Salty, where would you put the re rate at?
I agree today makes for good reading and I hope this is a trigger point for a push towards 3000 again eventually. We were there this time last year so I don't think that's too unrealistic but with UK listed companies then who knows these days.
Good luck all 👍🏻 |
what a great opening,made my morning.. |
58.88 pence times 4..
We continue to expect to deliver cGBP40BN of cumulative free cash flow over the next five years, and remain committed to a progressive dividend. Once our leverage target is reached, we will evaluate further opportunities to return excess cash to our shareholders (aka buybacks/specials).. |
Superb, bears thought dividend cut not increased what a yield we are getting. |
These results are bloody good. The new category stuff is excellent. Way ahead of target. Government crack down in cheapo disposables from Chinee is great news for BATS.
Significant re-rate on the cards here.
Salty. |
Dividend 235.52p, all I'm looking at, lol. |
Good results. New category growth is impressive and resilient elsewhere.
We already understood the impairment charge. Divi ok. |
The reduction in share value has wiped out my recent dividend gains :( |
Thanks for info :) |
The free float is everything that is available for public trading, ie not held by institutions or funds, the shares that are washing around in between settlement between buyers/sellers are floating and not allocated until settled, but this is different to the free float, once settled these shares are allocated, this is why the record date is usually next day or day after XD to allow trades a little lag to settle then the numbers can be reconciled to payout on..
Shares bought and held in treasury are qualifying, but the dividend cash would be retained, maybe it could appear on the income statement in the accounts, I would have to find some examples to refer to..
Not much will happen until we hit the debt/EBITDA multiple, but we must be very close now..
We will see what we get this week.. :o) |
Thanks. I'd assumed that not every share is held by an individual or institution etc, there's always a free float, an amount available to be traded. If nobody owns a share there's nobody entitled to a dividend.If that's not the case then I've learnt something. Also how about treasury shares?, BATS have done BB's before but I don't know if they were cancelled or went into treasury, surely they wouldn't pay dibs to shares in treasury they've just bought?. |
 #Discodave46, the free float refers to the shares available for public trading and not held by institutions, any shares bought back are bought from the open market at arms length by a broker, all common shares are dividend qualifying if they are held the day before the XD, then they have an owner on the record date to credit..
All shares bought back and cancelled reduce the issuance and the free float so they cannot be owned, in turn reducing the companies dividend payouts..
Only speculation on my part they will do a BB, we will see what we get in the FY results this week but I would not be surprised with the share price down where it is..
FY-2022 - we now expect new category profitability in 2024, one year ahead of plan.
H1-2023 - we are making great progress in new categories with revenues up by 29% and we are now close to breakeven..
H2-2023 - we could be in the black going forward.. :o)
06.12.2023 - we will continue to reward shareholders through our strong cash returns, including our progressive dividend, and once the middle of our leverage range is reached, we will evaluate all opportunities to return excess cash to our shareholders.
06.12.2023 - we are making progress towards reaching the middle of our guided 2-3X adjusted net debt/ EBITDA leverage range and expect to be around 2.7X by year end.. |
hxxps://twitter.com/v239856/status/1753778720903479804 |
Interesting chat on BB's. The point about not having to pay 10% div on shares purchased via a BB. Surely the company purchase shares from the free float which won't have dividends owing as not held. So there's no cash saved by doing a BB. They have 2bn shares in free float. That's my thinking anywsy, |
Thankyou for your explanation of the 10% question.
It adds another element of complexity to the BB - namely the yield rate on the share. I see in BATS' case it is 9.62% (near as damn 10%) so each share bought back saves future payout. |
#0x3f, indeed, if the share price is at a high say 5500 in 2017, that would be a poor use of capital, but down here at 2350 and paying out 10% that would be a good use of capital lifting the EPS/DPS by shrinking the issuance..
Generally I am not a fan of a BB, unless there is value, I would prefer to see debt reduced, but in this instance and current share price maybe 50/50..?
Shares are usually cancelled in a BB, so no payout on those, if they are held in treasury the payout gets retained by the company..
I will be looking to add over H1, FY2023 results next week 08th may influence timings if there is any news on a BB, but we will see what we get along with the next round of dividends.. :o)
With 23 consecutive years of progressive payouts (ex 2017) we should be looking at 4 * 60/61 pence |
I would prefer debt at x2 or under before any buy back programme here.
Anyway, hopefully the upcoming update will be positive. This is cheap - if everything is on track. IMO naturally. GLA. |
 2 scenarios:
1. The company buys back shares which are yielding 10%. It therefore doesn't need to pay 10% out on the shares that it has bought back.
2. The company instead buys back debt. Say the debt is yielding 6%, then it doesn't need to pay out that 6%.
The idea is that it's better for the company to buy back shares at it will save 4% (10%-6%) in doing so.
However, if you think the debt is unsustainable and the company won't be able to make a debt payment or roll debt that is maturing, then clearly it is the debt that should be bought back. I don't believe that is the case for BATS, as is highly cash generative and has an ITC safety net (which they could sell).
Although buybacks get a lot of bad press, it really depends on at what price the buybacks are done. If you hold a share, it should be because you think it is cheap* and so holders should view buybacks as a tax efficient way of compounding their cash. If you don't agree (ie you can better select what to buy with the cash) then you probably shouldn't own the share in the first place (buy what you think is better).
-0x3F
*Someone mentioned yesterday that BATS is on a PE of ~4 if you back out the ITC holding! |
I'm missing something here guys - and it may be important to my opinion on BB's.
LLB: you mention a saving of 10% on dividend payouts and 0x3f confirms this same figure.
How? Are you making an assumption that about 10% of the current shares would be bought back and hence, in future, divi's would only be paid to the remaining 90% or is there a tax element at play that I'm unaware of.
Honest question - no angle intended.
Thanks. |
LLB, think this is a good point - Saving more on buying back shares(10% divi), than compared to buying back debt (<10%).
I don't feel that the current debt is an issue, as I read that generally net debit/EDBITDA of 2-3 is considered safe. The fact that they've been at 5.3 times without issue would back that up.
I think that the problem has really been the maturity profile of the debt, specifically debt due in next 5 years or so. I've been following this chart:
hxxps://www.bat.com/DOCYEQPP.html
At the start of 2023, several of the lines were above 4Bn, now nearer 3Bn. It looks like they've made significant progress in rolling or paying back the debt that is due in the near future. Maybe at nearer 3Bn, they'll consider restarting the buyback. |
#MCunliffe1, with the share price down from a peak of 5500 in 2017 and the RJN takeout, down to 2350 today from 3100 a year ago, but now the debt to EBITDA has been cut in half, the Vape juice sector is about to be regulated and BATS are very neatly positioned with c50% of that market sewn up already..
Keep buying the weakness stake building should be a good long term strategy for the 10% yield until the share price picks up, if they do a BB in H2-2024 and miss the weakness we will have to wait and see..
At FY-2017 - total borrowings were GBP49.50BN, an increase of 30BN on 2016 for the RJN takeout.
At H1-2023 - total borrowings were GBP42BN with net debt 37BN
Debt is still way too high IMO, it needs to come down, but when you can save 10% on your dividend payouts with a BB, maybe a split is a good compromise..? |
The company expects 50 per cent of its revenues to be from these less harmful, non-combustibles by 2035, up from 17 per cent today. Leverage is also coming down with net debt to EBITDA having declined to 2.7 times in 2023 from 5.3 times in 2017, making additional stock buybacks and/or a dividend hike increasingly likely.. :o) |
Indeed, optimism there is. Thanks 0x3f.
I liked the statement:
“The FDA has confiscated more heads of romaine lettuce than it has illegal e-cigarettes in the last five years.”
Priceless. |
Thanks ox3f - reasons for optimism |
Good summary |
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