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Hi Nickel, I'm talking about P&L gains/losses which is basically from PLUS being the other side of unhedged successful/unsuccessful trades and therefore making a non-recurring gain or loss. My issue is that I've only just found out this was -$103m for 2017 and I couldn't find it disclosed in the prospectus or 2017 report.
Posted this in a few places and am yet to receive a satisfactory answer. Going to post it here in case it helps someone or someone can explain it for me. So in the 2017 annual report the company stated "In 2017, as in 2016 and 2015, the Company did not generate net revenues or losses from market P&L" but then reported in 2018 "Total P&L gain in 2018 of $172 million (FY 2017: loss of $103 million);". Liberum also stated that the $103m loss was mentioned in the prospectus but I couldn't find it anywhere. There looks like a mismatch of figures here, from what I can tell the loss for 2017 hadn't been reported until now, although I may be wrong. I don't know how to value a company if I can't be sure what revenues/losses are one-off due to market losses/gains. It also makes me doubt management if they can't be trusted to report the figures transparently. Happy for another poster to tear this apart though.
Don't forget Patisserie Valerie which had its accounts with a net cash position of £30m signed off by Grant Thornton LLP last year. In actuality they had a net debt of £10m due to hidden overdrafts which they likely used to fund the puny dividend. Irrespective of the fraud investors were still willing to pay 22 times earnings for a tea and cake shop during a high street slow down. Let's hope PLUS with its efficient marketing engine and 100% payout ratio can command a 10 PE multiple soon, eh? Fingers crossed for results tomorrow. ATB
I stopped trusting the Ferrexpo management in 2015 when $174m of shareholders money was 'lost' when Bank F&C went insolvent. This bank was controlled by Ferrexpo’s largest shareholder Kostyantin Zhevago. Now today I'm reading these 'unexplained discrepancies' when I came across an interesting titbit "Last August, Ferrexpo informed the market that a $16.3m payment to Blooming Land from a subsidiary of tire company Rosava Group was repaid using funds subsequently received from the miner, and should have been disclosed as a related party transaction. Rosava is controlled by chief executive Kostyantin Zhevago." (source; investors chroneicle). It looks to me like the oligarch CEO, Kostyantin Zhevago, is taking you shareholders for fools and milking the company for his own benefit. Any others have thoughts on this? Personally I was happy to get out at break even but I must admit I left some money on the table with this company. ATB
Why? Tobacco out of favour, menthol ban spooked investors, high debt due to Reynolds acquisition, slightly stronger pound, rising interests rates makes bond proxy stocks (i.e. tobacco) less appealing... there's loads of reasons. Having said that this could be the buy of the decade if things turn out OK for tobacco going forward.
I didn't think much of the new CEO on the call, she'd been there 3 months but it felt like 3 minutes by the way she was talking about the business. However she showed the shorters who's boss by buying £100k worth for a quick 10% discount and now the price is back above the level prior to the update. CEO 1 - Shorters Nil
I thought at the time those swooping in to buy shares at 50p were a bit silly - sorta like giving a mugger your phone when he only asked for your wallet. In a just world the directors would be held accountable for this. Maybe Mr Johnson was too busy making political donations towards Brexit to do his job properly? I suppose most of the investors were institutional holders i.e. pensions of ordinary people so this loss will be absorbed into slightly lower fund returns. However as an individual investor this makes me even more wary of companies with 'too good to be true' numbers, apart from that this was pretty much impossible to second-guess. Unless those that allowed this to happen are punished something like this will happen again. Guaranteed.
Could you please explain how the certificate process works in a bit more detail? Currently I receive 75% of the dividend inside my ISA account with my broker. I then reclaim 10% via ESOP due to the double tax treaty the UK has with Israel. These funds get wired to my bank account which is unfortunately outside of the ISA tax wrapper. I assume the remaining 15% is lost. Thanks
VIX spiking up to 20 during a day of big market moves. BATS down 10%+, AMD, TSLA and most of the US market taking a dump too. We also have Brexit rumbling on and Trump tweeting like it's going out of fashion. All this volatility is very good for Plus - as per extract from Q3 report "Since the end of the quarter Plus500 has seen the return of higher volatility across asset classes, and consequently stronger trading." If VIX stays elevated for the remaining months of this quarter we could see bumper revenue as we now have 38%+ of EEA revenues not impacted by ESMA (Q3 report) combined with the 30% rest of world which was never affected. Maybe this volatility has convinced a few more eligible customer to jump through the requisite hoops too... who knows. Anyway, looking forward to a chunky dividend ($1.3786) paid next week and hoping for a strong finish to the year come Feb. ATB
Looks like $10m set aside for buyback has a trigger price of sub £13. This seems to have put a floor under the share price for the time being. These are my calculations for leftover cash for the FY: cash from H1 ($261m profit - $157m div = $104m leftover) and assuming the $10m buyback is spent and $40m net profit for Q4 (believe Q3 was somewhere around $35m based on EBITDA margin). This should result in approx. $170m of cash eligible for payout at end of year. Assuming a 100% payout of the excess as dividend then this works out at just under £1 per share (including the DWT reclaim) or about 7.7% of the current share price. I'd guess Q4 will be better than Q3 due to the higher number of EPC clients and the recent volatility we have been experiencing. The saxo numbers (CFD competitor to Plus) also look encouraging for October. ATB
Valuation reduced? Surely it’s completely univestable if you can’t trust the numbers, auditors, management or directors? It is for me anyway.
Just suggested to IR that they restart the buyback program. There was almost $200m cash leftover on the balance sheet in H1 after subtracting both declared dividends being paid. That cash would go a long way in hoovering up some of these shares that people are now willing to sell for £12 each (as opposed to £20 a few months ago). These figures obviously ignore the cash generation since the H1 results were reported, most of which is generated outside of the reach of the new ESMA regulations. Obviously the worse-than-expected results from IG and CMC has negatively impacted the sector. The overall market has been weak as of late as well. I think both these factors explain the large drop and neither have convinced me to dispose of my holding. We will see on Oct 23rd whether Plus has effectively dealt with the regulations or if they are struggling too. ATB
Also posted to another BB: Can anyone offer any advice on reclaiming the dividend? I've had two successful claims so far - I usually send HMRC the form to stamp months in advance of the dividend payment date and all is well. However, this time I've sent it to HMRC and they responded that they can't certify the form until after the payment date as my "circumstances might change". However the problem I have is that ESOP (the company that manages the tax refunds on behalf of Plus500) has a very short window (1 week I believe) in order to send them the completed documents after the payment date. HMRC takes 2-3 weeks to reply to letters. Any help with this would be appreciated - thanks in advance.
A buy signal for index funds looks like a sell signal for active investors in Plus500, which deals in contracts for difference. Last week, the London Stock Exchange said shares in the group, which targets retail investors, would join the FTSE 250 index. No surprises there. The stock has nearly quadrupled since the start of 2017 to about £15. Demand for derivatives on cryptocurrencies turbocharged revenues over the period. Profits upgrades became the norm.
But good times may now be in the past, as with bitcoin. On Thursday, the day after the FTSE news, five of Plus’s founders said they were cashing out 8 per cent of the group’s shares in a sale worth £145m, halving their combined stake. Then on Friday, gambling software company Playtech announced the sale of its whole 10 per cent stake. It has held shares since 2015.
Cynics will raise their eyebrows at sales for “personal reasons” by five founders. One of them, Gal Haber, is a board director. But well-connected private investors rarely make calls whose prescience later looks suspicious, academic studies show. Diversification and family finances are common motives, as with other investors. As if in confirmation, the founders offloaded stock worth £100m in 2016, when the share price was only about 660p.
It is indisputable the founders have the experience to interpret public data shrewdly. So does Playtech, owner of retail CFD brokerage Markets.com.
The crypto bear market is just one reason to sell. Another is a move by European regulators to restrict trading of speculative products to protect the foolhardy. In February, Plus said it believed the rules were “unlikely to have a material adverse effect” on its business. In August, the month the rules came into force, it said they could affect 30 per cent of its revenues.
Last week’s heavy selling should irk passive fund managers. Under index rules they must buy a stock that is already well off the highs of last month. For investors without such obligations, it is time to abandon ship.
Not sure for SIPP - my shares are held inside an ISA (mainly to prevent CGT tax) although that means I lose out on 15% of each dividend due to Israeli withholding tax.
So to be very clear these are the steps I follow:
1) Email ESOP and ask for the dividend claim form (usually send an email on ex-dividend date).
2) Fill out dividend claim form and post to HMRC so they can stamp it and return it to you.
3) Scan passport.
4) Complete W-8BEN form (ESOP can provide this too or you can download from IRS).
5) Complete wire instructions form (ESOP will provide).
6) Wait for dividend payment date and scan this evidence (e.g. printout from your broker website of the payment).
7) Send all these as PDFs to ESOP. If they are happy they will wire the refund within about a month.
Notes - say the dividend is $1 you will receive $0.75 in your broker account. You can then claim $0.10 if you follow the steps above. You will lose $0.15 due to Israel keeping that tax. You will be unable to claim this back in the UK if your shares are held within an ISA.
Hope that helps someone.