Menu
Close

LLOY - Share buyback 2019

lse:lloy

#162

Hi All, Well Lloyds down ~1.6% today to 62.5x which doesn’t seem to have sparked much comment here, considering it was 66.x on 17/4 that’s quite a drop. Perhaps it’s the return of MPs to parliament and people’s thoughts turning to brexit again ?. The £ had a very good day today up for getting close to 1% against the USD and AUD, didn’t make for a very good day for the FTSE, but could have been worse.

Yes Apple had a good set of results again, a few worrying points (China business way down) but the market clearly liked it and shares jumped after hours. Can’t get excited by a 5% dividend rise myself though when the dividend is currently only 1.7%. And these US tech stocks are SO fickle seems to me, look at google down a mere 7.5% today and TSLA which got hammered after its Q1 results. That plus the ~1% fall in USD against the GBP wouldn’t make for a great day for UK investors in those US tech stocks. Quite gory in fact, a bit like Game Of Thrones Series 8 Episode 3 which I watched this evening. Definitely need your OLED TV to watch this as the picture was really really dark virtually the whole time.

Well just gone 23:00 now and I see that IG has the FTSE up ~0.38% and STOXX 50 up ~0.48% ATM. Not sure why as US stock futures are actually down a bit, despite the Apple results.

ATB

Pref


#163

@PrefInvestor1,

It is annoying/discouraging that LLOY has been dropping of late, however, everything is relative. So far this year LLOY has been outperforming the other Banks. One could say that LLOY had just got a little too far ahead of itself. The FTSSE does not appear to want to go anywhere at the moment.


I know one can select a different start date and get a completely different picture, and LLOY is still the second worst (of those being compared) performer since the date of the EU referendum.


#164

RNS this morning

Stating we over capitalised and Lloyds will be returning more capital to shareholders this year :slight_smile:


#165

I like the Regardless philosophical way of looking at this, with LLOY shares so cheap we are getting a great deal from the buyback at current prices. And we can be content that there will be long term modest but sustained enhancement to dividends as shares are progressively cancelled.

It nevertheless remains disappointing that we the shareholders do not seem to be getting a return via the share price from using all this “spare” capital on a buyback, fully expecting there to be more to come the prospect of a further £1B signalled by the RNS referred to by Regardless above.

At some point the sp will have to rise, and I remain alert to adding to my long term holding at a come-get-me price if one crops up in the next couple of years. I have around 56p in mind, what chances of that though?


#166

Apple’s results seemed more like a sigh of relief to me, rather than an earth shattering return to growth.
Strange how you can celebrate a 22% decline in one quarter compared to a 27% decline the previous quarter in one’s biggest growth market.

Apple was almost 3% of my portfolio and it’s served me very well, despite not being an iPhone user lol !
Over the couple of years it’s returned 128%, but I’ve reduced my holding to now 1% of my portfolio given the continued decline of iPhone volume sales.
I’m a little sceptical on the services side, and while the numbers are laudable, are they really sustainable if you don’t err - use an iPhone anymore?
Apple watches seem popular, iTunes (can it survive Spotify, Amazon etc), and the Apple TV – can a streaming service work in such a massively crowded market with Netlix, Amazon, Hulu, Disney, Sky, BT bla bla bla!!

The proceeds went into Facebook – so far it was the right move, but this is over a relatively short period, only time will tell.

As far as Lloyds is concerned – ooohps back on topic – I haven’t the foggiest idea how to value it, I’m here because I’m a fool hoping for a decent return without understanding why – makes me laugh, hopefully not all my investments are that clouded over !!

I’m hoping Bowman can keep giving me confidence I’m in this for the good of my wealth and not at the detriment to my health.

Games – Onward and upward as they say.


#167

I am unsure I can oblige. I made an assessment of a potential rise in sp on another thread, with a conclusion that we are unlikely to see a level much higher than 70p this year.

A lot does depend on how well the underlying business manages to perform and the level of provisions needed. Each of these aspects also depends significantly on the outcome of political turmoil we find ourselve in at the moment. It is difficult to see any positive outcome and we are stuck with a set of poor outcomes. One’s view on each of these will be coloured by one’s political allegiance (and how much one is prepared to stick to them) and I am not going to get into a discussion of which of the possibilities are the worst or least bad. One has to make one’s own judgment of potential outcomes.

I also suspect that we are more likely to see an increase in the buyback cash rather than a significant increase in the dividend. The buyback will probably result in a marginal or negligible effect on the actual dividend we receive, since probably the buyback will only be slightly larger than the new share issuance.

If I look at the recent final dividend of 2.14p, and take the reduction in the number of shares achieved to date into account, this dividend would be increased by all of 0.0155p (0.71%). This is, for all intents and purposes, an insignificant amount, especially when placed against the recent movements in the sp.


#168

The Brokers have decided to reduce the amount they spent today as you see below


The price paid ticked up slightly today and the average paid now stands at 63.74p, slightly above todays closing price of 63.6p. The proportion of the buyback cash used is similar to what was spend over the same portion of the 2018 buyback.

The data in the 30th April TVR RNS indicated that a further 28m new shares were issued in April, negating some of the effect of the buyback.


#169

Hi @bowman, Yes LLOY has done very well YTD up from just under 50 to 66.x at one point, thats an increase of over 30% which is amazing. Of course many investors had bought at much higher levels and so have just been regaining what they lost, but anyone who deployed new money when they were sub 50 has done really well.

Personally I think long term that LLOY will likely do well, the end of PPI should help. But the stock is very brexit sensitive and that may still cause it some pain. Todays capital announcement via RNS also sounded positive.

I am not invested here having foreswarn buying any more single stocks EVER, only REITs, ITs and ETFs for me from hereon in. I have retained a limited selection of single stocks (BP, RDSB, GSK, HSBA, AV & LGEN) and thats it I wont be buying any more. I still read the board though…

Wishing you all the best with this and any other investments !.

ATB

Pref


#170

Hi Games, Well I wouldn’t be without my iPhone or my iPads (I have 2, handy when the grandkids come round). Bad new for Apple is I can see no obvious reason to upgrade my phone at least until 5G comes out here ( at least 18 months to 2 years away I reckon). I got the battery replaced when they did their cheap battery replacement scheme and I think I’m well set for a while now. Many others will likely be thinking the same, except the people who absolutely MUST have the latest and greatest model.

What do you use for a phone / tablet then ?. Are you an android lover ?. For tablets many are looking at Amazon Fire tablets which I know are cheap, but then you get what you pay for I reckon…

Down day on the markets today. Took the opportunity to spend my dividend money, spent it half each on AAIF (Asian IT 4.2% yield) and IUKD (UK equity ETF 6.x% yield). Both topups.

ATB

Pref


#171

Pref - Moto G5 and a Lenovo Laptop, 3rd one which always seem bullet proof. I had an iPhone some years back and didn’t really see the point, as it was quite slow, limited battery life and relatively simplistic interface. I also didn’t see the need to pay 3 times what I did for a phone which had a higher equivalent spec. I also tend not to pay for Apps so I was not a good customer for the AppStore or iTunes which tends to lock your content up in knots, and it’s difficult to move it from device to device. There was also no interface reason for me to link it up because I have a Windows machine. Being a Microsoft investor and user for 15 years I see no need to move away from it’s platform, office software and cloud solutions.

I bought Apple at the $90 level as it seemed ridiculously oversold, but having sold over a half of it at a 128% gain, the rest I hold isn’t the bargain it was, especially considering they have suffered a 30% decline in iPhone sales in one year. I also own Skyworks which is a chip supplier to Apple + others and they report earnings after close tonight so fingers are crossed.

A friend of mine has a similar set up to you, iPhone/Ipad etc and he said to me that each new upgrade has introduced a plethora of software bugs, things he never witnessed when Jobs was in charge. I don’t know how serious they are, and it may not matter in the grand scheme of things but it’s not a good sign.

Games


#172

Hi @Gamesinvestor1, Well I am a long time Windows/Office user as well and I confess that I find the user interface on the Apple devices a bit strange at times. However the games are cheap (and critically are the same as the grandkids have at home) but we also have an xBox for more sophisticated gaming.

I can also access the web with the same browser and bookmarks on all platforms, use Office, share files and access my calendar between my PCs/iPads/iPhone. And I haven’t encountered many bugs at all really, but then my usage tends to be tightly limited to the above. Also I find the iPad convenient for browsing and playing games while in bed – but I guess a laptop would be just as good for that.

I have no doubt that there are many other ways to do the things I do, but I am happy with my solution and feel no pressing need to change. I have had the iPhone for several years now and its still fast enough, hey when your browsing its only your internet speed that really matters anyway. Similarly my iPads are at least 2 years old, one considerably more than that and I cant remember when I bought that. As I said I think the arrival of 5G will likely be the trigger for my next purchase.

I am sure that your solution is just fine too. I’m sure if it didn’t do all the things you need then you’d pretty soon change !.

ATB

Pref


#173

Could we be looking at low 68bn shares in issue assuming an average buy back price of say 63p (using the FT’s 70.83bn shares outstanding)?


#174

The average price paid to date is 63.69p. There is a further £1.375bn left in the buyback pot, which would equate to 2.159bn shares assuming the average price paid so far is maintained. This would reduce the shares in issue to 68.644bn, assuming that no new shares are issued.

In the 2018 buyback, 1.577bn shares were bought back over 113 trading days, however over the same period a further 623m new shares were issued. If the 2019 buyback takes the same length of time, and a similar number of new shares are issued, then the total number of shares in issue will be reduced to 69.267bn shares. As far as I can see so far in the 2019 buyback 41.5m new shares have been issued over 44 trading days, but the new shares are not issued at a constant rate so these data are not a reliable indicator of the rate of issuance.

Consequently it looks unlikely we will get to the low 68bn level, unless the sp collapses (to about 49p) to allow more shares to be purchased, and so it is more likely to be in the low 69bn area. The difference between 98bn and 69bn is only about 1.4% so not really a great difference.

The current level of shares in issue was last achieved back in early 2013. 69bn would take us back to 2012


#175

Loads bought today below 63p :slight_smile:


#176

Unfortunately they are maintaining a relatively flat buyback level at the moment, so no sign of using the decreased price to ramp up purchases. Today was the fourth day at 13m shares (£8.3m), during which time the sp has dropped from 63.6p to 61.8p.


LLOYDS is going to FLY
#177

What on earth … rns this morning saying LLOY are issuing 545 million new shares tomorrow to pay into bonus schemes etc.

Kind of makes a mockery of our anticipating a sp or dividend benefit from the buy back programme, and makes it a lie that the buy back is in some way returning capital to shareholders. They are just laundering.

I know Bowman has warned us that the buy back gets diluted by new issues but this is utterly ridiculous.


#178

Quite right.

So far the buyback has removed 615.8m shares, but 586.5m new shares have been issued since the start of the buyback, making a net reduction of 29.3m.

Without the buyback the bonus shares would have increased the number of shares in issue and therefore diluted all existing holdings. The bonus shares could have been purchased in the market and then given to the recipients, but this would have involved the expenditure of a lot of money; just as we have from the buyback - so not a great difference.

Remember that 623m new shares were issued during the previous (2018) buyback. Also the majority of the increase in the number of shares in issue between 2010 and 2018 was the result of bonus share issues, but there was no corresponding buyback during the same period to compensate.

The current share purchases are being touted as a buyback, but a large proportion is just the payment of bonuses.

The current status, taking the new issuance into account, makes us on target to achieve a final number of shares in issue of 69.2bn by mid-August 2019.


#179

The Buyback is just a front, those stupid enough to fall for it should read the rns releases.


#180

It has to be said that banking bonuses are excessive and a drain on shareholder wealth. The whole system is corrupt when those charged with setting targets and rewards also have their snouts in the trough and so defend the system.

Frog in a tree


#181

Why are lloyds paying Shares Bonuses when the share price is lower than it was 10 years ago add in 2009 we was in a recession , with a banking credit crisis and share price still not recovered back to only a £1 since then

18 months after PPI expiry date and if we still rubbish share price going give my shares to charity :slight_smile: