Member Info for TinkerT

Hi Dicklaw,
I know the board’s policy looks fixed but when Looney cut the divi to 5.25c THAT was supposed to be fixed till 2025. Within a few months that policy was changed and the current 4% increase was introduced. What I and others are hoping is that the board will adhere to its policy of NOT adhering to its policy!!
We live in a changing world and sticking to a figure that was appropriate in the hyped-up panic months of Spring 2020 makes no sense.
Tinker

Terraplane,
You are absolutely right in pointing out that Bernard Looney is our employee. I think Mr Looney needs to remember that we, the OWNERS of the company, voted against his predecessor’s pay deal back in 2016 had his pay cut by nearly half.
Tinker

Grimmo,

Like you, I don’t understand the dividend policy. “Resilient” and “sustainable” just seem to be euphemisms for “low”. Is there any reason why the dividend cannot fluctuate year to year? If we make a load of cash one year why not pay out double what is paid in a lean year? The price of crude cannot be predicted so, realistically, neither can our cash flow.

The board must ensure that sufficient cash is retained to satisfy investment needs and, if prudence dictates, to pay down debt. The rest is available to return to shareholders either as buybacks or divi.The idea of pegging dividend at the completely arbitrary level of one half of what it was in Good Bob Dudley’s Golden Days (increased by a tiny 4% pa) seems absurd. What is so special about that 50%? Is it written in tablets of stone? Is it the law of the Medes and the Persians?

Tinker

Mark, I think the confusion arose because the ADR xD is day earlier than the London shares because of an American holiday on Thursday.
Tinker

Mark,
Just to avoid confusion, xD date is Thursday 11th. HL and others have wrong information on their site. As you know, to qualify for divi, you have to own the shares at close of tomorrow and opening on Thursday.
Tinker

Neil74 says we need a divi increase. Funnily enough (or really not funny at all) the $1.25 billion being invested/thrown-away on buybacks this quarter equates to a dividend of over 6 cents per share so if we had no buybacks we would be back to 10.5 cents a quarter. I suspect that such a reward might well have edged the SP up to pre-flu levels.

I think I, too, might have quite liked my income to double and my capital to increase by about 30% but then I’m a bit old school and out-of-touch.

Tinker

Can anyone enlighten me? Are these occasional encouraging bursts such as this morning’s steep rise from 345 to 350 just the effect of the buybacks? If so, the effect is pretty short-lived.
Tinker

Won’t it be great when the liberal/woke/eco/snowflake/diversity/leftie/hypocrites at last get round to acclaiming the greatest environmentalist of the Twentieth Century? I mean, of course, Margaret Thatcher. She it was who, decades before everybody else, saw the necessity of moving away from coal. She valiantly combatted the forces of reaction headed by the self-interested fat cats of the NUM and the TUC. A woman of real foresight.
Tinker

Maybe it’s worth noting that the HL site wrongly says the XD date is the tenth rather than the correct date, the eleventh. The tenth is actually the adr xd. This puts HL’s rubbish analysis in context. If they cannot report verifiable facts accurately then what value is their opinion?
Tinker

Thanks for that Mark. The one reservation I have about the Q&A is that the friendly nature of the event might be inhibiting the analysts from asking difficult questions for fear of sounding hostile. But even with that reservation it is a million times more informative than HL’s glib note.
Tinker

I am glad to see a positive view from RBC. On the other hand, I have to admit that some of the negative stuff in HL’s note has a ring of truth about it. Selling assets, paying down debt and share buybacks all make for a smaller company. I’m not qualified to judge whether smaller in this case might be more or less profitable. Any views?
Tinker

Sorry. That should have read “nearly 3% down”.
T

We’ve dropped nearly 4% on the day of better than predicted results. Why?

Is it that people were expecting a divi increase? Realistically that wasn’t a possibility.

Are people selling because they anticipate a dip copying RDS’s SP performance (following not too dissimilar results) last week? That seems more likely.

RDS is now down 8.5% on their pre-results high of c1800p. If we follow suit then we can expect 326 within days.

This has nothing to do with prospects or the real value of the company. It’s just roulette.

Tinker

I am guilty of overreaction too. We need to remember where we were a year ago. SP was about £1.90 in Oct 2020. Now we are complaining about a “return” to £3.40, a level that was a post-lockdown high when it was reached just 5 weeks ago.
Tinker

So we beat expectations .... and the SP falls 1%. Fair enough. Not more insane than everything else that’s been happening lately.
Tinker

If Boris was daft enough (and I hope he’s not) to go down the route of carbon penalty taxes then we’d just have to do what the drinks industry has always done: pass the price on to the customer. We have got a commodity that they are going to need for another 30+ years. They cannot power their economies on the tears, indignation and self righteousness of an unbalanced child.
Tinker

Maybe we need to remind people that Greta’s middle name is “Tintin.” (It really is.) Would Jacob Rees Mogg be taken seriously if his parents had named him Betty Boop?
Tinker

Updownflat, yes I can see that with the prospect of interest rate increases it would make sense to get debt down a bit more. Your ceiling on buybacks (£4.50) looks optimistic at the moment but isn’t out of line with brokers’ forecasts.
Tinker

Cong,
You’ve raised the interesting question of whether the company should spend a mind blowing sum on green. On this board we’ve been arguing about the benefits of paying off debts, buybacks and divi. To me paying debt and buybacks are alternative ways of SHRINKING the company. Debt is only bad if you are paying more in interest than your assets are earning for you. Buybacks (other than to offset dilution) increase the proportion of the cake to be distributed to each remaining shareholder but don’t increase the size of the cake. You simply cut off your opportunity to expand.
I don’t know whether contraction or expansion is the best option. Like you, I’d like to hear people’s views.
Tinker

Jmak, I believe the BOD is thinking along the same lines as you. They are not unhappy about a depressed SP as it increases the number of shares to be cancelled. A sharp increase in dividend would mean an immediate and (in their view) undesirable lift in SP. This is frustrating for people like me (£5 average and seeking income) but understandable as a longer term strategy.
Looney is in his early 50s so I can imagine he is thinking 5 to 10 years ahead rather than getting us up to £5 by Christmas.
Tinker