numberbiter
04 Dec 2016
Re: Didn't see this coming.... Buy backs never work in shareholders' favour; they are initiated by management for their own benefit. What happens is that the 'market' increases the price of the share so that it is never undervalued. The EPS also increases slightly (same earnings, less shares) also keeping the share price high. Management therefore collect their bonuses, but when the buyback is over the share price goes down again.As a shareholder, I would prefer dividends.
shovelier
03 Dec 2016
Re: Didn't see this coming.... Or fewer even.
MaxValue
03 Dec 2016
Re: Didn't see this coming.... Look back through the RNS.They are saying the total shareholder return per share will now be re-characterised as an absolute return per year - to me this means the total return per year will stay the same.Ok lets consider an example of how this could work:Say we have 100 shares in issue and the return is £2 per share per year. That means the absolute value of the return is £200 per year.Now if in year 1 they buy back 10 shares @ £3 per share the return that year will fall by 10*£3 = £30. So the remaining 90 shares will each receive £170/90 = £1.89 instead of £2But if in year 2 they don't buy back any shares that years return will be £200/90 = £2.22 per share.So every year after a buy back year the dividend will go up as there will be less shares in issue but the return will stay the same in absolute terms.Thats how I read it.IMHO, DYORMV
Boyobach
03 Dec 2016
Re: Didn't see this coming.... DS: 'The cash value of the dividend will go down to pay for the buyback. Overall it will be cash neutral.'Yes, that would be how I would see it. At present, the divi per share = £2, a share currently costs about 14x that and the yield is therefore around 7%. buying shares the company would effectively be seeking to strengthen the sp whilst simultaneously reducing the amount available for divi per share. This will regulate the yield to an appropriate level, as deemed by the company. The company is effectively saying the divi is too high at the current SP so, unless this corrects itself, we'll make the adjustment by means of diverting divi cash to buyback. This is not so good if your main interest is the cash divi per share because, if I'm correct, for every share bought back the divi pool is reduced by 14-1 = 13 shares worth of divi..dyor
Damp Seaweed
03 Dec 2016
Re: Didn't see this coming.... MaxValue,The cash value of the dividend will go down to pay for the buyback.Overall it will be cash neutral.Whether we see an improved 'Total Shareholder Return' remains to be seen
MaxValue
02 Dec 2016
Re: Didn't see this coming.... Did anyone note the change to how shareholder returns are to be re-characterised - from per share to abolute value per annum?I read this to mean that the total dividend amount will stay the same each year even though shares may have been bought by the company - this in turn means the dividend will go up as the total will be shared among less shares in issue.Sounds good to me.imho, dyorMV
Rhigos
02 Dec 2016
Re: Didn't see this coming.... PIE-EATER, "But is NXT the exception or the rule?"Fair question, I would say an exception.I myself in general do not like share buybacks particularly by resource companies when commodity prices high, flushed with cash and SP near highs. Even worse is when they decide to borrow and go on acquisition trail when prices high or expand production too much. In all those cases returning cash as special dividends much better for shareholders.
Eadwig
02 Dec 2016
Re: BKG results DS, "Quite a break out !"Yeah, I thought I'd missed the peak when I sold this morning, could have grabbed another quid a share. Looking at the rest of the FTSE it seems like people are moving money out of just about anywhere else to put it here!Looks like a lot of people running for cover over the weekend ahead of these European votes coming up on Sunday.Should have put a target and stop loss on - hindsight eh?
PIE-EATER
02 Dec 2016
Re: BKG results Like you, I have taken advantage of this rise to reduce my house builders exposure a little.PE
Damp Seaweed
02 Dec 2016
Re: BKG results I had been expecting the ex divi to be next week. Also the buyback will not be agreed until next year now. Plenty of time for more volatility.So in the spirit of indecision and opportunism I've sold half my stake @2666p.========== Sold the other half @2755p. Quite a break out !Only left with a couple in a misc. account that I can't be bothered to sell.
Eadwig
02 Dec 2016
Re: Didn't see this coming.... DS, "I'd forgotten about HSBC, because I'm wasn't a shareholder. But I think that one seems to be working OK ? "Yes it catapulted the sp upwards, but it is now falling back as people wonder what will happen when the steroids are removed at the end of the month. If you didn't sell out around @640p or a little above you may well be left looking at the sp before the buyback, which was about @514p at the beginning of August on the first day of the buyback.Fortunately for me, it allowed me to largely exit a very large position that had been underwater a long time. So, I count that as the one buyback I have known that has worked for me personally. (Next I bought at the wrong time, so haven't had the benefits Rhigos speaks of - I'm not aware of another FTSE 100 buyback that anyone speaks favourably of).
Eagerbeaver66
02 Dec 2016
Re: Didn't see this coming.... Rarely been a fan of buy-backs myself, but I can see the sense in this, to nudge the share price back into the 3000's where the fundamentals really justify (notwithstanding general weakness currently across the property sector shares).However even better than that, I think they have just talked the share price up so that they don't even need to buy-back any shares and can still pay the dividend. - I would have to complement the management on that one, a stroke of genius!
Prezza
02 Dec 2016
Re: Didn't see this coming.... Reckon the sharebuyback has a lot to do with the Board fed up with the sp being the target of systemic shorters , this has become a Friday afternoon plaything , the buy back funds allow them to ward off the evil spirits and allow the fundamentals to drive the price rather than the dark arts. Refreshing news from a great company , forget the lower tkeups it comes froma very high figure when comparing with last year pre-brexit.
Damp Seaweed
02 Dec 2016
Re: Didn't see this coming.... I'd forgotten about HSBC, because I'm wasn't a shareholder. But I think that one seems to be working OK ?
Eadwig
02 Dec 2016
Re: Didn't see this coming.... Pie Eater,NXT is very much the exception, especially on the London stock exchange and not worked very well while I've been a share holder.... of course, no one can say where the share price would be without it, which is another of the reasons I don't like buybacks. Even failures can be argued to have been successes.
