Carclo Share Discussion Threads

[wigwammer] 06/1/2021 08:29

With respect, it looks like investors have noticed it..

[gleach23] 06/1/2021 08:19

Agree rivaldo

[2magpies] 06/1/2021 00:31

never mind rivaldo: word is bound to get round.

CAR is well on its way, and the Chairman clearly thinks so, it seems.

(much better for the share price to rise, before most people notice .......... we know what happens then!!)

[rivaldo] 05/1/2021 22:57

Yep, £50,000 of shares at 16.625p is no chump change from the Chairman.

Wish they'd announced it first thing tomorrow - ridiculous to stick the RNS out after the markets have closed, when they could have embargoed it until the morning and more investors might have actually noticed it.

[babbler] 05/1/2021 21:47

That's only for results.

[beeezzz] 05/1/2021 21:41

Won't be any news for while then, otherwise insider dealing..

[ansc] 05/1/2021 17:07

298k is a sizeable 'chunk'.

[ali47fish] 05/1/2021 16:53

nick sanders exec chair buys a chunk

[beeezzz] 23/12/2020 21:55

Nice to see management are getting new deals and looking to 2021 hopefully many more to come...

[boadicea] 23/12/2020 14:40

For the scheme I was in, the pension in payment was linked to RPI (and still is, I believe). However the GMP was a backstop and now linked as you say to CPI. However, I am in no position to correct anybody as the situation following numerous government changes since the 1970's is a minefield even for the professionals - which I am not!

[2magpies] 23/12/2020 12:52

boadicea

indeed.

But I don't know if the bulk of CAR fund members would be considered 'early leavers'.

My understanding is that 'early leaver' revaluations (for 'protected rights') are in accordance with Section 52a orders (annually decreed).

As for the 3%/5%: uplifts (to guaranteed minimum pension only) are nowadays pegged to 'CPI', if lower. (i.e. CPI applies if lower than 3%/5%)

correct me if I'm wrong.

[1gw] 23/12/2020 12:25

Because it is (a proxy for) the rate used to discount the future expected payment liabilities.

[re1dy] 23/12/2020 12:13

Apologies, I’m starting from a very low level of understanding but if the main reason for bond yields dropping is asset price inflation secondary to factors such as QE then surely the actual income is the same? The membership has been capped for a while now so no new members. Why is the yield in % so important?

[wigwammer] 23/12/2020 11:23

That's right 1gw. We need to see a rise in the real AA corporate bond yield. At least the nominal rate of 1.5% has been steady since the last report. The most effective way they can get out of the hole is by growing the business - and in that sense today represents a material and tangible step forward. Let's hope there's more to follow :)

[boadicea] 23/12/2020 11:13

2magpies - Re: Pension commitments
I don't know the particulars of this db scheme but a typical one would have a minimum annual increment of 3% which is particularly onerous if the inflation rate is less than that, as now. Typically it would be capped, probably at 5%, which would be neutral for inflation between those figues (i.e. 3 to 5%). Above 5%, provided interest rates rose accordingly or the scheme was invested to exceed inflation there might be the advantage to which you allude.

[1gw] 23/12/2020 11:09

It feels like I have been hoping for many years that an increase in corporate bond yields would come to the pension scheme's rescue. One day Rodney,...

Also worth noting that an increase in inflation (expectations) per se is not going to help, since it will tend to increase the liability side of the equation. But if that causes a rise in corporate bond yields then it may. What should really help is a rise in real (i.e. inflation-adjusted) corporate bond yields.

-------------------------------------------
1gw - 10 Jan 2017 - 09:14:02 - 282 of 2031

Update on corporate bond yields (Carclo pension deficit).

Barnett Waddingham have today published their update on corporate bond yields, showing that the ML UK 15-yr AA corporates rate had recovered to 2.7% at year end. While better than the end-September rate (2.3%), it is still significantly below the end-March rate of 3.4%. It is also still below the end-June rate of 2.9%.

Inflation expectations have also increased over the last quarter, adding to upward pressure on pension scheme liabilities, while equity market returns should have been good given general market performance which would tend to increase the asset side of the equation.

On balance, I'm disappointed. I had hoped that the gap to the end-March'16 yield position would have closed a bit more by end-year. I now hope for further moves up by end-March'17 to increase the chances of Carclo being able to resume dividend payments.
...

[robow] 23/12/2020 11:06

good point re1dy

[re1dy] 23/12/2020 11:03

Change to the way RPI is calculated will help the pension deficit too. The BT pension fund manager stated each of their members could lose £32,000 as a result. It’s bound to have a similar effect on the CAR scheme

[2magpies] 23/12/2020 10:55

If and when inflation starts to rise, (with interest rates also going up) pension deficit could diminish in tandem.

[wigwammer] 23/12/2020 10:50

The deficit would be a millstone if the market cap were £100m+. At a market cap of circa £10m it enforces financial discipline, with enormous upside if/when it is paid off. I've been here since sub 6p with no intention of selling. ATB :)

[owenski] 23/12/2020 10:18

11m M.cap vs 10m P.A. contract

Looks great, but that pension liability is truly a millstone.

[2magpies] 23/12/2020 09:13

Nothing wrong with capital expenditure, given that it is meant to result in significant returns from a specific, definite, contracted product. (there are conditions to be met .. but room for optimism?)

[garth] 23/12/2020 08:47

Nice to get the RNS and the positive reaction. How much of the capital investment in tooling do we think is already done?

G.

[1gw] 23/12/2020 08:25

Yes, the market seems prepared to give them the benefit of the doubt. Onwards and upwards, hopefully.

[robow] 23/12/2020 08:23

Fantastic news