Phoenix Share Discussion Threads

[ganthorpe] 01/10/2016 09:50

I think I saw a phrase somewhere in the notes about "adjusting for the bonus element" which suggests that we will not get 58.8P dividend but something like 49/50P.
But still very acceptable to me.

[gliderpilot2002] 29/9/2016 18:06

It appears my earlier post was wrong. I had not appreciated the all important fine detail until I looked at the announcement on the laptop screen. Thanks for drawing this to my attention. It appears dividends on the enlarged capital may be around 50p

[stun12] 29/9/2016 16:45

A very nice showing today. WIth the divi just about to be paid, well above the £9 level now - the under £8 purchases are all looking fine. I'm delighted to have stumbled upon the company which looks to be well-run and doing all the right things. I think I'll probably take up the rights, even though I'll end up a little top heavy as a result. Reluctant to take profits as the yield is so attractive.

[gliderpilot2002] 29/9/2016 16:34

If you have concerns about what the rns means about future dividend payments you should email investor relations. To me the language is clear.

[ursus] 29/9/2016 14:08

I understand you can't buy nil paid rights within an ISA. At least I was stopped from doing so with Melrose recently. You can of course sell those allocated to you.

[jonwig] 29/9/2016 10:48

Nor rely on companies to be clear when they make statements involving maths!

[speedsgh] 29/9/2016 10:13

Agree, jonwig. Having just re-read the rns in its entirety including the footnotes, i would be astounded if the FY2017 div is not re-based to c50p. If their statements re div are read carefully in conjunction with the relevant footnote, it is perfectly clear that they intend to re-base. Just goes to show one should never rely on broker notes (cf Shore Capital note). Or bb posters for that matter! :-) DYOR

[jonwig] 29/9/2016 09:46

Regarding the dividend, statements involving percentages are notoriously misleading (per-cent of what?), whereas statements of money ought not to be.

Hence the only thing you should be able to rely on unambiguously in the RNS is the one saying dividends would rise to GBP 197m in 2017. And this suggests about 50p/sh on the enlarged share capital.

[speedsgh] 29/9/2016 09:43

Hopefully clarification on the dividend going forward will be provided in the circular when it is published. I would be very (pleasantly) surprised if the div isn't re-based to take account of the larger number of shares in issue. Not long to wait to find out anyhow.

[bluemango] 29/9/2016 09:42

I think you may well be right RCT, but if so the RNS is misleading when it clearly talks of a rise "per share" (when in fact it's a rise in the overall 'pot' available, but distributed over a proportionately larger number of shares leading to a decrease per share), and as stated above Shore Capital will have misunderstood.

[rcturner2] 29/9/2016 09:40

Note also that buying the nil paid rights is a kind of leveraged exposure to the share price, so they will be more volatile than the actual share price. They will also have a time value element, so could also trade higher than the share price minus the rights price.

[rcturner2] 29/9/2016 09:39

I think from the comment about the TOTAL cash value of the dividend after the deal that the per share dividend will be 50p after the deal has gone through.

[wllmherk] 29/9/2016 09:36

thx jon

wllm

[bluemango] 29/9/2016 09:28

Sogoesit, re your 1839, it's fair to say there's a degree of confusion as to whether the further 5% dividend increase is actually "per share". If it isn't, then Shore Capital have got it wrong in this comment posted on the H-L website yesterday:

"Shore Capital upgraded Phoenix to 'buy' from 'hold' following the announcement of the deal, which it called "well-structured, neat and value-enhancing".

"Indeed, this is the deal we have been waiting for, delivering 'proof of concept' for this management team and value for shareholders," it said.

Shore said it has upgraded the stock on the prospect of a 58.75p dividend in 2017 and strong sustainable cash-flows for many years to come."

As I said yesterday, clarity on this is essential. Is it going to be a rise to around 58.8p yearly per share, or an actual decrease from projected 56p after Axa deal announced back in May, to just over 50p as many here are now saying? Not afraid to display my ignorance here, as I'm sure I'm not the only one puzzled by the seeming contradictions (along with Shore Capital, it would appear!)

[jonwig] 29/9/2016 09:27

wilm - On the XR (ex-rights) day, a new class of shares will be traded, the nil-paid rights. Call them PHNZ, say.

The new shares will cost 508p each (fixed), and the theoretical XR price of the existing ords will be around 735p (variable). So each PHNZ will have a market price of about 227p (variable). So pay your 227p then 508p to your broker on the payday.

[wllmherk] 29/9/2016 09:11

Ive not been involved in many RI, just one as far as I can remember. I intend to take up my rights but can I buy additional RI shares over and above my entitlement and if so how do I go about that ?

thanks

wllm

[jonwig] 29/9/2016 08:33

edmund - thanks ...doh!

[rcturner2] 29/9/2016 08:04

Thanks Brancho, I have been involved in more than one rights issue in the past, so I have sold nil paid rights before. This was a good opportunity for me to prune my stake as I was a bit under diversified. Selling nil paid rights is pretty much selling part of your stake anyway, so I think it comes to the same thing.

[edmundshaw] 29/9/2016 07:59

jonwig, it is in the RNS, and I quote:

Contractual Protection in Place for FCA Investigation Outcomes

Phoenix has agreed a Deed of Indemnity ("DoI") with Deutsche Bank, including £175 million indemnity protection, to cover potential negative outcomes with respect to the FCA's investigation in to Abbey Life's fair treatment of long standing customers between 2008 and 2015, and Abbey Life's annuity sales practices.

Risk sharing agreements have been put in place for redress costs and associated fees connected to both investigations whilst potential fines will be borne entirely by Deutsche Bank, subject to the £175 million aggregate indemnity protection level. The DoI will expire after six years in respect of the long-standing customer investigation and eight years in respect of the annuity sales investigation

[jonwig] 29/9/2016 07:33

Something useful, which is also in the RNS but I was too stupid to spot it:

In March, Britain’s Financial Conduct Authority launched an investigation into Abbey Life’s treatment of long-time life insurance customers which could result in compensation payments to policyholders or fines for the British insurer.

Bannister said Phoenix had taken out an indemnification to ensure that its shareholders are protected against any financial downsides of the investigation.

Maybe in the Presentation, which I haven't seen yet.

[brancho] 29/9/2016 07:16

RC, you can always sell the rights 'nil paid'

[sogoesit] 29/9/2016 06:37

Reading this on my travels. Looks good to me (but am no expert on the embedded valuation side) and my understanding, too, is that the dividend increases are "per share". This is a long term income portion of my portfolio so will hold and accumulate with the rights.
Thanks to all those giving clarity above as, otherwise, I am a bit out of touch.

[rcturner2] 28/9/2016 14:21

I have sold half of mine today, the ones I got on the Monday after Brexit.

I have too large a stake to be able to join in the rights issue.

[edmundshaw] 28/9/2016 13:56

Some sensible posts here.

I will be taking up the rights because I think it is a good deal with some potential upside beyond the headline numbers, and management has shown itself consistently capable of making value-enhancing deals, so I think the general expectation of a share price over £10 (pre-rights equivalent price) is fair. A 6.8% yield plus 20% upside and relatively low risk downside seems good to me.