Member Info for tmnky

DividendNomad,

"Evidence in the posts here suggest many have objectives to own the pie and also eat it,"

You mean I can't buy an index linked annuity and get my money back with interest? That's rough! :)

Greencoat, you said

"I have reached the conclusion that these shares are reasonably priced, even potentially overpriced, and that in the future the dividend may be held steady or even cut"

Yet UKW have increased the dividend again and in their most recent update said

"Since IPO, the Company has delivered 1.8x dividend cover and, with its revised generating budget, remains on course to generate (on average) dividend cover of 1.9x over the next 5 years. This would deliver over £1 billion in excess cashflow over the next 5 years for allocation to the advantage of its shareholders."

As regards buybacks, why retire lower cost debt rather than shares at 8%+ yield?

Similarly why make acquisitions when you can buy your own assets at 20% discount?

I'm happy with the current strategy given the circumstances.

I think we knew that the wind generators were finally acknowledging that the trends downwards were more than normal variation. I believe UKW did the same.

I don't know if the increased grid losses are a one off or a trend but something to keep an eye on maybe. I could only find figures up to 2022 and they were fairly flat year to year.

Borrowing to buyback at 9.4% yield is a no brainer.

I have used a bit of spare cash to reinvest my 2025 dividend (7.55pps) today in advance.

TerryM1

I wonder if it's almost inevitable as OB looks for shares undervalued by the market.

I first went to his blog via a link from here and noticed we had a few in common. All flat or down. Later I bought two which I first saw there, one now slightly down the other taken over. Maybe that is the 'out' or a winding up as I know you are involved with elsewhere.

Some of my larger cap shares tend to move in and out of favour, but should we expect the market to rerate the smaller, lesser traded shares?

Best of luck anyway.

TerryM1

I totally agree about Malcy as Jim800 says,

"He’s a buffoon who just pastes RNS words into his blog. Best avoided!"

I believe someone once said he does well for lunches!

I first came across him doing an interview with PMO CEO. Just bigged him up as an experienced oilman and executive. That ended well.

But I don't think I can agree that Oakbloke should be compared with Malcy. Facts, figures, opinions and ok a little over optimistic perhaps, but we can use our own discretion with OBs info. And he puts a lot more effort in. I enjoy the humour too.

MightT

Well done for making a difficult decision. I genuinely hope it works out for you.

I started buying at 81 old money, but extended myself a little at the lows and now have a half position in a little profit for the modest but still decent yield.

I do still have one I am being stubborn about, VOD. It is tough to take the loss even if it makes sense. But I have had it since before Sir Chris went for Mannesmann so at least I've had some good divis.

Well done.

In 2022 shares were distributed to EIG holders. I'm sure there was an RNS or something at the time.

They said at the time that no shares had been sold in the process.

It may be that the more recent 'sales' were of a similar nature or maybe an EIG investor wanted some form of cash distribution or redemption.

In the absence of any news we can only guess.

I think the jury is out on Infrared. They immediately revalued at a more sensible level and that level has proven a little high so far.

Luckily, I saw the undeserved drop in Cord and invested a little there too. Unfortunately I then too added to DGI9 around 18.

Anyway, no rush to add more, will likely wait until signs of upward momentum.

I hope we both get some return here.

P.S. Who stole all my capitals?

legsofman,

i'm completely with you on this, although the shareholders voted for the wind down, it was as a result of very poor management decisions leaving us in a bad place.

who knew you would have to pay massive fees to shift the most sought after infrastructure (data centres) right now. in a great geography for cheap power and easy cooling! there are only two explanations for me.

the aqua comms fiasco is slightly more nuanced. asia sounds like booking assets in advance of achieving them. but we will probably never find out.

emic-1, i can accept. **** happens. more foresight? i don't know.

although i can accept that the balance between supply and demand for data transmission changed due to technological breakthrough, they can't say over a period of years, yet fail to reflect that over those years. shocking. the fact that it was to their pecuniary advantage takes me to a word i am reluctant to use.

i'm toying with the idea of buying to average down my very small position, new management seems to be ok with the new figures.

i appreciate i probably don't feel as shafted as some.

"Share buyback

The Company has previously stated that once it has fully repaid the cash drawings under its CDF, it would be in a position to consider further measures designed to reduce the discount to the NAV at which the Company's shares are trading.

Given the anticipated full repayment of the CDF in January 2024 and the Board's continued belief that the current share price materially undervalues the Company, the Board has elected to allocate a portion of the proceeds from the OFTO realisation towards a share buyback. Accordingly, the Board intends to commence a share buyback programme of up to £30 million in early 2024. It expects the programme to run for a period of up to twelve months. The Board believes that while the shares trade at a significant discount to their NAV, the acquisition of the Company's shares is an attractive investment. As further funds become available, the Board may consider increasing the allocation to the buyback."

There was more about future direction but essentially : we can pay the dividend and increase it by 2.5% pa in the long term etc. May do even more buybacks if discount doesn't improve.

As regards the value of cash generation being lost, I'm with you on that but I believe the problem is even worse.

I was reading an article about the inflows into the US from the rest of the world and it comes as no surprise to me. Scanning social media, amongst what I perceive as generally younger people, there is in many cases an almost cult like mantra, unless you are nearing retirement, forget dividends, go for growth (big tech), or more cautious just dca VOO (also quite exposed to big tech, by the way). NVDA is easily going to $10 trillion! No concept of where the revenue might come from.

If you look at the UK brokers, particularly the apps, weekly most bought is typically NVDA, AAPL, TSLA and VUSA.

But I don't mind, at the risk of duplicating what I have written on other boards, for me dividend reinvestment is best at low prices, as are buybacks. See you young uns in 2001 + 20 something.

I remembered that Ukw started buybacks in Nov 2023, but Trig looks like Aug 2024. By my reckoning the original £100m buyback would be 3 to 4% at today's mkt cap.

When I was looking, I checked the NAV for Dec 2022 and it was in fact 167.1 so a mistake on my part.

According to my notes, you may wish to double check, the NAV has fallen significantly more for TRIG than UKW.

From Dec 2022 to Sep 2024 :

Trig : 134.6 to 121.6

Ukw : 165.2 to 158.6

Ukw looks very good under the circumstances.

Presumably mix of assets, geographies, forecast prices will influence it. I don't recall any one major reason.

WillJa,

I promise I am not stalking you, this just happens to be one of about 50 boards I check over the course of a week because lots of people put up good links and explain and discuss things and when that helps it's great. And lots of people who only read here benefit too. As I did for a long time.

First off, the share price has, in most cases, no direct link to the sustainability of the dividend. It's only a minor matter of timing around ex-div and subsequent replenishment of the cash through income.

In this case the dividend cover is 1.1 (down from 1.7), which we hope is just a low point due to weather last year.

It is of course more complicated due to the calculation of NAV. And then the premium or discount which is driven by many factors.

I have about 20 of these 'dogs', each of which are less than 1% of my UK high yield portfolio. I'm reinvesting dividends for maximum income. Low share prices are great for that.

If anyone is drawing down capital as well as income, it must stink.

"WHAT THE FUDGE ARE MANAGEMENT doing about it?"

I hope they are doing exactly what they said they were doing in the interim results.

Looking at strategic disposals at or above book value, exactly as they have always done and including some last year.

Buying back shares at a return of 9.7% at the time, higher now of course.

Looking at strategic acquisitions albeit in the context of the return from buybacks.

The assets are as they were when the share price was higher, I liked them then and I like them even more at a discount.

If they are correct that the dividend cover of 1.07x will continue to rise as previous inflation works it's way through into income, that's great too.

Also, the share price woes are not HICL specific. INPP etc, alternative energy funds, reits etc all down to a greater or lesser extent amidst reports of outflows from the UK market. Whether it is moving elsewhere chasing growth in the US or reflecting pension drawdown, or a combination maybe reflecting a different demographic and the ease of investing apps or something else I don't know, but I like a portion of my investments in real assets and real income and I can get those here and elsewhere in the UK market at a good discount.

I'm slow tonight. :)

45.59 - 3 is 42.29(!)

Or is it? (!)

We all make mistakes/typos.

Thank you, the 45.59 was a typo, should have been 46.59. Fat finger on small phone keyboard. :)

My calcs have NAV at 45.59 - 3.3 = 43.29 p/share or about £375m after the discount on EMIC-1 and AquaComms.

Compared with the close today, that's about a 65% discount.

At least we now know where the big write down came from. I would love to see a breakdown of the 208m but I won't hold my breath.

Given the large discount to NAV, existing projects (own shares) are probably a better investment than new projects. Similarly share buybacks are probably more efficient used of capital than paying down debt at this point. That's not to say that debt shouldn't be addressed going forward.

The dividend is already over 10% so why would you increase it?

Personally, I would go further and say scrap the dividend and buyback more shares, but that would be very unfair on those who bought primarily for income and are already sitting on a capital loss.

I guess if some large investors want out a discontinuation vote might pass, but that is not without potential problems.

For now I'll just keep reinvesting the dividends and hope that the buybacks have the desired effect.

Just a heads up in case you missed it, in the half year report they reported a 28.6% decline in income to 11.95p due to reduced dividends. No doubt Glencore didn't help.

I haven't seen any guidance for the year but last year was about 50/50 so can only take a wild guess at somewhere near 24p for the year which they said would be substantially all distributed as dividend.

At least with the discount to NAV there is potential upside.

The sale announcement was a little lower than OB's pencilled in figure of £36m at £33m, so not terrible under the circumstances.

Hopefully more progress soon