Member Info for Velo

Thanks for that Longish, If I'm reading that right, that senior manager that the exec complained to me about, must have resulted in a huge anount in the many £millions to finance?

- Otherwise why would it cause him to let off steam in front of a lessor minion?

One final point that "shocked me".

Looking at the 90's online and a bit before (I think) I stumbled across news reoprts back then of 10,000 BT employees were to be made redundant.

Read similar amount in a later period but decades before the latest 13,000 redundancies announced last year. I guess in the 80's and 90's BT was running the entire country effectiverly - MI5 the lot, in telecoms.

ButGezzalou, just how many employees did BT employee in its hey days? Staggerred by the causual mention of five figure redundancies again, again and again over the years.

Concludes:

So, if a company is well run, I assume all early retirees must have the company up the contributions to make good the shortfall in absent contributions now cut short from the departing employee? That exec never told me how much was needed to cope with a highly paid manager retiring early - but it hurt so much he complained to me about it! LOL!

So, did BT forgo topping up the shortfall of all those early retirees? Looking at the state of the pension deficit that ended up at one point being the worst in the entire world I expect not; now that would be a breach of regulations.

(2 posts maybe)
Thanks in general to all those adding their own findings to the beginnings of the uncontrolled growth in the pension deficit debacle.

In no particular order:

Yes, I did see something mentioned in the nineties, but was trying to fit in one post, also couldn't recall exactly what the amount was then.

The Union complaining was typical back then (my own employment back then pulled the same trick in the 80's - it was the "in thing" to do.
Which might go some way to answering the query, Would BT be guilty of breeching tax regulations if they kept contributing? Why then, would all the unions all over the country, not just BT related unions, kick up a fuss if it was illegal for BT to carry on contributing? I think it was legal to cease contributions on condition there was a surplus. But no one thought about market crashes etc., (Gordon Brown - No more boom and bust; never laughed so hard in my life). During the 2009 crash interest rates cratered. Everyone, absolutely everyone thought they would soon go back to normal in a year or two and even-out the surplus that was fast disappearing. No one who proposed a pension holiday bothered to ask the question: What happens if the surplus diminishes due to unforeseen events? Just shows with these "permanent" record breaking low interest rates that no one can predict the future. No one asked what if we never see higher or "normal" interest rates for a long time?

Like no more boom and bust delusions - no one in their right mind expected low interest rates would last so long. And that was the end of a free helping hand to get out of trouble.

On the point of early retirements. I can throw some light on that. At one point in my career I was promoted to the second largest branch in my company. They called it fast-tracking so I was no longer solely in charge as there had to be two of us - and as a young man I was called associate manager. It felt like demotion - but I did come out of it well 1 or 2 years later or so.

I found myself tasked with putting the store budget together as the senior manager was off in hospital and an exec phoned me to give me the senior manager's salary to enter in. I was sworn to secrecy but I was shocked - it was 2 & half times my salary - and I was well paid! The senior manager was early retired by the co eventually and the same exec confided in me saying. By god it's cost the company an arm and leg just to finance Graham's early retirement.

So, if a company is well run, I assume all early retirees must have the company stump up the contributions to make good the shortfall in contributions now cut short from the departing employee? That exec never told me how much was needed to cope with a highly paid manager retiring early - but it hurt so much he complained to me about it! LOL!

So, did BT forgo topping up the shortfall of all those early retirees? Looking at the state of the pension deficit that ended up at one point being the worst in the world ...

Avro - open up your spreadsheet and set aside a couple of hours.

1) Click on the RNS tab up above.

2) Scroll down to the oblong window on the left that says "Filter by category".

3) Click that and scroll down past the seemingly hundreds of entries to second from the bottom and select "TRANSACTION IN OWN SHARES".

4) You'll see 2 pages listed as available from as recently as 28th June this year - (£80m worth of shares @ 1.9635 ea).

5) Unfortunately they only go as far back as May 27th 2014 (£3.024m @ 3.927551 ea) when you click page 2
(I believe there were more entries before this date on the old LSE site but that's all they're offering here now).

Hours of fun there for you.

(Catching up with backlog) -
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Avro @ Velo, Thanks for that.
- You're welcome.

Avro @ I do go on a bit of how bad BT's workforce and management are.
- I don't.
(Unless pertinent to a specific issue).

Avro @ You must agree with the benefit of hindsight that BT's policy of buying back their own shares was sheer madness.
- Oh puleeeeze, don't get me started on that or I'll never finish tonight. Do not feed the monster in me.

Avro@ Probably like Fleccy and his cronies on here Gavin thought they were a huge bargain.
- Tsk! Geez -What is it and your patological desire to keep opening the furnace door and shoving your hand into the furnace? Why mention names? It invites discord. If you must, and I wish you wouldn't, just say "some people" or somesuch. Let it die, man. Let it die.

Avro @ Velo, Is it possible to find out what price Gavin paid for each share?
(& Fleccy further up, on Altman)
- Guys, please! You're killing me - You're killing me!
There are not enough hours in ther day.
Avro I'll post after this some pointers, for you to do it yourself.

Fleccy, can I leave your Altman Z-score calcs until last?
(That 4.09 is far, far, too high IMO).
I want to post my intended post on why I now disown the Altman-z score against BT, using the metric's own parameters to disqualify it from 'bad mouthing' BT.
But check your findings? Haven't got time. Disappearing at the weekend for week & half+ on urgent business, and want to complete some other posts beforehand. But got bits to say on Altman and your calcs - will wing my way back to you time permitting.

Fleccy/Blue Pete - I use emotive language such as "criminal behaviour" to describe my feelings towards those execs of yesteryear, who legally back then, imperilled the financial security of BT the company in the present day (even though pension deficits are way lower on the scale than outright debt) by their wiful suspending of pension contributions (as was the fashion in many companies back then).

You are referring to the closure of the final salary scheme. I'm not accusing former CEO's/ BOD's of that crime - only of imperilling their own company's future by neglecting pension deficits which the descendant CEO's of today find the can kicked down the road to deal with on their watch, when it needn't have been kicked down the road in the first place. There would still have been a deficit - but manageable and certainly not one that went round the world descibed as the largest deficit by any company in the whole world.

Next up was a clear for take-off to Fleccy's and mine recent 'disagreement' over the use of the single word 'highly' in his statement of BT being highly unlikely to go bankrupt. But too tired so leaving it for now.

He's clear to defend his corner on that matter as I've found the 'proof' that allows me to withdraw my objection to the single word "highly".

Found the evidence whilst researching on these other posts, so will post more on that nerdy 'highly' objection of mine later, as too tired now, but I think it's worthwhile as a very highly regarded metric is pointing the evil finger at BT's financial state, but like VOD I have found/used the parameters the metric allows to rule it out, although I still dislike the use of "highly" I no longer have any evidence to call upon, to challenge it's use.

I'm talking about the Altman bankruptcy Z-score.

It's important to call it out, by use of it's own rules of engagement, as I see such as I/Chronicle journalists referring to them, and maybe relying on these same metrics, without digging in to them.

Dug this up some time ago, lost the notes so paraphrasing from memory to make it short as possible. I found most info commenced around the dot.com bubble crash time. Some talk of BT's pension then, but not much in figures if I remember correctly. Actually found quicker info jumping from online newspaper to newspaper. (Bear in mind when BT's pension deficit went around the world's media citing the fact that BT had the largest (worst) deficit of any company anywhere in the world!!!

First alarm was in either 2003, (or was it 2006?) when the then CEO announced such was the strength of the company's pension scheme which then stood at only £3bn that he was suspending further contributions from the company into the pension scheme, as they would be surplus to requirements.

Right there was when the trouble started.

Feral CEO's/BOD's playing casino with people's retirement funds. (Is it illegal now for a company to unilaterally suspend pension contributions? (carries a jail sentence penalty I think; not sure but Phillip Green was the last straw, surely?)

I can see his thinking. Only £3bn. High interest rates would take care of everything. Unfortunately as we now know, low interest rates became the default position soon after from the crash of 2009. First they ran to a record duration, then the low interest rates got lower and low rates ran for longer than any time in recorded financial history, to now being citied in some US circles as being touted as a permanent fixture into the future due to quantative easing et al. (Bank of England said last year to expect the next 20 years to remain at record low interest rate levels).

By 2009 the deficit had grown (fuelled by low interest rates?) to £6bn deficit. and after the crash of 2009 they lost 100% control of it. At some point somebody thought it might be a good idea to at least recommence making company contributions.

And still, when Gavpants took over in 2013 he too thought interest rates would rise and solve the problem for him, and was slow to respond with just pot shots at solving the issue. Instead he squandered gazillions of millions on buying back BT shares throughout (2014?) 2015/2016 which could have been better spent on paying down the pension deficit. But he squandered the chance and with it his career. Then they suddenly stopped point blank. No more wasting money buying back BT's own shares (DT had arrived on the scene with EE).

By 2018 hard reality descended and the realisation that the return of increasing interest rates will never return during his tenancy and a hard £10.3bn deficit repayment plan was presented in the annual results leading up to the SP falling to 201-ish in May 2018 - and Gavpants was fired (for a variety of offences) most of which were laid by his predecessors.

So it was the "criminal" actions back in the day, of accepted behaviour, that caused the crisis. It needn't have happened in the first place!

Done some digging previously on who/events was originally responsible for the debacle that led to the current pension deficit crisis (it could have been 100% avoided entirely!)

- and it wasn't Gavpants; but he did fail to rise to the challenge until it was far too late and got himself fired after finally coming up with the solution.

Would make too long a series of posts, so if I can condense it from memory into a couple of paras will knock it off tonight - which brings me to the point of this post, Something I tripped across in researching other stuff. It's a 'funny'. Well I smiled.

Gavpants was made CEO in 2013. Now since that time there were media thumbnail sketches describing his self-preening good looks as akin to him screen testing for the lead in Poldark. Forums ran out of catcalling names over his mane of flowing locks. I liked a disgruntled investor on this forum referring to him as Gavpants, so I commandeered that one.

So, you think it was social media, like us lot, who were catcalling him names and cheeky media write-up's having fun at his expense? Well you'd be wrong - his colleagues and in particular his predecessor were at it in full - long before any of us entered the fray. Time to respect Gavpants name in full - Gavin Patterson (in case he reads this) for being a good sport as I reveal this from the FT (back in 2013) interviewing those about to meet their new CEO, and in particular the outgoing CEO -

From the FT in 2013:

" The suave former Procter & Gamble marketing chief could not be more different from his predecessor Ian Livingston, a combinative Glaswegian.

'Ian used to say that one button undone was fine, two was a but racy, and three was Gavin',
one former BT staffer told the paper. "

Avro, bear in mind that proposed 30/33% divi-cut media piece, is a broking house's opinion-only at this stage. Could still be anything until the BT man speaks; if he speaks at all on the matter.

I do though, think it ominous that the report states speculation on the matter is "mounting in the city". If an announcement is made in advance of a cut in 2021, then fingers crossed it's made in the next fortnight or so, and really lights a fire under exiting both o/sold condition and the XD period.

Sorry to read of that Longish. Hope it didn't cost too much. Stop-loss strategies are good things to have if you remain steadfast in their use and don't allow emotion to enter and tinker with them.

It's a pity on this exact occasion however, because this current SP oversold condition is/may be nearing maturity IMO, coupled with the ending of XD period on Sept 9th divi payment day, and I could believe in a natural (here we go again :) "mini rally".

Not a full recovery, but a pleasant temporary lift out of oversold condition. I counted approx 12 o/sold conditions of note since Jan 2016 - and all ended with a pleasant temporary rise in the SP when exiting o/sold.

As they've all 100% behaved like that, it's unlikely that this one will behave any differently IMO; although it might be anything of as low as only 5/10p to much more than that, maybe maximum of 3 or 4 times that amount (historically speaking) .

Nice little news report on ITV evening news tonight on how areas with poor mobile reception will at long last benefit with the new govt guidelines on 5G masts. The positive sentiment omens are slowly building, for a relief rally once XD period is out of the way.

Avro @ ". . . Lets be honest a company like BT is unlikely to have a gearing of 190% their banks would not allow it. ULVR is an exciting company with an established track record. "

Oh contraire, oh contraire! he exclaimed in the spirit of leg pulling.

BT's Net Gearing is a cause for concern at 118% with ULVR's being much worse at 190.1%

What I didn't reveal for both companies, is that the reading for net gearing can get further complicated the more items you include/exclude. For instance there's minus intangibles; but both companies are blank for this heading.
Right next to it, is one for net gearing + pension.

When ULVR's pension deficit /debt is included, the column shows ULVR's net gearing only increasing slightly to the worse - at now 194.3%. Bad, but only getting worse just a little more.
Clearly ULVR do not have a company pension problem as the increase in net gearing is only slight.

But BT does have a pension problem - and that column for adding pensions raises BT's net gearing dramatically from 118% up to 188.6%!!!

That's really bad, and now nudging against ULVR's "v bad" 190% net gearing ratio.

The bankers are well aware of BT's pension deficit and yet there they are ignoring your: "BT is unlikely to have a gearing of 190% their banks would not allow it".

- Well yes BT does have that, and the bankers are in fact "allowing it" :)

It's just 1.4% short of 190% when the infamous pension deficits are included with both companies treated equally.
(Strange train of thought this ie., Your company's ill, but mines more ill than yours LOL!)

The reason I flagged this up is that I also found something I hope you're aware of about ULVR. I became so concerned I Googled a bit on it, but such is the muscle of ULVR that all I/Chronicle say is:

". . . With perhaps the exception of its free cash flow (FCF) margin, Unilever has many of the hallmarks of a very high quality business."

Yes, ULVR's FCF is not only poor - it's worse than BT's is - WORSE!

And BT is getting kicked from pillar to post for it - and all ULVR gets is a vague one liner about it in I/C and that's it?!?

In fact BT's balance sheet metrics overall in total, beat ULVR considerably by several headings. That doesn't make it superior to ULVR - far from it. But it does perhaps invite comparisons that BT is not as poor a business on paper as you imply.

Maybe you've seen ULVR's FCF discussed on the ULVR forums and are already aware?
It's bad, but not enough to derail ULVR's gold-plated reputation; maybe you need to look into it further - but be clear on this:

As bad as BT's FCF is - ULVR's is worse! In fact, pro-rata it's approx 10% worse than BT's. Just a fact. Not casting aspertions against ULVR.

Posted in gentle leg pulling mockery, not attacking or accusing; continue with your posts as you wish - I'm not complaining :)

Don't usually post links but this one is different.

https://www.thisismoney.co.uk/money/markets/article-7392305/STOCK-WATCH-BT-cut-dividend.html

Dividends - it's well covered, so what's the beef? Just that some of it, is sorely needed elsewhere.

All articles to date have come to the conclusion that it is "likely" in the future that BT will have to take the option of cutting the dividend. You read one; you've read them all.

Just the media analysts opinion, and most were the same - they couldn't see how the dividend could continue as it is, without a cut and hence a contribution would be made towards debts and/or other projects.

But the link above after Friday's close, goes one further and says:

" . . . Speculation is mounting in the City that the former state-owned telecoms giant will . . . And analysts at UBS added to that on Friday when they predicted that BT’s chief executive Philip Jansen would cut the dividend by a third."

The second part about UBS speculating is the kind of thing I'm referring to - but the first part is new and a first (I may be reading too much into this) with:

" Speculation is mounting in the City..."

That suggests a difference to previous wild speculation and more based on inside info rumours leaking out.

"Speculation in the city is mounting" I'm reading as: There IS something afoot!

The suggestion is to cut £500m from the full divi (a 1/3rd cut) as last year was £1.5bn in divi payments that would leave only circa £500m from the net profit to assign to contribute to other projects, reducing the full year's divi to circa £1.0bn would on current estimates leave a clear £1bn left over in net profit (that alone would pay for the entire yearly pension deficit that kicks in from 2020 right through to 2030).

I dunno, it's that phrase, it's chilling. Different from individual media analyst's opinion, it has something of the no smoke without a fire about it.

I think it's looking more than ever like an announcement in advance of the 'no cut this year or next' to confirm their will be a cut after next year - just to calm the market under the guise of pleasing the market with a strong "something new" announcement.

With the SP hitting the 150's I would expect it to come sooner rather than later. Am I reading too much into that phrase?

F/Man @ "Does the forecast for profit include the money from whats being sold off?"

As the 15 analysts tasked with foecasting and advising their clients on BT, I'd expect them to be very clued up on events, moreso than the average PI.

So yes I expect they have, but have to say, only an email direct to them would confirm for certain.

Ha! (Just checking my grammar after my splurge of posts) and I see you now Bkkbkk under this heading. (My reply echoes Fleccy's).

You ask the 6 million dollar question:
- "What are your views on recovery time frame ?"

So if you deposit $6m in my PayPal acc, I'll tell you. I offer a guarantee that if I'm wrong I'll put a cheque for your $6m back in the post to you :) :) :) Followed by radio silence because I'll be busy.

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Joking aside, the only truthful answer is nobody can say they know but everybody has an opinion. I'm at heart, primarily, a trend follower; momentum based and ultimately follow the trend with the aid of my trusty trend lines - and they all hate BT at the moment.

I do though feel an expectation (TA based) of a ceasing, if only temporary of this SP decline, might emerge over the next week or two - solely, (and only) because the SP is technically deep in oversold condition. They always come out of it, and it's nearly always a pleasant experience. Often temporary as it reflects seller exhaustion and not a change in sentiment. My long term trend lines are of no help. As I say - they all currently hate BT - on sight!

When the trend lines turn positive I say so, and post so. They're not for turning - yet. And because they follow - they lag behind events.

I'd previously said (via TA) low 190's (193 actually) was the final measuring after which IMO if breeched ("the gates of hell open up") and the SP goes Off Grid, in it's big decline.

I have to accept after breaking low 190's, that only weaker supports are on offer now, by looking to the left on any chart. V high 150's is next, exactly where BT finished on Friday.
However, the SP has behaved like a right thug, armed with a flick knife at every support I've thrown at it - contemptuously stepping over each and every line in the sand! Without so much as a backward glance.

It's anybody's guess - and that's the unvarnished truth.

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PS. I'd like to know if the media analyst (keeping tags on him) who forecast £1 - will become a buyer at that price and cite that BT is now worth the risk?

Also Andyagogo postulates that he thinks approx 125 - 130 is the floor. Same question; would he then become a buyer too, and start citing that positives now outweigh the risks, at that price?

Me? I'll wait until the trend lines commence turning positive.

Fleccy, just checked the latest TTM for ULVR and Net Gearing is reading slightly worse at 190.1% !!! Yikes!

Then again their Interest Cover shocked me with a brilliant, great stonking, 33.6 !

So they too can pay their debts just so long as no 'unexpected bumps in the road' emerge to upset them - to quote the accountant types.

PS.
ULVR make mega, beyond belief net profits - but on balance sheet metrics, BT come out the better on overall "metrics". Couldn't believe it!

Not tonight but could quote them verbatim on another day. (But you'd only want to use them as a weapon to taunt Avro :) :)

- Am intending doing a sort of 'state of the union' update on all of BT's metrics some day soon, before going in to Q2/H1.
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It's easy to buy shares, but hard to buy the right ones.

Only just noticed as I clicked, there's a strong buy rating selected on my post, rather than my default neutral.

I am NOT strongly reccommending. Never have, for any share!

If you're a long sufferring investor in BT and have no intention of selling no matter what, then this relaying of analysts forecasts is for you.

(It is strictly NOT for those thinking it's a green lighht rec for BT. It is not.)

- Just a reflection on the very latest Consensus Analysts forecast for the next 3 years based on 16th Aug update on BT's own website (mean and avg added together and / by 2) :

2019/20
Revenue = £23.007 Bn
Net Profit = £2.008 Bn

2020/21
Revenue = £22.917 Bn
Net Profit = £2.257 Bn

2021/22
Revenue = £22.990 Bn
Net Profit = £2.382 Bn

Notice anything about the Net profit??? YES! All the analysts' consensus is for a CONTINUATION of increasing net profit y-o-y!

Just look at year 3 - they reckon a third of a £bn MORE in net profit generated!

PS. That £2.008bn net profit is forecasting less than last year ( but the subsequent years are at least making a start in the right direction, are they not?)

- Here's the thing: I reckon because of all the bearish sentiment they're under forecasting so as not to end up with egg on their faces.

Consider:
In Q1 both revenue and net profit forecasts were beaten by BT actuals! (They were still less than last year; hence the non-stop slide in the SP).

But the point is made; the analysts are underestimating their forecasts as proven by their Q2 forecast for net profit being less than BT has actually already achieved in Q1 itself!

Of course revenue is a almost a constant no change over the 3 years, but at least that's a first in revenue ceasing to decline y-o-y as witnessed to date. Revenue holding steady is a mild 'start' and makes a change from almost non-stop decline.

Repeat: Not a recommendation; just an observation.

(Part 2 Concludes) >>>>

. . . So let's not over gild the lily here. Going forward, then yep, may have to be further cuts and economies to make ends meet what with Fibre, 5G, and all the rest.

VOD is in the same predicament and has decided to sell the crown jewels (it's towers) to overcome theirs.

PS. I notice you haven't picked up on 'Net Gearing' as a further measurement of how serious the debt is getting. BT's is diabolical.
15% is considered prudent :)
Anything over 100% is considered risky!
BT's is 118% and shows it's vulnerable to unexpected "bumps in the road".

Needs a good driver at the wheel then.

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Andy - Hope I've remianed "mild" as I promised. If offence caused, not intended; it's only because I've run at these posts in one splurge. Keep posting Andy - good posts from you.

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Going to try and conclude on an Analysts future next 3 years forecast as a positive. Back in mo'