Ashtead Share Discussion Threads

[bracke] 19/3/2020 16:38

Ref Post 57850

Apparently support in the £12-£8 zone.

The long lower wick on to-days candle would normally indicate a 'wash' ie. selling completed leading to a rising share price Unfortunately these are not 'normal' times.

Given that the virus situation has not peaked and is not expected to do so for several weeks a revisit to the low is a fair probability if only to test it.

Remember this phrase:- 'when the tide goes out you can see who is swimming naked'

Corporate greed ensures we are destined to repeat the same mistakes over and over. Human nature does not change.

[clarky5150] 19/3/2020 16:29

Wow, now that's what I call an intraday bounce.

[uppompeii] 19/3/2020 16:11

That's something of a range today!

[fenners66] 19/3/2020 14:13

I read the article about AA and it really beggars belief.
Essentially adding all $12bn of buybacks to debt !

AHT have of course done the same on a much smaller scale and I guess AA are somewhat at the top of the "Madness" spectrum.

But the point is that the US institutions let them do it !

So no regulators stopping them.
No auditors (presumably ) writing qualified audit reports...

But most of all the institutional shareholders presumably lapping it up - looking at the share price, as traders not investors.

Pass the parcel hoping not to be holding the shares when the music stops.

So we have companies making ridiculous decisions with the support of major shareholders - who don't give a fig as long as they can sell higher into the guaranteed short term demand created by the buybacks!

Then other companies (like AHT) come along and cite the markets doing it , shareholders love it.

Sure they are shareholders , they trade shares in big numbers and hold them for as long as it takes , milliseconds days, years perhaps but knowing their best returns from share buybacks are from selling , not holding and collecting dividends.

[amaretto1] 19/3/2020 11:32

Never ever understood Share buy backs .... When u r billions in debt Not too bad, if no borrowing. These clowns at AHT have put a great company in serious danger .. if this carries on longer than a year. They have not learnt anything from the past here.. it's nailed on to go under 10And the FTSE 4000 and under Triple witching tommorow, mkt are normally strong in the run up, After they fall !! Take note.

[optomistic] 19/3/2020 11:14

==============================================
Hope the link works, interesting article about American Airways and their share buy backs.

[fenners66] 19/3/2020 11:05

PS - that would have been REAL EPS ie higher profit , not a different ratio !

[fenners66] 19/3/2020 11:04

SMCNI - so a rough £35-40m in interest on the extra £1bn would be in line with your calcs then

The other part could have been that with a lower debt - would interest rates been lower across the whole £4bn remaining ?

Even 0.1% would have been £40m !

By my calcs - leaving the original number of shares at 528m that interest saving (say 35m +40m) would be 14p a share!

Again rough , but nearly the same (granted pre-tax)

Factor in the re-financing savings - every year (!) and you get just as good EPS with less risk.

Now we get to a new state where Govt debt around the world is going to go crazy and they will hope for inflation to inflate it away.

What cost of corporate borrowing next time they need the extra £bn refinanced ?

[smcni1968] 19/3/2020 10:42

debt maturity:Bank $2,654 in 2023Notes $600mm due in each of 2025-2038 ($3,000 total)So not looking down the barrel of a refinancing gun this year at least.by my calcs the annual interest bill is about GBP175mm

[fenners66] 19/3/2020 10:05

Thanks dcarn.

So it is over a £bn then.

Gives a £bn more headroom.
Would have cost what £40m less in interest ?
And of course my bugbear the % of the £bn in "exceptional" (although it happens every time) re-financing costs.

[amaretto1] 19/3/2020 10:02

Exactly... well said !

[dcarn] 19/3/2020 09:49

Shares 50,275,880

Cost £1,059,420,130

[fenners66] 19/3/2020 09:40

thanks dcarn , if you have the numbers to hand , can I ask , at what total cost and how many shares please?

[dcarn] 19/3/2020 09:37

Average price for buybacks as of yesterday, £21.07.

I personally don't think the additional £1b of debt for the buybacks make that much difference in the current markets, we'd still be getting hammered for the other £4.4b.

As of 31st Jan, net debt £5.44b, not good.

[fenners66] 19/3/2020 09:27

And they can forget wasting any time and money on rebranding as well.
I don't care who's idea that was.

[fenners66] 19/3/2020 09:25

What was the average price paid for the buybacks ?

At the time of posting here it was as if the company had made money doing it.

They hadn't.

They had committed the company to more debt, more interest and more finance renewal costs.

Those are real not ratios.

Real is starting to count today -not "maybe EPS" figures, to be fair not even Div Yield counts for much today.

I made these points at the time , not now with hindsight.

I said the constructed increase in EPS was assuming all other things remain equal and the company does not have control of all other things !

So a simple mantra is control the controllables and leave the speculating to others.

Where would the share price be NOW without £1bn of the debt ?

[optomistic] 19/3/2020 09:10

The FD must be a very shrewd person! LOL

[amaretto1] 19/3/2020 09:03

When u think about it...Buying back shares... even yesterday .. with all this debt Beggars belief

[fenners66] 19/3/2020 08:32

Direct Line Group has suspended their share buyback program .

I'm sure there will be others.

[fenners66] 19/3/2020 00:59

davidcar8 thanks for trying.

AHT has always been in a cyclical industry , this things could get bad, sometime.
Experts have an eye on the future and ensure the company doesn't get caught out next time.

Well they get paid as experts.....

[tenapen] 18/3/2020 18:43

Even 'smart companies' who are profiting from this sell off, are being marked down.

Regards.

[bracke] 18/3/2020 16:53

In post 57855 I mentioned "smart companies". Need I post more.

[davidcar8] 18/3/2020 16:18

I have held these shares since 1994 and therefore have seen rises and falls over the years -down to 3p from the 70p I originally paid and later from 240p down to c25p in 2008'09, when I held 300000 shares. I subsequently sold 250000 leaving 50000 costing c70p each. I resolved to hold these for ever, but last week my resolve went when they dipped under £20 and I sold out, receiving £900k and asked myself why I had held on so long.

I still believe these are solid shares, but there is a lot of debt which bothers the market. I have never agreed with the share buy backs and wrote to Geoff Drabble in December 2017 requesting him to increase the dividend and eliminate buy backs -instead paying down debt. He did write back -but did not agree with me. I would not know if the fall today would have still occurred -but 50 years investing told me the shares would be in a better place if the debts were lower.