Smith (ds) Share Discussion Threads

[typo56] 19/6/2018 11:22

I think it's cleaner this way. Otherwise they'd have had to run with two stock lines from the fully paid date (25 July) up to the ex dividend date (4 October).

It also means the nil paids will track 350p below. It can be confusing when there's a dividend to offset too.

[dogwalker] 19/6/2018 11:12

Thanks Typo56. Your second point is the key one of the two.Fair enough then. It certainly doesn't look good though.

[typo56] 19/6/2018 10:55

Dogwalker. It may seem unfair but...

1) Short term the dividend income will normally be offset by the capital loss as the share price falls to reflect the ex-div. Therefore, if the divi were bigger, the price drop would be bigger.

2) The dividend value will be reflected in the price of the nil paid shares. i.e. without the dividend, once they go ex rights the nil paid shares would normally track about 359.8p below SMDS (350p exercise price plus the 9.8p dividend they wouldn't be entitled to). In this case they should track about 350p below. In other words, should you wish to sell the nil paids or let them laspe, you'll be receiving 9.8p per nil paid share more for them than you would if they didn't have the dividend entitlement (it effectively adds 3/11 * 9.8p to your dividend per SMDS).

Therefore, overall, I don't think you're as hard done by as may first appear.

[dogwalker] 19/6/2018 10:22

That's it Typo56, the company is regressively thieving dividend from the pre-existing holders during the period to which the dividend relates, in order to ('progressively' as they say ) coerce or bribe people into buying their new issue of shares.
Hopefully for holders this doesn't become an act of hubris.My motto & message for this packaging company is 'Get stuffed'.

[typo56] 19/6/2018 09:51

I'm not up to speed on all this stuff about the divi and the rights, but normally rights issues don't qualify for the forthcoming dividend. That's not the case here. I therefore feel sympathetic to the argument that existing holders are being hard done by.

Were it not for the rights shares, holders might have received about 27% more dividend. You'd have probably given it back as capital on the XD drop anyway though!

[ali47fish] 19/6/2018 07:42

sorry eddy what do you mean - is this a comment on todays rns about the rights issue? please explain

[eddyeagle1979] 19/6/2018 07:03

Agree with Dogwalker and marksp2011 re the dividend. Poor form by DS Smith in my view.

[phillis] 19/6/2018 06:44

TERPS 505p?

[dogwalker] 18/6/2018 20:51

marksp2011's argument is correct. The company is 'out of order' in this instance. Specifically, they have demonstrated that their dividend policy is a regressive one i.e backwards -looking.

[phillis] 18/6/2018 19:03

No money to invest?

[marksp2011] 18/6/2018 16:11

Phillips...I am more interested in the fairness of this. If you weren't invested in the period you shouldn't get the divi.Whether I chose to be invested in the next year shouldn't effect what I am due from a previous year

[phillis] 18/6/2018 16:06

the divi on the old capital base would probably have been about 11.2p

You can probably compute the terms of the rights therefrom

[phillis] 18/6/2018 16:01

the rights issue ( when it comes ) is what is causing the share price to drop

[hopefuldave] 18/6/2018 15:55

Is that's what's causing the price drop?.will they recover?

[phillis] 18/6/2018 15:50

The divi drop is irrelevant if you take up your rights in full

[bscuit] 18/6/2018 13:16

"For the year 2017/18, in accordance with our dividend policy, the Board recommends a final dividend of 9.8 pence per share, which will be paid to all shares on the record date, including those to be issued in the rights issue. The 2017/18 interim dividend of 4.9 pence, and prior dividends, will be restated in future accounts to reflect the bonus factor adjustment resulting from the rights issue."

Can someone explain to me what "the bonus factor" is?

I am increasingly seeing instis and business sellers saying we'll support but we want the dividend that LTHs are getting - where they haven't had risk - but cutting the divi is presumably being cut because the divi pot is being divided between more people resulting in a 8% drop. Hardly fair to LTHS.

Tempted to sell and regretting not selling at recent highs. I have held for 20 years or so.

[marksp2011] 18/6/2018 11:40

No
What has been published is that the new shares whenever they are issued qualify for the dividend from the last financial year.

[losos] 18/6/2018 11:36

marksp2011 - Have the terms of the rights issue been published ???

[phillis] 18/6/2018 07:31

and the terms of the RI are ?
What?
Weirder and weirder

[broadwood] 18/6/2018 06:54

DS Smith reported pre-tax profit rose 8% to £292m in the year to 30 April, which was partially driven by strong organic box volume growth of 5.2%.

The company said it benefitted from growth in all regions and continued delivery in line with medium-term targets.

Sales over the period increased 17% to £5.76bn.

HIGHLIGHTS:

- Strong margin performance despite significant input cost headwinds

- Sustainable financial returns

- Continued leadership in e-commerce packaging

- Excellent performance by North American business

- Delivering well ahead of initial expectations

- Returns greater than WACC in initial period of ownership

- Further accretive bolt-ons in Europe and US - EcoPack and EcoPaper (Romania) in March 2018 and Corrugated Container (US) in May 2018

- Proposed acquisition of Europac

- Strategic review of Plastics division underway

OUTLOOK

The current year started well, with the volume growth momentum seen in 2017/18 continuing into the new financial year and the ongoing recovery of the paper price rises announced earlier this calendar year progressing as expected.

Drivers for growth of sustainable packaging in a dynamic consumer and retail environment are more relevant than ever.

Our differentiated position with customers, built on our geographic scale and innovation-led expertise reinforces our confidence in the prospects for the business.

CEO Miles Roberts commented: "DS Smith is reporting a strong set of numbers for the full year, showing that we are continuing to succeed in a very dynamic market.

"Through our close customer relationships and innovation, we are capitalising on secular underlying growth trends such as the rise in e-commerce, desire for sustainable products and the evolution in consumer shopping habits.

"We are gaining market share and showing strong margin performance, offsetting significant input cost headwinds.

"Our box volume growth continues to be impressive at just over 5%, demonstrating the continuing demand for our sustainable, high-quality products.

"We were delighted to announce the proposed acquisition of Europac on 4 June which builds on our recent acquisitions in Europe of EcoPack and EcoPaper and also in the US, where the integration of Interstate Resources is delivering excellent performance, well ahead of expectations.

"We're seeing good momentum into 2018/19, feel that our model is more relevant than ever for our customers, and view the future with confidence."

[broadwood] 18/6/2018 06:47

To remind me.

The Acquisition is conditional on the receipt of acceptances from Europac shareholders representing at least 50 per cent. plus 1 share of the entire share capital of Europac, receipt of regulatory approvals and the approval of DS Smith shareholders. DS Smith expects to publish a circular, including the notice of a General Meeting at the time of the announcement of its full year results in June 2018.
-- Subject to the satisfaction of the conditions to the Acquisition, including the receipt of regulatory approvals, the Acquisition is anticipated to complete during Q4 2018. On completion DS Smith intends to delist Europac's shares from their listings on the stock markets of Madrid and Barcelona.