|Maybe because, welcome though it is, those of us holding for more than a year have just clawed our way back to where we started from!|
|Not much comment on BBA considering it's 100%+ increase in the past year.|
|Nice steady increase since Febuary|
|Hearing rumours BBA have sold ASIG to Menzies Aviation, Signature flight support hasn't been sold..|
|I'm disappointed to see this slip back below 200p this afternoon. I would have thought worries about airport bombs would encourage use of private jets using smaller airports, Also the launch of JetSmarter (the business jet equivalnt of Uber?) should be good for BBA, IMHO. Must do some more research|
|Yep frightened investors I suppose. Yield is great at 5.8 if this site is to be believed.|
|Well, no, I imagine that "geopolitical tensions" in the form of blowing airliners out of the sky etc might impact on the aviation support business, but -8% in one day? Something spooked them.|
|no idea, I would have thought the geopolitical tensions would be good for BBA
|Ouch! What's that all about?|
|Ooops! My mistake. They go 'ex-Rights' on 12 October (not 7/10 as stated above, which is the Record Date), so when you log on in a panic on Monday asking "Why has it gone down?", that's the reason and you will find your account credited with the appropriate number of Nil Paid Rights shares.|
|Whilst killieboy is absolutely right at the 'macro' level, I suspect that Boneshaker is more interested in the actual effect on his shares, rather than his % holding in the company (which, like most PI's, is probably tiny anyway so dilution not that relevant).
The deal on offer is the right to buy 6 new shares at 133p for every 5 currently held. When they go 'ex-Rights' on 7 October, Bones will find that the value of his existing shares go down, but he will be credited with new 'Nil Paid Rights' shares which also have a value, and which he can trade on the market if he wishes. He can then either opt to buy those shares at the Rights price, or let the option lapse and he will receive whatever premium value they stand at. The thing to understand is that, if he opts not to take up his Rights, he will receive an immediate 'profit' from the sale of those shares, but his retained (original) shares are likely to be at a lower value than before, will represent a smaller % of the company overall (as said above) and are also likely to pay a lower dividend per share.
"The BBA Aviation Board intends to continue with its progressive dividend policy. In the absence
of unforeseen circumstances, the BBA Aviation Board intends to recommend a final dividend for
the year ending 31 December 2015 (for which the New Ordinary Shares will rank) grown in line
with the 2015 interim dividend, but adjusted for the bonus element of the Rights Issue."|
|Killieboy thanks for your explanation,few worried people at work and I don't have enough knowledge to advise.|
|Boneshaker - if you do not take up your rights your % holding in the company will be reduced by 55%, if you pay up and take all your rights your % holding will stay the same.|
|Apart from my personal holding I'm in the BBA share save scheme via one of the BBA group of company's. Could someone enlighten me as to what effect this rights issue/dilution will have on the current share price and the sceme?|
|Not 23 Jul - latest ed. Browsing in WH Smith while waiting for Mrs - Chronic Investor does not rate this lot and says to stay well away from rights. I am long term holder (for my sins) and am as yet undecided.|
|Could there be a stronger signal?!
Edit: Not an IC subscriber but have some access via Hargreaves Lansdown. Are you talking about the IC comment on 23 July? Chalk and cheese, non?|
|Investors Chronicle does not like it - sell rec!|
|Seems very few people follow this company - no comments despite yesterday´s news of a transformational deal and a deeply discounted and dilutive Rights Issue (6 new shares @ 133p for every 5 existing). Market seems to like it, though.|
|Well somebody likes buybacks! This from Citywire -
"Bill Gates has ramped up his holding in flight services company BBA Aviation (BBA) as the business continues an aggressive schedule of share buybacks.
Gates upped his holdings in the company from 40.2 million shares to 46.1 million or 9.8% worth £147.6 million at a share price of 318p, up 44% over the last three years. Shares are currently trading at 311.9p.
The holding is split between Gates' charitable Bill & Melinda Gates Foundation and Cascade Investments, the business he established to manage his fortune, estimated at around $61 billion.
Day to day management of the company is handled by renowned value investor Michael Larson. BBA has been widely tipped by managers such as Citywire AAA-rated Nigel Thomas of AXA Framlington.
Societe Generale initiated coverage of BBA at the end of June with a 360p price target and a buy rating. Jeffries has a target of 375p, also rated buy. The company has since April purchased around £25 million of its own stock as part of a planned £80 million buyback programme."
|Thanks jeffian now much more aware and do agree with your viewpoint.|
|It's almost standard now for companies to have the authority to buy back their own shares, subject to a limit (usually 10/15%) and there are times when this clearly makes sense (e.g. when the share price goes below the NAV/share) but, as the Enterprise Inns' example shows, many of them exercise it when their shares are trading at a premium, not when they are distressed! As with most resolutions at AGM's these tend to get voted through on the nod (I voted against the ETI one - I think I was outvoted by about 550m shares!). Institutions tend to like them because they believe the line that massaging the EPS upwards will be reflected in a growing share price but as there is no direct connection between the money spent and the resultant share price - it requires the market to achieve that and, as we all know, markets are imperfect - I would rather have the cash and know where I am. One day, when I have time, I must do some analysis across a range of companies who have been prolific buy-backers and see how their shares have performed vs. money spent.|
|jeffian many thanks for that enlightening response.
It does say in the RNS that they were bought with the "authority" of the shareholders at the last AGM (13) Does that imply that its of more benefit to some than others? as per your response, and institutions, or apathy by shareholders when it comes to voting at AGMs.|
|Theoretically, but personally I hate buybacks. The argument is that, by buying back shares and reducing the number in issue (the treasury shares will eventually be cancelled), earnings per share and NAV are correspondingly increased and that this will then be reflected in a higher share price. It's sometimes referred to as a way of 'returning capital to shareholders', but of course it's nothing of the kind - all the capital gets given to those who sell and those remaining have to hope theirs will go up correspondingly! Unfortunately, managers cannot dictate the value of their own shares and the market has a way making up its own mind. (In)famously, Enterprise Inns spent nearly £1bn(!) buying back its own shares at up to nearly £8/share before the 2007/8 crash when they went down to....26p.
Personally, I feel very strongly that if a company has 'surplus cash' it wishes to return to shareholders, it should do it via dividends or a capital distribution to all shareholders and they can decide what to do with their own money. Cynics might say that, as most management 'incentive plans' are based on increases in earnings or NAV, executives may be influenced by self-interest in favouring schemes which artificially boost those, but I couldn't possibly comment on that.|
|Can anyone explain the significance of a company buying back its own shares and holding them in treasury, as BBA have done. Does this have any effect on SP?|
|Almost 2 million BBA Aviation shares traded today, over 4x the average. I call that Unusual Volume. Check the entire list at bit.ly/1eRVCwK|