to NAV, which would makes raising new capital highly dilutive for existing shareholders. In the RNS on 9 March, they referred to "seeking complementary sources of growth capital" without going into any more detail; which just create further uncertainty.

Cancelling the dividend would save c£50m per annum but would still leave a further £150m to find for FY23 (let alone FY24 and subsequent). It strikes me that it was shortsighted not to have tried to raise more in the June placing and/or increased the amount of VLN. There's great business potential here but they are seriously underfunded/overstretched. The business isn't currently generating sufficient cash to even cover the dividend let alone fund the investment required. On the face of it, they've bitten off more than they can chew and may be forced to curtail their proposed investment programme if they can't raise the additional funds they need. Perhaps Thor Johnsen and Andre Karihaloo left under a cloud.

Are you refering to the 2022 accounts?

If so, the accounts are on the DGI9 website: https://www.d9infrastructure.com/investors/

In short, yes they can and arguably that risk is already priced in but markets are fickle

SD235, Why take it out of your SIPP to put it into your ISA? ISAs are not exempt from IHT; so you'd effectively be transferring the funds from an IHT exempt wrapper into your estate at death. In principle you should only be withdrawing money from a personal pension (such as a SIPP) to cover living costs as, and when, you need it.

Ascoyne, as a point of note, if you pay tax on any of your dividend income you can "frank" any tax otherwise payable by the 30% withheld. However, this is not possible for dividends received in an ISA. You could point out Article 10.2 of the UK/USA Tax Treaty to iWeb which clearly states that only 15% should be withheld (unless the shares are held in a pension, in which case Article 10.3(b) applies and no tax should be withheld) or take the matter up with iWeb's ultimate owner (Lloyds Bank). It strikes me that iWeb customers could have grounds for a class action for a blatant disregard of the Tax Treaty and/or customer election. One has to wonder whether iWeb, or its nominee, is collecting and pocketing the tax itself.

Agreed Jim800

So, we may see a c26p fall. Not sure whether today's rise was based on investors buying for the dividend or just improving sentiment since th recent falls. Hopefully the latter. If so, improving sentiment may help to counter the normal ex-dividend fall. Tomorrow will tell

spikey, I'll lighten up when you stop posting daft comments ;-)

I think that Sosandar lies within Next's Label UK commission sales and this seems to have been a strong growth sector for FY23. Next is predicting that its commission increases are going to be more than offset by its own increased costs i.e. it will be absorbing some of the additional cost-of living costs.

SOS has been adding more strings to its bow over the last 12 months so I don't think that we'll see any fall in top line sales but, as I've said previously, the indications are that SOS will be spending more to acquire new customers and, as such, it's unlikely we'll see any signficant improvement in FY24 EBITDA (we should hopefully be at, or around, breakeven).

I wish people would stop harping on about a banking crisis. It's quite clear that we are capable of talking ourselves into a banking crisis but, aside from that, there is nothing to indicate that the specific issues at SVB and Credit Suisse are issues common to all banks or that there is a fundamental problem.

What's clear is that if people panic then all banks are at risk but that's nothing new or indicative of a general malaise. No banks hold sufficient liquidity if all of their customers withdraw their cash at once; this has always been the case. Banks have always been susceptible to unsubstantiated rumours and a run on a bank can precipitate a collapse, even if there is nothing fundamentally wrong. Clearly the collapse of SVB UK and the ease with which its depositors were able to remove their money electronically has raised a red flag and the BoE/PRA are looking into measures to prevent this in the future (it would seem that many of SVB UK's depositors were able to circumvent, possibly by using multiple debit card transactions, the normal £25k daily limit on bank transfers).

I'm not diminishing the problems at SVB or Credit Suisse but let's get a grip.

Lochinvar, Delaying your state pension should always be considered very carefully. Assuming your normal state pension age was 67 and you delayed taking your pension for 3 years then, ignoring the time value of money and taxes, you'd have to live until at least 83 before you were cumilatively better off. If you delayed 4 years, you'd have to live until at least 84. Also, don't forget that your SIPP is outside your estate for IHT purposes and can be passed on to your spouse and/or children.