Abrdn Share Discussion Threads

[mcunliffe1] 13/11/2024 14:58

REDHILL: your question has merit but can never have an answer. The merit lies in deflecting the truth.

How about, alongside jubber's suggestion, you look to how that money may have been better invested - if needs be in some other company's shares.

[jubberjim] 13/11/2024 14:54

We know where the share price is with the buybacks

A better question is where the share price would be if the monies had gone towards paying a slightly enhanced dividend after the savage cut of 33% by the chap out of the cuckoos nest

Is a question open to conjecture

The buybacks were signed off by Flint and his fellow grandee numbskulls.

My view have to stick with it but is it painful

Yes!!

[redhill] 13/11/2024 13:41

What you are not taking consideration of is where would the share price be now without the buy backs ?

[pierre oreilly] 12/11/2024 16:55

You can hardly fail to gain if you switch from managed to self managed mc.

Managed means to get the return split roughly 50/50 with the provider, self managed means you keep 99% of it (depending on the small charges you pay).

No salaries, bonuses, shareholders, counter party churners etc etc to pay for.

Obvious in retrospect isn't it.

[wllmherk] 12/11/2024 14:28

I'm not against share buybacks per se, but, ABDN have spent hundreds of millions of pounds on buying back shares in the past 5 years or so at significantly higher prices than the share sits at today. That is bad enough, but, surely an Investment company with highly paid Analysts and Investment Managers could have found better use for that money by investing it, that is what an Investment company is meant to do?

wllm :)

[kenmitch] 12/11/2024 14:09

Can’t see the point of all the posts on the plus points for buybacks when the simple fact (I.e fact and not theory) is that ABDN started their buybacks with the share at £5 about 6 years ago. ABDN has bought back heavily every year since then and the share is now just £1.40 and 70% below that £5 share price when the buybacks started.

[fenners66] 12/11/2024 12:33

MCunliffe1

its tantamount to Aberdeen starting a fund - lets call it the Abrdn Getting Smaller Companies Fund.

They have invested hundreds of millions of £'s over the last few years in this fund and it has

underperformed the market , probably by a market leading %.

I have not run the numbers but , since they stated this fund , it must be something like -35% a year each year.

However they are very proud of their performance and issue investors a new document trumpeting the virtues of investing in this fund often more than twice a year.
Not only that but the funds performance does not have to be extracted from some obscure funds website that hardly anyone ever uses - instead , it makes it into some broadsheet papers daily !

Fantastic and in response to such market leading performance , their other fund holders have realised their mistake , not investing in that fund and have left those funds in their droves - £billions of investment have left as those investors have seen the light...

[skinny] 12/11/2024 10:21

Rule of 72!!

[bbd2] 12/11/2024 10:18

Shorts now at 6.67%.

[spawny100] 12/11/2024 08:48

Lol nets sorry to have to correct you again - you double your money in 8 years@9%!

[mcunliffe1] 12/11/2024 08:46

Before I hit pension age any spare cash I had for which I truly had no other purpose would be invested in my pension which at that time was with Standard Life. I had several With Profit pensions and one invested in the UK Smaller Companies Fund. It was actually piggy-backing on the Aberdeen UK Smaller Companies Fund.

As a welcome bonus I received the tax relief at my marginal rate at the time of investment.

As I became more aware of my pension needs, driven mainly by my increasing age but also driven by the rather lacklustre performance of the S.L. pension plans and in particular, their website/customer platform I looked to make changes.

I moved the entire pension to Int. Inv. and started to make my own investment choices. I had, in effect, almost £200k to use as I saw fit. I did not draw-down the 25% tax-free, instead, I paid myself a 'special dividend' each year a quarter of which was of course tax-free and the other three quarters being taxed as appropriate.

I then had the thorny issue of where to invest THAT money. Rolls Royce provided the answer - about a year ago. I saw that companies potential and invested a large chunk. It has done well since although it has yet to pay me any dividend.

Other companies have been decent investments - mainly for their dividend payments. PHNX, LGEN, BATS, TFIF and RECI to name a few. All decent enough and except for PHNX and LGEN (currently) all in profit. The laggards have been in profit in recent times, just not now.

The point I am making is the importance of investing in the right company and, most importantly, at the right time.

This is a skill that every investment company should possess. ABDN perhaps do not currently possess that skill.

Instead of spending all that buy-back money - OF OURS - on their own, lacklustre shares that were falling throughout most of the BB period, they should have invested it in other, growing companies. Rolls Royce would be one fine example. There are many others.

Cross ownership of companies is not unusual. PHNX and ABDN have a cross-ownership of about 10% I believe. Both are performing poorly at the moment. I try to keep a varied portfolio to avoid one sector suffering. Perhaps ABDN need to follow the same logic.

I have always found it hard to accept that a company who's existence is based upon investing other people's money then have insufficient imagination to use their spare cash other than with a buy-back.

Is it lack of imagination or pure directorial self-interest? It certainly is our money though.

[netcurtains] 12/11/2024 08:05

buybacks make YOU money...
If a company pays 9% dividend.
(taking into account compound nature)
you DOUBLE your money in 16 years.

The rules of the stockmarket are that
buybacks are NOT allowed to affect the general price
(that is the rule). So they are not done to support the
share price. They are done to save companies millions
of pounds in future payments.

Any company that pays BIG dividends should buy
back shares.... Its rational.
Paying back a bigger dividend puts an unnecessary
strain on a companies finances and causes problems
for the next set of pensioners as the company slowly
goes bust.

BUYBACKS are BRILLIANT.

[jubberjim] 12/11/2024 05:56

I have to say I agree with Sigmund as to the merits of buybacks.

They serve a purpose but in my experience in most cases they are carried out to ensure that the share price is maintained at a level whereby the Board of directors qualify for their allocated share bonuses.

I have argued that the way to install value is to pay an enhanced dividend however small that increase might be .

This is especially true in the case of ABDN who cut their dividend by a third.

I repeat my assertation that Douglas Flint and his cohorts should go.

Why He and they are still in place after the disastrous decline in the share price over the last 5 years is nothing short of scandalous.

The unlamented Bird did do one thing in his short time at the helm which was to acquire II but he did overpay at the time. This was then followed by a share buyback starting around 240 followed by yet more share buybacks.

A lot will depend now on Aviva update on Thursday 14 November and how that is perceived and received by the market.

I have my doubts as to the direction the market as a whole will be heading but going to relax now until Xmas(after Thursday sets the scene) .

Good luck all

[sigmund freud] 09/11/2024 12:47

BBs may be related to CEO / board remuneration packages linked to share price increase, so if CEO etc want a big bonus, launch a BB.
If the remuneration is linked to total returns to investors, issue a special dividend.
Simple really.
The strategy of their BB is not linked to financial incompetence, it is more related to snouts in the trough time. This is a general rule of thumb and has served me well to remember over the years.
The fact that the BB occurred and the share price fell, is the actual sign of incompetence of those with snouts in the trough.
STAN's BB has put rocket fuel under the share price this last 12 months, that is what should happen in a BB

[mister md] 08/11/2024 16:34

Well it's up on the week - that's the only positive I can find at the moment.

[fenners66] 07/11/2024 22:02

But you meant that as the liability of "reducing the total dividend payout therefore is more advantageous to the company," didn't you.

And Paying out 10 years dividends per share in one go does nothing for reducing "payouts" does it.

So no it has no advantage to the company.

Before you argue about balance sheet - you are aware that most companies with share buybacks also have borrowings - so even if you try to add capital and reserves to the balance sheet liabilities - you are only swapping one liability for another.


Paying dividends as dividends to the owners is considered a "liability" to be avoided by many boards , who presumably would think themselves better off if they had no shareholders at all and just got left to get on with enriching themselves.

[jonnybig] 07/11/2024 14:31

Fenners.

Shareholders are effectively the company's creditors, so yes they are classed as a liability. That's why many balance sheets show "equity and liabilities". Please DYOR before sounding off and showing your ignorance.

spud

[kenmitch] 07/11/2024 14:28

jonnybig.

I think that’s nonsense but I might think agsin if you answer this question effectively.

GULF KEYSTONE were paying 88p in dividends in 2021 when the share price was usually around 260p. That meant that year investors got back over 30% of the stake. Was that or was it not a genuine cash reward?

That was the question to answer.

(The share price is much lower now but that’s because they had to cancel all dividends on the sudden closure of the pipeline. But for that investors would have had more than their original stake back in roughly 3 years and could run the shares for free. And but for the pipeline closure the share price would have continued to do well too).

As for ABDN they started buybacks at £5 and continued them for several years and all the way down to £1.40 for a 70% loss. Is that really better than the Gulf Keystone dividend example I’ve just posted?

[fenners66] 07/11/2024 14:14

jonnybig - showing your contempt for a company's owners there "reduces the "liability" to its shareholders"

You are not alone I suspect all the boards who do buybacks have the same opinion.

[mcunliffe1] 07/11/2024 13:56

It was simplistic sarcasm. It was also meant to highlight an alternative to BB's. Such do exist.

To answer your question about receiving Special Dividends. Yes, one that springs to mind. May, 2013. Special of 12.8p and it was added to the 2012 final dividend of 9.8p.

The Company?


Aberdeen.

Before they lost both the vowels and respect for their shareholders.

[jonnybig] 07/11/2024 13:25

A special dividend is a total waste. If you want to extract money to reinvest elsewhere, just sell some of the shares. All a special dividend does is distribute the assets, lowering the NAV, so there's no difference. A buyback reduces the "liability" to its shareholders, reducing the total dividend payout therefore is more advantageous to the company, irrespective of whatever the market cap decides to do.

spud

[mister md] 07/11/2024 11:53

Yes, the only advantage of that is it provides a chance to consider where to re-invest the returned cash - in the same company or in a better opportunity.

[pierre oreilly] 07/11/2024 10:31

btw, have you ever had a company paying a very large special to return the cash from say selling off a chunk of business? I had several. And at the end of all the sale of the chunk, the adjustement of shares, the payment of a big special, etc .. after all that I've alsmost always ended up with a cash value (remaining share plus cash) equal to the value before the chunk was sold off). i.e. no net gain at all.