Member Info for Velo

Just wanted to list up the past couple of year's revenue for easier perusal and to get a handle on how concerned, or not, investors should be on annually declining revenue, to finish off the initial post on increasing net profits.

Year ending March 2017 peaked with the highest revenue @ £24,082m, so from that point onwards -

REVENUE:

2017 = £24,082m

2018 = £23,746m ................ (Down by £336m)

2019 = £23,459m ................ (Down by another £287m)

Forecast for -
:
2020 = £23,096m ............... (Down by another £363m)

Forecast for -
:
2021 = £23,021m ............... (Down by another £75m)

Just a small amount decrease each year. No biggie - falling only slightly each year, yes?
------------------

BUT wait! - Just look at the cumulative total in lost revenue from 2017 to forecasts up to 2021

- it's a cumulative decline of = £1,061m - Over ONE £BILLION in lost revenue - due, in over 4 years!

That must be impacting on the wider market's view; even though net profit as posted originally earlier today, has never stopped INCREASING from that date to this, and forecast into the future for even more significant rises to come.

I think that must now be the 101st possible reasons up for consideration and attention, on finding out why the wider market hates BT - Is it decling revenue? Does the market want everything, despite being handed over increasing net profits?

Part 2 concludes with -

Also if you think UK investors have a hard time wondering why the market is ignoring BT's fundamentals the next section that followed commenced with: "BT’s Fundamentals Deserve a Higher Valuation
We believe the market is punishing BT’s stock too harshly for some legitimate concerns...."

So even in the US, interested parties over there, are no wiser why there is a fear of investing in BT.

The 11 page report's final para concludes with: "... Also, the stock yields 7.2%, with a dividend that we believe is sustainable. This means SHAREHOLDERS ARE BEING PAID TO WAIT FOR THE MARKET TO RECOGNIZE BT’s VALUE. This is currently the second-highest yield in European telecom and higher than Verizon’s (VZ) or AT&T’s (T) in the United States. With the stock’s continued pullback, BT moved into 5-star territory on May 18, making it one of only two 5-star-rated European telecom companies we cover right now."

And in no uncertain terms at the very commencement of that article the first para concludes with: "BT’s stock price has been hammered because of issues at other units, including regulatory issues and concerns regarding its underfunded pension. However, we believe the market has overreacted to these issues and BT’s fundamental value is being overlooked".

So all-in-all, some of the top rated analysts across the pond are of the opinion BT's value is being overlooked and undervalued. I think most longs in BT are already in accord with that view - it's just that well phew! it's taking one helluva long time - in years and years - for that to be recognised by the wider market.

(2 part post):

If, interested, the concluding part to that portion cut-off in Pacey's article paste below, concludes with:

" The share price slump has pushed BT’s yield to above 7%, making it one of the top yielders in the FTSE 100, but there is speculation that BT will be forced to cut its dividend, which last year was unchanged at 15.4p per share.

and goes on to finish with -

" Jansen said this month as BT announced full-year results that “we have a lot of work to do to … deliver long term sustainable value to our shareholders”. Last year’s final results showed A FALL OF 1% in REVENUE to £23 billion, and BT expects revenue TO FALL 2% in this financial year".

(That last sentence confirming the continuation of a declining revenue, for awhile yet, as mentioned previously).
--------

Discovered that the in-depth, 11 page, A4 analysis of BT that was one of the finest analysis I've seen on BT last year, was published on the US .com site of Morning Star, (2018 on 22nd June by a Allan C. Nichols CFA) entitled:
BT'S FUNDAMENTAL VALUE IS OVERLOOKED and who has been specialising in analysing BT since 2010 and has numerous articles by him on BT and VOD. (I prefer his articles as he heads up the analysing teams). He appears to specialise in those two.

I printed it off in full last year as it's a keeper and analyses BT's likely progress up to 2022 /23, so it's still current, and I'd recommend it to all long term investors in BT, as a copy/paste/ or print-off.

In part reply to Avro's query about the Corbyn effect, here's a para devoted to Corbyn from that article that I've highlighted in CAPS above (you'll need to sign-in on the free membership to read it in full) on just that subject with the impact Corbyn could have on profits -

"... Clearly, BT’s free cash flow has benefited from the steadily declining tax rate. We model the company as if currently passed tax rate declines will occur. ONE RISK IS JEREMY CORBYN, the leader of the U.K.’s Labour Party. He is leading in the polls, and if he is elected as the next prime minister, there is a good chance that taxes not only won’t be reduced but instead might be increased. If the U.K.’s tax rate were to increase to 25% starting in fiscal 2020, our fair value estimate would drop about 9%. Free cash flow after the dividend with a 25% tax rate would decline by almost GBP 400 million in fiscal 2022. While this is significant, it wouldn’t require a cut in the dividend. Of course, an increase to a higher tax rate would be even more damaging. Even though a 25% tax rate would push free cash flow slightly negative in fiscal 2020, we-don’t-think-management-would-cut-the-dividend. However, it might choose to hold-it-steady-for-a-longer-period...."

Also if you think UK investors have a hard time wondering why the market is ignoring BT's fundamentals the next section that followed commenced with: "BT’s Fundamentals Deserve a Higher Valuation" -

"We believe the market is punishing BT’s

Hi Avro thanks, you're welcome - and to all, for the appreciative feedback.
- Also condolences on your recent loss last year. Last year? It must still feel as if, like it happened last week.

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Was going to reply "dunno" as unaware that Telecommunications are on Corbyn's target list. Had assumed his interest was in basic utilities like electricity, gas and water, (railways?) where they have active watchdog ombudsman organisations and those consumer linked organisations that appear on TV news programmes as commenter's when interviewed by the presenter on rising utility price complaints.

Doesn't seem to be much of a movement in complaints about telephone bills as they're all conveniently packaged into broadband packages, so little mileage politically for Corbyn and co, so agree with rxdav's initial reply and subsequent posts by others that followed.

I think BT will be safe from additional, further state interference, save for the current Ofcom set-up.

But I do know a man who does hold an opinion on Corbyn's effect on BT, should he get elected Which I'll copy paste in a post next, in response to Pacey's Morning Star article.

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Also, wanted to highlight the declining y-o-y revenue by each year, to put it all in to perspective (in a v short post) but will post that separately, as it's not much of a decline each year but does add up to quite a lot over say 4/5 years or so; maybe it's that, the single absence of just one forecast of expectant rising revenue either standing still or better - increasing, rather than a continuance of all forecasts into the near future all showing a small decline each year in revenue, to continue awhile longer.

PS. Overlooked XD day next week so of course my stating that a damn good reason would be needed for the SP to go out below the 120's - well I suppose that's one but hopefully this time it does prove temporary only.

Yes, agreed. Barring a continuance of the rabid fall in US markets tonight, spreading contagion to overseas markets, I see no reason why the 130's won't put in an appearance v soon. VOD commenced rising out of oversold condition on Tuesday, so is good to go. However, I don't at this point see much further than the 130's, with 131 now reversing polarity from support to resistance and thus now becomes your enemy to overcome.

And additionally, because at tonight's closing SP, the P/E ratio is only marginally below the industry average; so the reason I don't see much further than 130's at this point in time is that I regard 136p-ish as more or less in line with the Industry market average with regards to the P/E ratio.

VOD's forward P/E is PE 15.7 just marginally below the Industry average of PE 16.5 (Which equates to 136p-ish).

Hence my view until something 'new' appears on the horizon the best that can be expected is that 130's will become the SP's new home for the time being. There is an upside to that though.

With 136p-ish being what I consider fair price; as regards average PE ratios, you'd have to have a damn good reason to drive the SP below and out of the 120's just as you would need a good reason to drive the SP well up into the 140's and beyond. (Silly high PE's are for hot stock/high flyers only, not mature businesses with impressive divi yields).
- Apart from once in a generation complete rule-breakers such as Amazon.

130's area is now (IMO) the SP's, Little House on the Prairie home, where it will camp out until that is, something 'new' maybe, is revealed about VOD.

Again all IMO only.

(Concludes...)

I'm of the opinion that the upper area of 190 - 195 ie.,194p-ish, is where the downtrend might falter. All trends are against that thought, and it still has to come out of oversold (VOD came out of oversold on Tuesday, so I'm expecting it has a chance of getting back up into 130's v soon).

So, first the SP has to come out of 'panic driven' oversold condition, before even thinking of attempting to attack the (now resistance) of 200p.

In the meantime I'm holding the thought that where 200 failed - 194p won't. It's very close so won't have long to wait to find out.

The SP has butted up, closing against 196 and no further all week, since last Friday - so 195 is holding it's own so far (as a closing price) at an interesting juncture tonight.

First off, BT did well to avoid the general market malaise today, which shows that a share that already has much of a market's dissatisfaction baked into the price is often somewhat protected from general market drawdown's or suffer to a lesser extent, where more highly, generously rated P/E Shares feel the pinch that much quicker.

Talking of PE's, BT's is ridiculously low. The forward P/E ratio for BT currently stands tonight at only P/E 7.87 !!!

The Industry average is P/E 16.5 (with the FTSE @ P/E 13.6). In other words it would have to be slightly more than double what it is tonight, just to be confirmed as 'merely average' to the industry in price, and would mean BT sporting an SP of circa 410p! - Just to be plain average to the industry, no more!

Well it's going to take some time before BT can lose it's "cheap" tag and be considered average for it's sector. (VOD by the way, low as it's SP has fallen, is only marginally below that average P/E ratio).

So by any yardstick BT's SP is ridiculously cheap. Value writ large. Yet the market is unimpressed hence the divi is now @ a forward yield of 7.64%.

Yet there are no takers. 7 point odd P/E and 7 point odd divi yield. The 'Deadly Sevens' as an Investors Chronicle article stated last year (should be Googlable for free).

Net profit for the year just ended was £2,159m -
but look; next year ending March 2020 is forecast to come in at £2,444m
and the year after ending March 2021, is due to come even better at £2,540m.
So what's not to like (well apart from a bit of debt)?

From the low of 2017, the net profit has increased year on year, every year since then, and increases yet further this current year and again next year. So repeat: what's not to like? Could it be the lack of growth in the revenue? Since that low in 2017 the revenue has decreased every subsequent year, and despite increased net profits forecast for the next two years - both of those years are forecast to come in less, sequentially, so that from 2017 to 2021 revenue will be seen to be on a steady non-stop (so far) decline. The metrics for BT mostly all show good value, but some are beginning to curl at the edges. But here we are at 196p and it's still deep in oversold condition.

I'm feeling comfortable sitting behind 195, as I'm thinking 195 - 190 may be where this current down trend halts or even reverses, even if only for a short period. But if 189 appears, then all those suggesting 180's, 160's, 150's, 130's etc., etc., would be in with a shot in the coming months and year as 189p would confirm my worst fears that 200 has gone the way of 300, as it did 400, ie., gone and into history.

(Continues...)

Science fiction film on Sunday, called: Arrival. If you saw it, did you see the 'scene that mattered'?

Wasn't going to watch it, but it was on in the background whilst having a TV dinner. A colonel was introducing a language expert and physics expert to their new teams, set up to find a way to communicate with aliens who had landed on earth. They'd tried everything to no avail hence the introduction of the new team leaders/ experts.
The colonel asks the struggling team: "Well have you tried patterns, numbers - Fibonacci?"

What did he say? FIBONNACI !?! The fork nearly missed my mouth! That had my attention.

Well now I didn't want to watch it - I had to watch it :)

Never seen Fibonacci referenced in any science fiction film nor any other kind of film, a first. Observed in nature, science, even NASA have been known to use it, but more commonly known nowadays, for its deployment in the stock market.

Couldn't believe my eyes when having a cuppa and saw 195 come up. So soon. And so fast since the topside of 200.

So a question for the weekend.

The question has to be asked, have these latest annual results sent the market in BT, into panic? Is it because they believe the divi will be cut, so are moving out ahead of that? As the SP has mostly done nothing but fall since 2016, hard to pin it on any one thing, except to say the market wants its pound of flesh before it'll "settle" at what it regards as a fair price. The SP is for defo, deep in oversold. That will end at some point soon. Was it for political reasons today? So when 195 showed up (196 by close), I thought time for a quick review back to late March early April 2009 where you could pick up BT for circa 50p the all time low, at the depth of the last major stock market crash, and took readings from that date to the all time high at the beginning of 2016.

Buying BT in early April 2009 and selling 7 years later in early 2016 would have made anyone mega money. Mega money and BT? Yes, forgive me for mentioning both words in the same sentence.

Last night I posted of regarding 195 down to 190 as being the next major support area of immense strength IMO. Perhaps even acting as a brake, and no sooner had I posted that, than here we are in the blink of an eye, at the very foothills of entering that major support area. That is just not cricket! It's as if the bears had read my post and said:
Ha! That's nothing to us mate, just you wait until tomorrow.

So using Fibonacci Retracement levels over a 7 year time span, I thought what does ol' Fibbo the mathematical monk from the 12th century say? and wheeled him out.
- and his 'best' of all (to my mind) the "golden ratio" of 61.8% reading, lands smack bang in that 195-190 area, specifically at 194p.

So I now stretch my neck out an extra mile, added to the mile I already stretched it last night, and offer up the thought - was that the floor just closed this evening? If, additionally, the bullish period as I see it, next week IMO, of 28th May to 6th June is kind enough to be in play as I intimated last night, then it could just help save me from a right milkshake soaking come next week.

Is this the floor? (Temporary floor, that is). There said it. Most unwise. Get your milkshakes ready for next week in reply should it not be (from MacD's - they're cheaper there; banana or vanilla please).

If you lot can take a break from non-stop arguing all through the night, you can allow time, to take in that the PM has resigned and leaves office in a fortnight.

Well disappointing to actually close on 198. Bummer! Thought maybe it would at least close for just once on 200 before even considering closing lower. It's never closed on 200 whether May last year, or May this year. Not even a close on 199! From an end of day closing perspective, it's hopped straight over 200 like it wasn't there. These things as everyone knows, aren't binary. An SP doesn't have to go up or down sequentially. 3 days or so of intraday visits to 200 itself, although never closing on it, was just leaving tell-tale damaging scars of serious warnings.

So, contrarily, wouldn't be surprised to see it close above 200 next week, even if it turns out to be temporary. That's what we expect prices do, zig and zag. Also there's the small matter of that gap down from 219 to 213-ish on the 8th and 9th of this month. So stick my neck out a mile, and say here and now, that although I nor anyone else, knows where the SP will be in the future, I feel more than certain that at some point, however briefly, the SP will have to travel up over 200 just to close the gap from 213 up to 219, even if it did that as an intraday visit only, and reverted to a bearish trend. Could take months, weeks, days, or even a full year, but it will one day - do that, I feel for sure - whatever it goes on to do, afterwards.

But the truth is, closing below 200 is a heart-breaker. That's what goes in the history records. And casts a very, very, dark shadow on any beliefs that 200 is sacrosanct from now on. I feel this isn't the last we've seen of 200. I maintain as I sink beneath the waves, that loss of 200 is too clean. It is a strong support area. It will come back, however briefly.

So, what the hell next? Well first, IMO, there's the slimmest of chances that May 28th to June 6th (don't ask :) could provide the opportunity for the SP to behave bullishly. Secondly for longer term, and never felt comfortable musing aloud over potential support areas BELOW 200, as it felt like tempting fate, but 195 down to 190 has some serious properties of support, and I would expect at least short term anyway, it will act as a brake, however temporary or otherwise.

And If that goes? Well it's back on that long down trend road the SP has been on since the beginning of 2016. BT did actually leave that road for the better half of 2018 until the beginning of December. For myself I'm letting the trend be my friend in guidance - and for 3 years now it's been no friend of BT the SP.

BT the company, however, is an entirely different matter. One day 'value'-metric companies will step back into the frame.

After the first fright last Friday of that sharp intake of breath intraday low of 200.25p that registered as the brand new 12 month low up above, and displaced the old 201 low that had lasted a full 12 months into the history books, both Monday and today's close have satisfyingly continued to pull back a little back from that 200 edge.

However, annoyingly, today's intraday visit back to 200 itself at 200.55p still reminds that there's serious intent bears there in the woods, intent on the worst, and no way is BT out of serious danger.

And a quick check reveals that BT is still deep in oversold condition. Felt for sure it would like VOD have eased a bit, but not a bit of it. Still deep in oversold nastiness. So a little to go yet, before selling exhaustion settles in.

Whatever Monday and today, do hint of at least some comfort in both days closing a decent distance from 200.

And let's not forget the last three trading days didn't even close lower than 202's, despite frightening quick visits to peer at the 200 cliff edge.

If only that oversold condition had weakened today, you could draw some definite conclusions but it hasn't, so the fight is still on to keep stepping back from that cliff edge conclusively. No relaxing just yet.

Your welcome Jack, TL and et al. And thanks for the appreciative, kindly words.
Glad I did a comparison otherwise I was drifting towards a new and incorrect opinion.

My original intention has been to devote a small company strategy to the iWeb A/cc alone, but haven't used it much, rather than mix strategy's within the big SIPP A/cc with HL, which is primarily for big MCap hitters.

Although I have no qualms with HL, do keep at the forefront of your decision making that the minimum MONTHLY ongoing fee for HL in SIPP's is £16.99 per month, (capped @ £200 per year)

- and for ISA's, HL fees are capped at £45 per year. So not too bad for ISA's, but still pricier than most.

And of course an additional hefty £11.99 per trade transaction fee, which drops on a sliding scale if you are a heavy trader.

(Right down to business: Wait - going to use a second post to keep the figures from wandering across multiple post pages. The test results follow directly on from this post)......

Second run: (threw away first run as unfair delay to other brokers due to my clumsiness

iWeb for -
VOD prices @ 12:55pm

iWeb executed at 126.872p
No of shares = 3918
Amount £5000.69
-----------------------------------------

HL for -
VOD prices @ 12:55pm

HL executed at 126.872p
No of shares = 3912
Amount £5000.00
----------------------------------------

AJBell for -
VOD prices @ 12:55pm

AJBell executed at 126.872p
No of shares = 2345
Amount £2999.98 (only had £3.3k spare cash in the Bell acc)
--------------------------------------

So all three executed at the same stable price of 126.872p but both HL and AJBell get you less shares than iWeb if you can make allowances for Bell using smaller funds.

A clear win for iWeb on the second (and unfair first run - not shown).
(ALL brokers amazingly executed at the very same exact price, but iWeb wins due to more shares bought from their lower broker cost).
==========================

3rd run and I left AJBell left out of it as it has a smaller cash balance to spare, as well as my running out of screen time :)

iWeb for -
VOD prices @ 1:00pm

iWeb executed at 126.912p
No of shares = 3917
Amount £5001.00

HL for -
VOD prices @ 1:00pm

HL also executed at 126.912p
No of shares = 3911
Amount £5000.30

Once again both iWeb and HL executed at the exact same price but due to dearer cost by HL it's another win for iWeb with 6 shares MORE!

So egg on my face here. iWeb wins due to best /lower costs.

Busy for a bit now but leaving the screen dumps saved in my DTP if any queries on breakdown costs , but only saved the last test - iWeb and HL.

Well I am personally surprised at the results - a win for discount broker iWeb.

Made a complete mess of the first run, so re-ran it from scratch this time using a screen dump to allieviate writing down and was much speedier.

But even on the second and following third run I ran out of time yet again, just using screen dumps alone!

Again and it would be an unfair comparison to have them several seconds apart, so I removed IG as lost time realising all the IG funds was in the S/Bettng acc and nil in the old IG ISA. Then realised I had virtually no spare cash in AJBell as have been moving additional surplus funds over into IG.

But cobbled this together, to which I'm pretty happy about as decent enough. In all runs iWeb still came out top (still coming to terrmns with that).

The reason I had problems last time with iWeb was because I sold in the no-no time - before 8:30am. And I'm now prepared to accept all brokers will offer wonky prices to each other in that first half hour of opening.

So my initial comments about iWeb are unwarranted and now proven to be wholly unfounded. I look upon iWeb with renewed appraisal.

Right down to business: Wait - going to use a second post to keep the figures from wandering across multiple post pages. The test results follow directly on from this post.

Hee :) I reckon I do my best work around the bewitching hour.

He's been fired again.

He's gone to the place where all naughty posters go - into banned cyberspace - locked in a one dimensional triangle like the villains in that old Superman movie, gently rotating through space into eternity.

You know - Last Call aka Mark Williams. No trace of Mark Williams left.
Thought he'd gone sharply quiet, so just checked. Yep - His posts wiped. His cover blown.

I thought he was extremely well behaved this time round and only starting bursting out of his cover-body suit, a bit like the bug-man in Men In Black, fighting a losing battle to remain in a human disguise, towards his later posts.

But he's gone. All trace of his posts deleted. Mark Williams is no more. RIP.

I'm curious, did he get reported or did LSE find him, themselves - or did they read my post then checked up?

Anyway, back in this thread heading I posted:

*** Hi Last Call / Mark Williams. It's you isn't, LC?
Thought I recognised a sentence in there that rang a bell, and true enough scrolled back to last year and of course all your posts are deleted, but as chance would have it, I had back then, re-quoted your questions to me, in my reply post in some late night banter. And they match. So welcome back....... If you do get sussed out and shut down, I'll only then post how I found out, to keep you from making repeatable mistakes ***

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So true to my word, if your reading LC, here is a post of mine late at night from 23rd October 2018 when there was a bit of banter going on, you got curious and wanted to know a bit more of my background so revealed a bit of your history as a come-on taster - and it was that, that you re-posted into your intro post just last week that gave the game away. Here is the pertinent bit at the start of my reply to you from last year -

"Were you a trader/investor in 1997 velo? i wasnt until 2000"

And that was the bit that you revealed about yourself again last week, a trader first then later an investor, only this time you said 1996 but I only quoted a snippet but back then, enough to identify which question I was answering. And that was how you got nailed. Remember to cook up a new persona for each ID, not tell the same background stories for differing ID's. Tsk! I could never send you behind the lines in Russia with such poor preparation in a cover story.

Such fun. Time to turn in.

I'd personally like to see it close on 128 for confirmation tomorrow, but anywhere from 125p to 128p would still reflect the SP is turning bullish IMO. Your opinion may differ, as they say.

A thumbs up from me Daniel, for personal honesty.

What you thinking about today's performance then, eh? (Coupled with Friday's).

Only now getting a look in depth at the price action today - and IMO that's the best 2 day pattern since early March where it went from approx 131-ish up to mid 140's without stopping for breath.

Friday closed as a long legged Doji signalling indecision and possibly a change in direction. Today, Monday that was a damn good bullish confirmation, with the oversolds reducing dramatically and heading rapidly for the overhead exit door to sunlight

However, it is STILL in oversold condition, so I'm premature. I ALWAYS get premature on oversold exits.

Might be just a stray bullish day and disappoint, but initially I would expect at least some effort put in to the midway Keltner channel point of circa mid 130's and then see when there. If it's not to be , then just me firing off too early.

For clarity I am still holding to the view that the long term down trend is in force and still rules the roost, until proven otherwise, any rally needs to be taken with a pinch of salt.

So, first target over coming days is IMO achieving circa mid 130's. Do that and it's game-on.Then the fun really starts.
To be or not to be? That is the question, whether it is .......