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Possibly!
It seems perfectly obvious that Rice spent £1.3 million of his own money on buying the shares because the share price is at a peak and he expects it to go down. He is clearly motivated by losing a decent chunk of his personal wealth...added to which he knows that CWC is going to slash the dividend making it an even worse investment. It's what directors tend to do you know.
Yes I'm also happy to hold and will be patient. I bought at 30p so my annual yield going forward will be about 8% which is very good. In fact for anyone investing now it is still well over 6%. I disagree with observingmen and think this is now a more likely takeover target in its restructured form. I'm also not sentimental about the company's past as a British institution. But every investor is entitled to their opinion!
A good price for the business and a good call by the Sunday Times!
Sunday Times today reckons the Macau deal is as good as done and will be announced shortly - for more than $750m.
If you dimiss something as drivel you should at least say why. The figures legalandgullible has quoted as EBITBA and debt are accurately extracted from the company's latest accounts. Care to offer us some figures of your own to back up your opinion?
Apologies - typo in my last post, final sentence should read 6% not 7%.
At the last year end CWC paid a final dividend of 5.33US Cents making an annual payment of 8 US Cents, but they said at the time that in future they will maintain the dividend at 4 US Cents per annum. The next interim dividend of 1.33 USCents will be paid in January 2013 and the final of 2.67USCents will be paid next summer. So the reason the market has ignored it is because CWC are doing what they have said they will do. Its still a yield of more than 7% so not so bad!.
Thanks for posting that. The Times and The Sunday Times seem to have good sources. They called the Vodafone takeover of C&W Worlwide several months before Vod made their move.
Well, if this goes through, the value will give a fair indication of how undervalued this share is.
Seems to be chugging along pretty well today.
I would agree that its a buy at this sp. However if you are relying on the dividend yield I would wait until the BOD comment on what the dividend policy will be. If they hold it at current levels (and they may do as historically there has been plenty of earnings cover for dividend payments in MAYG) then the yield will indeed be around 8% on the current sp. However it is possible they will cut the dividend, I guess it depends on what their revised forecast profit figure will be for the current year.
An article taken from Money AM: Reel in Cable profits News of stabilised markets at overseas telecoms group could prompt powerful rerating ========================== Buy Cable & Wireless Communications (CWC) ahead of a potentially significant rerating on confirmation that key markets are stabilising and cashflow concerns easing. The £860 million cap is likely to use its interims (8 Nov) to flag that operational problems in the Caribbean may be close to bottoming out. Meanwhile markets in Panama and Macau should show pockets of growth again. With telecoms reform now pushed through Jamaican parliament, the playing field has been levelled between Cable and its local rival Digicel. This will potentially provide 'one of the biggest growth opportunities' for the firm, say analysts at Execution Noble. The telecoms firm has been heavily promoting new business opportunities in Jamaica and has cut loose several low-margin contracts elsewhere across its operational portfolio as part of a rationalisation drive. Confirmation of progress in November could finally draw a line under many of the market's doubts over the group's recovery potential. It could also provide reassurance that future dividends, slashed earlier this year to 4¢ a share, are not under further threat.
That's the worst scenario I guess. Maybe they wanted the CEO out and used this to do it. The RNS was fairly specific about the problems only relating to a few specific areas of the business. I was interested that one analyst said he expected the year end profits to be 15% down on expectations, if that is the case then it is hardly catastrophic. They do need to find another CEO fairly sharpish though.
MAYG has always performed well, has a strong order book and plenty of cash. The company's angle is that there are two or three specific problems and the rest of the business is sound. The company has also acted decisively and sacked the CEO, and anyone who has had involvement in PLC management will confirm that is not an easy step to take. The real problem is once you have a profits warning it can take a while to build up credibility again, unless you get out there and talk to the City. We'll have to see on that one. I think the half year results are key now. Should get those at the end of this year. If the company is still profitable (although below expectations), maintaining dividends and looking strong for the future the share price will claw its way back. Otherwise there may be more pain to bear. For what its worth I think this will bounce back to £2 or more in time and it is a take over target at its current share price.
I echo your hopes. The reason I see it as a safe share is that (rather like CWW before Vod interest) the assets owned are worth several times more than its market cap. At present, even after the recent increase in sp, the whole company is only valued at £870 million. It has debt of about the same amount so its enterprise value is about £1.8 billion. It is worth much more than that for its infrastructure alone. The markets it operates in have limited exposure to the Eurozone which is no bad thing at present. I also like to see a director commit to his own company and Tony Rice spent well over a £million of his own money buying shares at prices well into the 30s. I bought these at 30p and the targeted 4 USC annual dividend at that sp gives a yield of about 8.5%, and for new investors its still over 7% at the current sp. The recent results suggest steady progress and, as you said on Thursday, slow and steady is good. That's especially what you need in a an investment yielding good dividends. All imho of course!
Not heard anything about the reason - but the increase was quite sharp towards the end of trading today. I bought quite a few of these a while back as a safe share with a good dividend, but any capital increase is also welcome!
Agree it isn't a complete disaster, still got plenty of cash and an order book worth £1.5 billion. The whole company now only has a market value of £90 million and that is less than when it floated - which is nonsense. If you have the patience you can make much more than 5-15% from these levels imho.
Correction it's 5.33 US Cents!
5 US Cents which translates to about 3.39 pence - and it is due to be paid 10th August.