Phoenix Share Discussion Threads

[edmundshaw] 28/9/2016 09:49

Close enough to my own calculation of 730p, jonwig. The difference would come from a slightly different pre-issue price.

[rcturner2] 28/9/2016 09:46

Yes, that makes sense.

[jonwig] 28/9/2016 09:39

My reading of the dividend is, from the introduction:

"Acquisition will support a proposed increase in dividends in respect of 2017 to £197 million ..."

There are currently 248.08m shares in issue, so there will be 392.8m post-rights. This suggests dividends for 2017 of 50.15p.

XR share price ~733p, so forward yield 6.8%.

[edmundshaw] 28/9/2016 09:35

Note 2 is quite plain, sadly. "Stated after adjusting the 2015 dividend per share for the bonus element of the Rights Issue" means exactly that the dividend yield will be up 5% but the dividend itself will actually fall.

[bluemango] 28/9/2016 09:34

It is actually stated in the release as a (further) "5% increase in dividend per share"

[rcturner2] 28/9/2016 09:32

I must admit I took it that the dividend would be per share, otherwise what is the point of them talking about a 10% increase?

I do accept I could be wrong though, as others have posted it has happened at other companies.

[bluemango] 28/9/2016 09:30

I don't thinks Pimsin's scenario above could be right, they won't be decreasing the dividend per share, even with more issued. Ignoring the rights issue, it comes out at 0.588 annually (0.294 half yearly). Early clarification on the actual amount would be useful.

[jonwig] 28/9/2016 09:28

A couple of thoughts:

It's striking how accurately they can seemingly predict future cashflows and dividends from zombie funds, and yet the share price of PHNX has been very volatile over the years!

Part of a desperate fire sale by Deutsche Bank, hence the bargain price.

RCT2 - yes, another way to avoid dilution.

[rcturner2] 28/9/2016 09:26

there is also the option to sell some of the rights to fund the purchase of the remainder

[jonwig] 28/9/2016 09:23

p49b - there will be a date at which the shares go "ex-rights" (second half of Oct) and you'll be credited with "nil-paid" rights shares, which you can sell in the market or redeem by paying for your new shares.

In this case, it looks worthwhile to take up the offer, though I have a problem (shared by others, I imagine) that my PHNX are in an ISA which hasn't enough cash spare - I'll have to sell something.

speedsgh - thanks for your analysis in post #1803.

[rcturner2] 28/9/2016 09:17

lol that's what a rights issue is

[p49b] 28/9/2016 09:16

Will the rights issue be available to current shareholders?

[pimsim] 28/9/2016 09:16

Think it works out at divi of 50p per share in 2017. With adjusted share price after rights issue around £7.32 (taking today's price at £8.64). So divi yield in 2017 around 6.8%. Don't hold me to these calculations!

[edmundshaw] 28/9/2016 09:10

Cheers madmix. Yes, I recognize that phrase "bonus element". I hadn't reached the notes!!

[edmundshaw] 28/9/2016 09:08

scburbs, if so, and with the 7 for 12 this transaction would take us onto an 8% yield by my sums. Seems unlikely.

[madmix] 28/9/2016 09:05

I suspect the dividend will be adjusted as edmundshaw suggests. See note 2 :

(2) Stated after adjusting the 2015 dividend per share for the bonus element of the Rights Issue and based on the closing share price as at 27 September 2016 of 838.5p.

[scburbs] 28/9/2016 09:01

It seems clear the 10% dividend increase is per share, which is great with discounted rights issue.

[speedsgh] 28/9/2016 08:59

A quick comparison of the AXA Wealth & Abbey Life acquisitions...

AXA Wealth acquisition (announced May 2016):
> £375 million in cash
> Acquisition to add £12.3 billion of assets under management and over 910,000 policies
> Acquisition expected to generate cashflows of approximately £0.3 billion between 2016 and 2020 and £0.2 billion from 2021 onwards
> Price / MCEV of 71%(4) and Price / Solvency II Own Funds of 85%(5)
> Supports a proposed increase of the 2016 final dividend by 5% to 28.0 pence per share, equivalent to 56.0 pence per share on an annualised basis

Abbey Life acquisition (announced Sep 2016):
> £935 million in cash
> Acquisition to add £10 billion of assets under management and approximately 735,000 policyholders
> Acquisition expected to generate approximately £0.5 billion of aggregate cashflows between 2016 and 2020 and approximately £1.1 billion in aggregate from 2021 onwards
> Attractive price representing 0.89x multiple of Solvency II Own Funds and 0.77x of MCEV(1)
> Acquisition will support a proposed increase in dividends in respect of 2017 to £197 million, representing a further 5%(2) increase in dividend per share ("DPS") in addition to the 5% increase in DPS as a result of the AXA transaction

[edmundshaw] 28/9/2016 08:55

The dividend could be adjusted for the discounted shares, of course - I recall Connect PLC did that (to the accompaniment of some rather unfair investor whingeing). So I am not banking on more than a 10% uplift in overall return as yield.

[rcturner2] 28/9/2016 08:42

The rights issue is an interesting one, because presumably the ultimate share price will be lower once the rights shares are admitted, but they are raising the dividend by 10% so the overall yield on the lower share price will be stonking.

[jonwig] 28/9/2016 08:38

A rights issue - ages since I've taken part in one of these!

[edmundshaw] 28/9/2016 08:25

Looks a good deal on the face of it. Got up late, still reading... but 0.77x of ALAC's MCEV sounds pretty good to me.

[rcturner2] 28/9/2016 08:21

Happy days with that acquisition.

[edmundshaw] 20/9/2016 11:17

Add back the recent 26p dividend and the price is doing OK.