Member Info for Velo

And . . . now it's October and a heads-up - a major trading update from BT is due in a couple of weeks - the H1 trading results are published at the end of this month on Thursday, October 29th.

An opportunity for BT to set the record straight v the analysts consensus forecasts - or not?

------------

Should be at least one other consensus forecast update before then (Oct 16th) but the latest just out today( an hour or so ago) shows zero changes, bar approx £6m increase to year 3 revenue and circa £2m/£3m added to net profit for year 3.

They've tweaked year 3 by virtually pennies, and nothing else than year 3 alone, so same-as, therefore can't be bothered posting a link as pointless with no dramatic changes that could affect sentiment, which is all I'm seeking in their updates.

Anyway, that's a first; releasing their consensus forecast update whilst the market's still trading. Usually they've waited until it closes for the weekend.

Well that's September done and dusted. You'd think I'd be satisfied the month closed as it's 'seasonal' 5 year history suggested it would - but it closed just a tad too perfectly.

September to end of December I have previously labelled as the kipper months, and that's just how September closed, despite a month high of 70p and an intraday-low visit to shake hands with 52p in that period.
The data suggested that September would close pretty much as it opened with a tiny 0.3% decline overall.

September 1st tallied up for that day at 63.8p
- and closed the month end at 63p
So a -1.2% decline. Much of a muchness then, 63's opening and closing.

And that's what I think I have previously posted for the year end - to close in the vicinity of 'circling back' to the Sept 1st area of circa the low 60's-ish.

Only thing is Sept confidence was only for 40% and that had climbed from 20% confidence at the start of the month.
So the % confidence was far greater for a close much different to anything that the data suggested which was for - 0.3% down.

Hence my 'a bit too perfect' for such a low confidence. Even now as the rolling 5 years click forward, the confidence remains at only 40% for next September, but has increased to a month ending for a 0.9% gain, suggesting that the month open and close are pretty much twins separated at birth, whatever the month opening SP is for September next year.

Anyway, now it's October so I will set some computer buys rather than duel on the day; but no rush, still have another 3 full months to choose from before "it's too late" to buy at low prices, as Jan and Feb are suggesting they will be similar to the 2 best months of the year for SLP (those were and are, July and August).
Second best are as mentioned Jan and February, with Sept to Dec being the least best performing months, seasonally-historically speaking.
Confidence for Jan and Feb is running at 80% (July/Aug was 100% confidence and is remaining so for next year).

(Oct confidence is only 50% and the data suggests a -3.2% decline from Oct 1st (So a preliminary close to October of circa 62p-ish) ie., low 60's once again, as is supposedly the case right through to Dec 31st.

But of course anything can happen during the intra-period in each month, but they have their orders by closing time at each month end :)

Hope no one is taking these historic 'seasonal' expectations too seriously. Especially if the other months hit the mark; which would be asking too much.

Anyway, July & Aug behaved beautifully,
- and right on cue Sept has performed a most boring kipper-like close as it was meant too,
- with the next 3 months to end the calendar year as they are supposed to - end boringly and make like a kipper! :)

Then it's man the (bullish) stations for the first 2 months of the new year!

A quick blast on the latest Analysts consensus forecast and I'm done..

https://www.bt.com/bt-plc/assets/documents/investors/financial-reporting-and-news/latest-consensus/bt-group-consensus-18-sep-2020.pdf

1) No change in bearish sentiment, with very little monetary adjustments compared to previous consensus updates, but what little there was, was downwards.

2) Revenue has at least stopped being indecipherable as previously they had:
year 1 = down, Year 2 = up, year 3 = down.

Now in this update it's clearer - years 1 to 3 revenue are all consecutively down, one after the other. So a clear pattern. Continuance of a declining revenue forecast for year after year, into the future.

3) Net Profit forecast, they have as the worst ever this year at £1.414bn.

However, the good news is they have all subsequent years as showing increases. So next year is showing as £1.607bn net profit and the 3rd year as £1.635bn net profit.

But even year 3 net profit is still below last year's net profit of £1.7bn!

So it's the long haul before a return back to £2bn net profit days of old. No quick turnaround forecast.

But that may not be the case for the SP. I'm expecting at some point the SP to climb ahead of BT actually producing an increase in revenue. All it will take is for the market to agree by consensus that one year in the near future will signal the floor and show - an increase in their forecasts!

Whatever, they have an utterly disastrous forecast for Q2's net profit coming up - the worst so far at only a derisory average of £290m net profit forecast.
Personally I think that's far too bearish (Q1 they forecast £300m+ odd yet BT came in with £448m which I thought was v commendable).

So in effect the market, via the analysts, is saying that after BT produced £448m net profit for the first 3 months they will only come in with £290m for Q2 thus making the H1 report to be published at Late Oct/early Nov only £738m????
Can't believe it!

Surely they must be in error?
Last year's H1 was £1.068bn for net profit
- now they're saying this year's H1 to only expect £738m?!?

I shall enjoy BT proving them wrong by this month's end, but will the market respond positively?
What happened to the traditional response of an uplift in the SP every time a company beats market expectations????

Bugger! Missed Tony's post. Could have saved myself endless typing and simply said:

Ditto - what he said
:)

(Page 2 of 2)

. . . It makes some "tax exempt funds" now to be regarded as profit, so should INCREASE net profit as it is a capital gain (leases) and therefore taxable where previously they were "hiding" it from the tax man.

Some of it has now gone into the net debt calculations, increasing net debt because it was never an asset, where in previous years it was omitted for tax reasons.

The CEO was "blaming" depreciation in Q1 for a reduction against Q1 last year of pre-tax profit due to an increase in the depreciation account - yet all funds in there are tax free so an increased depreciation account is a BONUS for FCFlow!

So, net profit being down as well, but depreciation being up - is still all profit - yet all told in summary the whole lot was less than last year as FCF had fallen to £1bn.

So no, IRFS does not put the £2nm net profit all back together again. No IFRS, and net profit would still be down this year. That's a result of a poor trading result.
- Revenue is unrelenting in it's retracing, that's the central issue, that is being overlooked for pension deficit/ net debt talk.

This new accounting malarkey doesn't whip money 100% away by the taxman. It makes things more upfront and transparent from potentially damaging misappropriation by "some" unscrupulous directors. The money is always there despite the moves. Yet everything was down in Q1 because of the cumulative effect of revenue being down, which I'll come to in the forecast update.

Ends.

(Page 1 of 2)

*** "I see mentions in posts of BT being a £2billion Net Profit company - no it isn't anymore! That's buried in history. And is nowhere forecast to be that for years and years to come."

Velo, when you state that, are you taking BT's projected £2 Billion annualised cost saving by 2025 into account? Would that not increase Net profit considerably? ***

----------------

Hee, Hi Fleccy :) I thought you would think I was referring to you as well; but I've noticed a few posters on here still saying £2bn even after the full year was in.

Bear in mind the cost savings don't always show up pound for pound down at the net profit; rather they can prevent net profit getting worse than expected (but currently net profit is still going to be worse than last year though).

The upcoming Q2 in isolation (H1 terminates in a fortnight so those results will be published in November; have heard they might publish on last day of October though) is forecasting net profit of gulp! only circa £290m! Contrast that to +/- circa £500m of yester-years. I think BT will come in a lot higher as they did in Q1 and got zero commendation for it. But we'll see in a month or so.

But you quote 2025.
One should at least expect no further serious deterioration in the net profit anyway, and hopefully further positive progress whatever amount it will be by that date, but that's too far out for a meaningful speculation, although I am speculating SP-wise the SP will by then (2025) show some decent progress.

------------------

" To add to my previous post, BT reported Normalised Free Cash Flow of £2 Billion in the 2019/20 figures, with Net Profit (Income) coming in at £1.734 Billion, but the 2019 results were based on the IAS 17 accounting standard, whereas the 2020 results were based on the IFRS 16 accounting standard. "

- Can't have your cake and eat it both ways Fleccy:)
The money is always there. It's just moved from one (tax free or shown as non-profit, ie., leases) account to another. Had a quote somewhere but too bushed (literally and horticulturally) but transparency is cited. It's protection for investors from perhaps some BOD's falling to temptation. Remember Tesco getting roasted and directors castigated for fiddling the figures on discounts moved from one year to another to make the accounts "look better"? The money was always there, they didn't steal it, it's just how you declare it.

Besides earlier this year, Free Cashflow was down from £1.7bn to just £1bn at one point which caused widespread concern in the market. It's been improved now. It was 'remedied' quite quickly that made me suspicious - and at the same time net profit was down! Now that's not right if you dislike this IFRS carry on.

Cont >>>

Will do a write up on it tomorrow (if time as getting ready to hit the road next week; disappearing for a week and a half) but nothing upbeat in the latest Consensus forecasts out this morning dated for Friday 18th Sept.

Here's the link in the meantime for your perusal:

https://www.bt.com/bt-plc/assets/documents/investors/financial-reporting-and-news/latest-consensus/bt-group-consensus-18-sep-2020.pdf

Small point that irks me:
I see mentions in posts of BT being a £2billion Net Profit company - no it isn't anymore! That's buried in history.
And is nowhere forecast to be that for years and years to come.

This current year is looking like £1.4 billion, one of the worst ever, but increasing every year afterwards but still only in the £1.6 billion area for years from now!

If you can't let go of talking of £2 billion net profit say so and I'll start including Pre-tax Profit which is much higher, but it's like saying who gets to keep their full salary with no tax deducted?

£1.4 billion - been posting it regularily but I keep seeing posts of £2 billion. That's yesteryear!
- Perhaps it's the media's fault with quotes abounding of £1.9billion profit during the bid talk, but that is not net!

The primary reason I take interest in the updates is to check if a change in sentiment is apparent by a general uplift in revenue and net profit. But none is forthcoming; in fact the full year's net profit is slightly worse, with revenue now in some sort of shape but sadly from top left to bottom right trajectory for 3 years.

So no jump in the SP on Monday as sentiment is still undesirably bearish towards BT.

Will write up more tomorrow, if I finish tree cutting round the back in time.

That's alright Stoodio. I hit the road next Tuesday so probably my last post for a week and a half after next Tuesday, so might as well finish off. (Can read, but will only be free late in evenings, but unlikely to post anything useful.).
----

First off, Long term trends are all good and that's all that matters - as everything below intermediate I regard as compromised until further notice.

Interesting side note -
The day's price action has closed on a very bullish candlestick and even if you don't read candlesticks the bare data is plain bullish, but taking out 66 from this morning and putting the pre-66 price in, and it's 100% different. NOT a bullish day, but between neutral and bearish. Hmmm.

All trends are bullishly up, so that's what I'm compelled to say.

Monday's intraday pivot points, not joyful looking, in fact they look tired to me and support the view that today's price action is not all it seems and are a bit 'neutral-ish'.

So, on the face of it, bullish going into Monday but won't be surprised at all if Monday turns out bearish.

Best to hold no firm opinions and just keep an open mind for Monday. Could go either way.

----------------------------------

SLP Currently -

Price to 200 day ma trend .= BULLISH!

Long term trends . . . . . . . . = BULLISH
Medium term trend . . . . . .= BULLISH
Intermediate trend . . . . . . = BULLISH
Short term trend . . . . . . . . = BULLISH
Ultra-short term trend . . . . = BULLISH

At last 69 close! Took your time LSE. It was showing 69 everywhere but 68.5 here. And on tonight's closing compromised data is a bullish close achieving the first intraday resistance level.

Prior to this it was always hopping over and sitting up in the next one. Got some stuff to do but will finally respond to Stoodio's request for the full week's perfomance later tonight.

" Velo, obviously in respect of the below one mans change and all that, so it's obviously subjective :) "

Appreciated, but I've been doing a lot of navel gazing over my own investing recently. And by focussing on safety first, I've moved too far away from risk.

----------------------

" and I'm intrigued to know what your computers tell you regarding this weeks action "

I reacted badly in the minutes 52 was on the screen, and the sudden drop to 66. A loss of control seeped through my psyche. Control is an illusion, but still I reacted badly to it. All accepted now, but it rankles. If price moves dramatically like that, then it should (later) be reflected in volume too. I accept the mantra that "price precedes volume". Many say no human judgement can match the uber powerful algo bots employed by the big companies - and that's true.

But I like to quietly boast I can see the effects of what they've been up to on the variety of longer term trend lines I deploy. And also through volume. Volume plays can be manipulated but the beasts of the investing world are highly visible in volume.

I also use a little metric known as the "accumulation/distribution" metric which measures volume but doesn't resemble traditional volume's up's and down's.

I've always found it tells the 'truth' for that particular job in isolation. The original specialist designer gurus even claim it can be predictive, 'appearing' to pick up, off book movements yet to be registered. I've often seen it soar skywards on a poorly performing SP for days, week/s even, and I'm thinking tsk! Piece of rubbish - only for that stock's SP to unaccountably shoot up several days later, with no results or major news.

And all through 52 and 66 it kept on rising, suggesting volume was being accumulated somewhere. So was the sudden screen 52 and 66 something new that outwitted that metric? Or was that metric being truthful and volume was increasing despite 52 and 66 saying "Ha, ha, you've lost it mate"?

Suggesting that something we are unaware of, is going on behind the scenes, judging by today's bullish performance, which based on the compromised data was showing as another achievement in cracking another intraday resistance, but is coming off that and looking like entering the neutral area . The long term trends can not and never will be denied, they regard this as mere noise as all trends are pointing northwards Ho! and match the balance sheet fundamentals beautifully,

Don't think tonight's close will be any use to you, as that 66 is in the system and has compromised the lot. Monday's close will be a different kettle of fish, because 66 will be bled out, but I need each day's open to get any traction and the highly dubious 66 is showing as this morning's open as well as last night's close!

Is it manipulation to 'blind' all attempts at tea leaf reading by fking them up? Is that how good the operators of these algo/bots are getting? I'm not having it that they were b

Thanks for replying Stoodio. Interesting.

" SLP is my largest holding by a country mile and ..."
------------------------------

Stoodio - as this is a public forum please don't mention actual amounts or £££'s & pence etc., but may I ask you:

- Is it your largest holding because you initially invested a modest amount that has since grown exponentially over the years to its current valuation or did you invest a seriously substantial amount in the first place?

I ask, because accumulatively, by this year end I intend this stock to become my largest holding by two country miles :)
- but it won't all be from profitable exponential growth, but large infusions of funds, not enough to cause me sleepless nights, but a decent enough slab of funds.

Don't reply if you feel uncomfortable with my question, as we now know for a fact that there's people we never dreamed would have, who read our posts.

" Hi Velo, absolutely amigo was all a load or rather bizarre rubbish! Or was it? No idea honestly but hopefully a finish above 70p is in order! "

Hi Stoodio,

There's "damage" everywhere due to that 66 closing mid price.

My chart platforms are showing a % rise from 66 to the current price now - as they all are on various sites around the world.

And some sites that I check to see if they are similar to some of my personal assessments (USA based sites) are still showing 66 this morning.

I am NOT convinced it was a mere glitch. Nor am I convinced the results day intraday flash-crash low of 52 was a glitch either.

I DO however, believe they are connected. This is AIM the home of such notorious goings on.

On the other hand, they do add to my assertion of a lacklustre performance of these upcoming autumn month-endings that may somehow, materialise out of nowhere at the 11th hour.

We're all entitled to the odd conspiracy theory here and there. It keeps you sane in inexplicable situations :)

" Bangrak, words are hollow on boards, but if you're referring to me in your post, as much as I'd like to be able to, I'm not a trader whatsoever "
-------------------------

Hee hee Stoodio, I bet there was a dozen or so posters also thinking the same:
Does he mean me?
I thought he was aiming at me too; so thanks for taking the hit :)

In fact, I bet it's easier to count the posters who knew for sure he didn't mean them.

And who's saying the original poster is any more accurate than anyone else in assessing situations?

Anyway, some way to go before you match one of my accusers -

I was once accused of being nothing more than the frontman for a multi billion hedge fund operating out of New York. I was going to reply, but he had his compelling "evidence" so let the accusation lie there, as everyone is entitled to their opinions :) :) :)

Besides there's bad - and then there's real bad. What would you prefer to be accused of: a two-bit criminal, or a matermind criminal straddling the underworld?

I rather fancied being called the frontman of a multi billion dollar hedge fund. My accuser who was serious, must at least have seen potential in me LOL!

Yeah I could do that job - if I wanted, it's just that I'm too busy, but I could yeah, run a hedge fund!

(Head supported in hand whilst off daydreaming for 5 minutes)

The margin % pread is creeping up once again. Almost 3% !

Well what a carry on!

Was seeing 66 from my usual sources whilst others were posting the correct situation on here. Confused I did a brokers dummy price entry (no mid prices with HL) and they showed the 69/70 split. So went racing back to my price only sources and now they too were in synch with all mention if 66 as a mid price gone!

Think the whole thing has messed up my spreadsheets etc., so tonight's close may well get things back on track.

All still good. The SP is still in the game for taking the 200 day trend.

It's just that the SP is the lead in a three act Hollywood Rom Com.

You know, they're all the same -

Act 1: Boy meets girl.
Act 2: Boy loses girl.
Act 3: Boys wins girl back.

Act one was SP meeting the girl, the 200 day trend, and dated her for 2 days or so, before
- Act 2 - he lost her!

He's still in act 2 as of tonight, but is getting ready to race to the airport before he loses her forever and is searching for an unattended battery powered baggage trolly and race off down the runway after the girl (you can do that in Rom Coms) the type of baggage trolley that is always left unattended and capable of matching the jet's 150mph take off speed, with the boy up the hydraulic ladder that these baggage trollies have.

Will our SP get to the airport in time? Or will he get rejected by 200 all over again?

Adverts first, then we'll see tomorrow whether it's on to act 3, or more of act 2 continuing.

Checked and checked - it's 66 everywhere - showing the day's close as 66p.
And everywhere is showing that 69/70, bid/ask spread too!
Whatever; it's a done deal as 66 it is, as it's showing as the day's low too. No escaping the fact now.

Wasn't expecting these shenanigans for another week+ yet.

That 66 is going to produce some warning shots for tomorrow's figures and change the landscape somewhat. Just what is it about SLP's (always excellent) results month, that compels holders to sell up - every year?!?

Something's frightened the begeezus out of the MM's though, as they've responded immediately and dropped the ludicrous margin SP spread - in a heatrbeat -back to 'reasonable' and gone is that stupidly massive 4%++ rip-off premium.
Did they cause this? If so it's blown up in their face.

Here's what I'm NOT wanting to see tomorrow - Entirely probable that the SP could head for first intraday support base of 64.

Safety by day's end IMO is closing on 68, as a minimum, the neutral area.

- However, if the day is worse than 64, then the next worry point is only 1p lower at 63.

But after that, I prefer not to say at this stage; as what is being thrown up on my screen just wouldn't sound credible to anyone. It's that damned 66! It's sending everything haywire.

I should have used a titanium-tipped lance at the jousting tournament, and thus that 66 would have remained under lock and key - now it's escaped and gone all pandemic.

I'm now going to set a computer order limit buy, at a ludicrously low amount in case this wildness gets repeated and sprung again first thing, like they did with the 52p results day low.

I just knew that 52 was ominous. Things like that don't just happen in isolation.

HighandDry - On the contrary - it does make a difference (when in the "wrong" stock). Should be okay with SLP though as you say.

Was going to pick up on that huge marigin (4.8% last night I think) but my post too long as was.

That 4.odd%, up above is outrageous!

I've been lucky when topping up at lows to bring my buying-in price down as always a v low martgin spread and therein lies the clue. When the price is doing the opposite and climbing noticeably the high margin in the spread raises its head.

Here's a copy'paste' that explains what's going on as I always thought it was to do with lack of liquidity, but checked the free float months and years apart to compare the free float and was surprised that the free float actually increased.

Here's the quote from Investopedia:

" Volatility and Bid-Ask Spread.
Another important aspect that affects the bid-ask spread is volatility. Volatility usually increases during periods of rapid market decline or advancement. At these times, the bid-ask spread is much wider because market makers want to take advantage of—and profit from—it. When securities are increasing in value, investors are willing to pay more, giving market makers the opportunity to charge higher premiums. When volatility is low, and uncertainty and risk are at a minimum, the bid-ask spread is narrow. "
--------------------

IMO if the SP closes on 67 that would be the day's first intraday support achieved, and bad news really. Not expecting that, but if it did, watch the margin spread drop back down, should no one take advantage of the retracing SP, something I'm already on record as saying that's exactly what I intend doing (several-fold) right up to the year end.

Does ShaunP still post here?

Be very interested in his evaluation of earnings per share and thus derive the P/E ratio when ameliorated for the full 12 months.
Don't trust myself to calculate earnings per hare accurately in these first few hours.

Only when the P/E ratio is to hand do you have a speculation-free, reported ompany data actual true assement of how undervalued or not the Company's SP is. That will be the kicker :)