Imperial Brands Share Discussion Threads

[valuehurts] 18/3/2024 22:34

Dividend isn't going to get cheaper. It will be increasing quite rapidly on a per share basis.

[luderitz] 18/3/2024 20:49

This share pays a reasonable dividend thankfully as I’m way down on the price I payed originally for it.

[louis brandeis] 18/3/2024 19:29

Thank you Dartboard1, useful post.

[louis brandeis] 18/3/2024 11:03

In a mature market you don't expect much top line growth. The buybacks ARE essentially the growth. In other words: the pie isn't getting any bigger but the remaining holders' % does. This is why buybacks are so fundamental to mature stocks. Of course as the shares are purchased the INTRINSIC VALUE per share increases. This doesn't automatically mean the share price will rise anytime soon. You may have institutions wanting to get out through ethical reasons: obviously they have to promote the holding to the woke brigade. Or, you might get sellers fearful of a bear trap. Eventually though the share price will rise but even though the price rises a similar level of buyback in monetary terms might buy less shares but could continue to exit a similar percentage from the market cap (less volume out there).

If anyone is interested this situation is very similar to Buffett's play on Rockwood. Shares were repurchased in exchange for cocoa bean certificates at a good rate so many shareholders swapped for the certificates but the greatest return was there for remaining holders as the cocoa been inventory left over was more per share than the certificates being offered. If you swap the idea of the cocoa bean certificates there for the current share price here you have a similar situation.

Just watch the operating margin as it is only around 12% (BAT around 47%!) and make sure the ROCE doesn't fall off a cliff.

[valuehurts] 17/3/2024 23:12

Revenue pretty much flat but you may have noticed the share price doing 10x

[valuehurts] 17/3/2024 23:09

Go and look at a chart of Dillards. Then go and look at the share count. 74 million in 2009. 16 million now.

[fenners66] 17/3/2024 22:18

Fantasist.

[valuehurts] 17/3/2024 22:13

It won't because the share price will move up but if we stayed at this price that would be the result.

[jrphoenixw2] 17/3/2024 18:23

:-D lol VH^

[valuehurts] 17/3/2024 11:48

So at the current valuation within 10 years the share price would go up 98x

[valuehurts] 17/3/2024 09:12

If we keep the multiple low the quicker the company can retire equity.

[valuehurts] 17/3/2024 09:06

That's how much the share price will rise if we stay at the same multiple while the equity is eaten up. Not too difficult to understand is it.

[spud] 16/3/2024 18:49

Looks like he's gone orf like a cheap N Korean rocket.spud

[fenners66] 16/3/2024 18:28

ValueH wtf are you on about ?

[jrphoenixw2] 16/3/2024 10:33

Spud^ No kidding!

Final trades in the regular session were coming through around 1730.0p
Then at 16:33:00 a 280,000/1736.2p trade Off-book for £4.9mm
Then 16:35:15hrs the 7.2mm/1695.5p the Uncrossing trade for £121.6mm
Final trades for the session via 'XOFF' around 1732p

Source:

[spud] 15/3/2024 18:37

A 35p ut trade drop has distorted finishing prices today. spud

[valuehurts] 14/3/2024 21:37

We should be encouraging people with Fenners thinking. Hopefully the share price stays low while they buyback shares. He obviously hasn't ever seen the results of a long sustained buyback like Dillards, Next or Carmax. This will only end in one way and it will be glorious...

[louis brandeis] 14/3/2024 19:05

Not sure what your argument is.

[fenners66] 14/3/2024 19:00

Number of shares repurchased: 210,000
Date of transaction: 14 March 2024
Average price paid per share: GBp 1,746.929900
Lowest price paid per share: GBp 1,734.000000
Highest price paid per share: GBp 1,765.500000


And the share price fell 15.5p

But how can this possibly be ?
I have read marktime1231 and they have explained to all of us that the buyback has started and therefore the price has risen.
The only explanation of how the price has risen and QED the share price must rise if they are buying back shares.

BUT the opposite has happened.

What can this mean?

It can only mean that marktime1231 .... has it .....wrong.
Oh my world has caved in !
I so much wanted to believe the only way was up.
And now that belief , that one piece of tangible reality (with evidence ) has been shattered !

[marktime1231] 14/3/2024 13:20

A final observation on this since we ought to get back on to IMB.

BATs disposal of its ITC stake was at a 7% discount to the market price, which has held firm. Net proceeds of about £1,560M and the effect of promising to put it towards buybacks over two years has caused a 4% jump in share price which has stuck so far.

Altria also at it, disposing around $2B of its ABInBev stock it says primarily for additional share repurchases. Except in this case Altria is so far unmoved, perhaps waiting for a firm buyback announcement, while ABI has tumbled 4%.

[marktime1231] 12/3/2024 12:44

Further evidence about the effect of buybacks from BAT which surprised me a little. Not surprised that they are selling off the limited amount of ITC stock which they are free to divest, but I am surprised that they have committed all the proceeds to a buyback. Those of you fundamentally opposed will no doubt be furious, but somewhat cheered by the share price response.

It smacks of desperation by Marroco, trying to stop the rot in BATs share price and respond to IMB / market pressure. But it has done the trick, a 3-4% rise since the rumour was outed yesterday afternoon, I suspect 3% will stick for a while. How is the ITC share price responding, where BAT will retain a 25.5% stake, and how much does this reduce future income / cash flow / profit by?

Total proceeds of about £1,700M from a 3.5% ITC stake sale? £700M immediately committed to buybacks and it reads like the remaining £1B next year. Equivalent to about 3% of BAT mkt cap. Which is pee-ing in to the wind compared to IMBs programme.

Which leaves BAT looking to free cash flow to continue to pay down debt to its modest target range of 2-2.5x ebitda. Which means it has to direct most of it to debt reduction for another 3 years or so. Not much for real dividend improvement nor for sustainable buybacks unless its finds other family silver to sell off.

I remain much happier invested in IMB rather than BAT.

[marktime1231] 11/3/2024 12:54

Further direct evidence of the effect of buybacks on the share price of an unloved underpriced stock in a mature contracting market. The announcement that the second tranche has been brought forward a few weeks and the job given to Barclays Capital instead of MoSt. We already knew this was coming but we still got an immediate 2.5% kick up this morning, on a day when BAT is down because that is the general direction and because BAT still needs to prioritise debt reduction before it can sustain a buyback programme of its own.

QED

You might extrapolate further by observing that BAT is down 25% over a year whereas IMB is down "just" 15%, those trends the consequence of the regulatory and economic backdrop.

If you do not understand this, do not want to understand this, you never will.

FYI the rns reports on share transactions at the end of each tranche provide a progress report:

Oct 2022 tvr 950.1 million. The first buyback year removed 52.1 million shares, the first 6 months of the current programme removed another 30.3 million. I think the average buyback price has been in the low 18s.

As Bomhard set out in his strategic plan the benefit of stronger finances and capital reduction is now beginning to filter through with a 5% dividend improvement, despite flat to slowly declining revenues.

[tuftymatt] 11/3/2024 09:15

Will it be enough to draw a support line at circa 1700??

Good luck all 👍🏻

[jrphoenixw2] 11/3/2024 08:59

Nice if they disclosed how much the 1st $500m buy-back reduced the share cap