Member Info for tomglan

Sounds like a load of bull, it should be all electronic surely? Might be time to switch broker - I use iWeb and can recommend. ATB

Market didn't fancy another 2% drop today... perhaps a few people have realised that an initial dividend of 6% growing at 10% per annum adds up quite quickly, especially when compared to <4% for PM and BATS.

Just had my refund through... all it took was 5-6 emails back and forth to ESOP, one letter to HMRC and printing scanning and filling out about 10 pages of documents. That was for the dividend originally paid on 27th Nov 2017. I got �18 quick back on top of the �163 paid direct to my broker at the time. That �18 was hard won, might treat myself to a curry with it. However, have quite substantially increased my Plus holding since last dividend so hopefully all the paperwork will take less effort next time - I know what they want and I'm prepared to give it to them!! ATB

In for another 100 at 28.70 (6.5% div yield on 2018 forecast increase). Will be buying more at 28 and possibly lower if it gets there. Looking at the last time this was 28 quid the figures were not as good as where they are now. I have also factored in the benefit that a stronger GBP vs USD will have on paying back the dollars used for the US acquisitions in 2015. Time will tell how badly I get burnt :-)

...should help Next, GBP / USD basically around the same level as prior to the Brexit vote. Therefore they won't need to raise prices as quickly, which should help sales. Also, nice to see the 100k+ shares Next are hoovering up each day via buybacks. Be nice if we got below the 140m shares outstanding mark this year. ATB

I'm either an investment genius or complete dolt for buying more as these drop lower and lower...next block to be purchased at �28.50 giving a 6.6% dividend yield on the estimated div for this year (�1.87). Anyone else in the same boat? ATB

I'm not a shareholder (or shorter) here but the questions I'd be thinking about are: 1) Can management still be trusted? Were they open and honest or did they leave it to the last minute to inform shareholders of deterioration in their market? 2) Can they pay down the �524m in net debt whilst still paying a dividend? 3) Was the directors selling 10,000's of shares at �20 an indication of what they thought the business to be worth? 4) Why has the company spent so much on acquisitions and PPE over the last few years if all these assets will now be generating lower returns? Was this spending a good use of capital, given the existing debt levels and accompanying interest burden. Side note: I'd be interested to know why shareholders were willing to pay 20 times earnings for a company that generated �81m in operating cashflow in 2016 of which �78m went into investing activities leaving �3m for dividends and reducing debt? That seems to me like the capital expenditure of a steel mill, not a funeral operator! ATB

I don't mean to come across as rude but maybe you shouldn't invest in companies if you aren't able to interpret the financial statements and understand where the cash to fund the dividends is coming from. If you look at the cash flow statement for 2017 you see net cash from operating activities is �3,065m. The company spent �287m on investing activities too. The company also spent the following on financing activities, �548m interest on debt, �1,331m net reduction in debt, �119m share repurchases, �1,528m dividends paid to owners. Grand total for financing activities is �3,379m. So therefore we have �3,065m minus �287m minus �3,379m = -�601m reduction in cash. Therefore, not only did the company manage to pay it's owners �1,528m in dividends it also reduced OVERALL net debt by �730m (�1,331m - �601m). That means the company will have LESS interest to pay in the future. Plenty of cash and they are sticking to their medium target of 10% pa dividend rises, although for how many years they can keep this up is up for discussion. You can also search the annual report for 'adjusted earnings per share' which is �2.67 and adds back on various amortisation charges (non-cash) so you can get a better idea of the underlying performance of the business. I'd highly recommend the book: Warren Buffett Accounting Book: Reading Financial Statements for Value Investing if you want to learn more. ATB

What attracted you to Debenhams? Was it the falling LFL sales? Or was it the slim 3.3% profit margin for Debs vs around 15-16% for Next? Or the �276m in net debt vs only �75m in profits in FY 2017. In comparison Next has no net debt when you factor in the �1billion+ customer receivables financial asset (store credit). Sorry to be sarcastic but genuinely intrigued why you prefer Debs out of the two? I understand their share price took a hit recently - is it simply that it is cheap?

wait to see*

�11.50 now - can't believe I managed to buy another block for �7.80 just before Christmas! However, looks like all the nervous holders have now sold. I'm going to sell to see the results for myself before top slicing my lot, mainly as I love seeing 100%+ rises in reports :-) Good luck to all holders

Hi Sprinkler - you are correct. Reducing the shares outstanding by 5% is the same as increasing per-share profits by 5%. Sorry for the confusion - the profits won't rise from £705m to £740 due to buybacks, however what I was doing was showing that Next is getting a good deal by reducing shares outstanding by 5% for £300 million. It is in effect getting almost a 12% return on that money (compared with say, using it to reduce bonds outstanding and saving the 5% interest from that). In terms of how this 'new' buyback will impact profits, Next says in the statement that the buyback at a price of £45.25 would boost eps by a similar amount, so 4.7%. However, the extent of the overall increase (or decline) all depends on overall operating performance for the year. My guess would be another flat-ish year - maybe a small increase in eps? Happy to sit and wait, collect the dividend and watch management chip away at shares outstanding. Hopefully the SP stays below £50 otherwise the buybacks won't be as effective.

Hi - I'd like to try shed some light on the buyback logic. Here goes, so Next have £900m corporate bonds with a 5% or so coupon which is covered by £1-1.1 billion of customer receivables in the form of a credit account (approx. 20% interest). This is from their store card, basically the customers who pay on credit. So in effect a nice balancing of a financial debt with a financial asset. In regards to paying down debt, yes they could reduce the number of bonds and save 5% a year, however they could also spend £300 to increase profits by around 5% by spending £300m on buybacks (this assumes profit remains unchanged). Let's use the £705m profit figure as a guide, so a 5% increase (costing £300m) would make it £740 or a £35m increase. So a £300m outlay to increase profits by £35m or an 11.7% return on that £300m. That beats the 5% or so gained from reducing bonds a.k.a debt. Hope this makes sense. ATB

LTH - is that long term holder? Personally I already hold a lot of Next in my ISA but have hedged another big block at around the current SP for my ISA come April. I believe there is a greater chance the SP will be higher then and don't want to miss out on the current bargain prices. In the meantime I'm happy to collect 8%+ yield (div + buybacks). Happy days. ATB

Just a quick thank you to the jittery PIs that let me buy a big block at £7.80 yesterday. Onwards and upwards. ATB

Let him short... the company and myself are loving these cheap shares while they last. In the meantime he'll have to pay 8% a year in dividends to short a company with an PE of around 11.

Next spent �8m on shares today after its share price dropped 8% on largely anticipated news. That's a big chunk of the �25m it had set aside for this. Nice of the shorters to let the company buy back its share so cheaply :-)

Because management announced at the results that believe they will generate c.£50m of surplus cash this year which they propose to use for buybacks. Prior to that announcement the cash flow situation at the company was uncertain so the company didn't commit to any buybacks (instead opting for special dividends to give shareholders more options). At the results the share price rose to around £48-£50 and therefore the company now has to pay around £50 for each share. It was up to investors to buy shares sub £50 with their own cash (that was the purpose of the specials after all, to give shareholders the option). ATB

First Dunelm and now this, my UK retail shares are diamonds in the rough!

Caveat: I'm surprised too. It could have gone either way. Short term prices are based more on mood than fundamentals anyway.