Resolution Share Discussion Threads

[al101uk] 15/8/2012 15:25

Barclays Analyst given Resolution a slating with the following comments that I found amusing...

"Resolution doesn't have a short-term catalyst to make us want to buy the shares. But at half the embedded value, the shares are too cheap to sell."

"The underlying life company will turn around in due course but in the meantime, we see no need to own the stock," Mr. Ryan said, keeping his sell rating on the stock.

Ignoring the sell rating on a share he thinks is too cheap to sell, will revalue and is holding in his portfolio... he doesn't consider a 10% dividend reason to hold the shares while he awaits his expected revaluation.

Think I'll steer clear of Barclays investment advice.

[cwa1] 15/8/2012 11:40

Resolution Balance Sheet Surprisingly Strong -RBC

0724 GMT [Dow Jones] Resolution's (RSL.LN) balance sheet is stronger than expected for 1H, says RBC Capital Markets. Adds Resolution has grown the dividend by 5% and says that the full year payout will grow by the same amount. Notes the group has published its economic capital surplus for the first time, coming in at GBP3 billion - significantly above expectations. Says the UK regulator has developed a prudent approach to capital retention. Adds Resolution has confirmed it will not undertake any further acquisitions. Still, says dividend yield of 9.6% (2013E) prompts the question of sustainability. Rates at outperform. Shares trade 7% higher at 235p.

Resolution +6.5% After 1H Update

0721 GMT [Dow Jones] Resolution (RSL.LN) +6.5% at 234p, topping the FTSE 100 leader board after its 1H update. Barclays says the update has addressed the key investor concerns and Resolution has simplified its governance structure to be more conventional. "It has in effect decided to behave like a 'normal' UK Life company," says Barclays. Says this changes the way that investors will view the company, with much greater focus on its operational performance. "We think this is the first step on a long journey to recreate the investment case for this stock." Has overweight rating and 365p price target.

[idle dreamer] 15/8/2012 11:30

At first glance these results don't seem too hot to me. I voted against the sale of Friends Provident and feel it has been a disaster. I still have the few shares I got at the time, but have now gone short with a spread bet expecting a gap fill at the very least.

[scburbs] 15/8/2012 11:02

Dividend up (rare in such a high yielder), final divi set to be up too, MCEV solid (£4.27/share - still a massive discount of well over 40%) and strategy finally heading in a sensible direction (I think the share price has suffered from the strategic randomness). Returns on capital aren't great, but it is a low return environment and you can buy those returns at a massive discount anyway making them more effective from the current share price.

Time for the share price to return to £3+?

[dashton42] 15/8/2012 08:04

The market initially seems to like the results and strategy rejig, anyway

[cwa1] 15/8/2012 07:42

Results out:-



A lot in them to digest but the are a lot of people will be looking at I guess:-

- Available shareholder cash of (GBP)619 million has also been impacted by lower returns but maintains a (GBP)400 million prudence buffer and underpins longer term confidence in the dividend
-- Interim dividend raised by 5% to 7.05 pence per share, supported by underlying cash generation from operational improvements and a robust balance sheet
-- The Company envisages moving to a progressive dividend and will consider doing so when sustainable cash generation meets its (GBP)400 million per annum distributable cash target

and

Mike Biggs, Chairman of Resolution Limited, said:
"Despite the ongoing market and regulatory uncertainty, the underlying business continues to make good operational progress in line with the clear strategy and value agenda of the Company. With the acquisition phase ended and to avoid the expectation of a specific exit event and time, the Board and ROL believe that now is the right time to agree to end the Operating Agreement between them and move to a more conventional governance and operating structure for the Company.
The Company will continue to deliver against the value philosophy and financial discipline under which it was founded by The Resolution Group which will remain as a supportive shareholder."

[al101uk] 08/8/2012 10:58

You might be on the wrong site, investors site it here:

[al101uk] 08/8/2012 10:55

It was on the Resolution website, in with all the annual results and investor presentations. You get the pdf link and a webcast link to the right of it.

I've been reviewing my portfolio recently and this is by far my worst performer, so had quite a close look at them, I think there's plenty of value to be extracted here and I think they are in a great position to start doing that. Looking forward to holding a good income producing stock for a good few years... although I was hoping for a smoother transition from growth to income :-/

I don't even mind splitting the business in to separate vehicles, but I do understand the drop in share price given the upheaval in the company at the mo... don't agree with it, but I understand it :-)

[itr7] 08/8/2012 09:26

Hey thanks for the link - listened to it last night - very enlightening - couldn't find it on their website - where did you get it from?

[al101uk] 08/8/2012 09:03

Not any more, check out the presentation, we're in Value Delivery mode now... Life Insurance is ex-growth... it's all about returning cash to shareholders.

[itr7] 07/8/2012 16:39

That was the original idea - Mr Cowdrey was going to fix the financial services market

[itr7] 07/8/2012 16:35

through acquisition

[al101uk] 07/8/2012 16:12

Aggressive growth?

[itr7] 07/8/2012 11:41

So is the strategy of management clear to anyone? Trying for aggressive growth doesn't usually coincide with share buybacks

[warrensearle] 23/7/2012 18:49

It would be good news if they cancelled it and raised the divi instead but the fact they had to cut it to boost capital is the concern and why the shares fell

[kenmitch] 23/7/2012 16:55

Agree totally pineapple 1. It's good news that they aren't going to waste another £250 million on a pointless buyback.

With a dividend shareholders get real cash. With a buyback though they call it "a return of cash to shareholders" fact is it isn't!

Marks and Spencer "rewarded" their shareholders with a £2 billion buyback a couple of years ago all of them bought back around £4. The share price fell and has never been back to £4 yet. So shareholders got no cash at all from this so called "reward." It's weird that so few people cotton on to these FACTS.

With luck saving this £250 million will help them to maintain the dividend. If they can maintain it that should provide much more support for the shares than a big buyback.

That buyback followed by a dividend cut would probably have seen the share price go a good bit lower. So good for the Directors for abandoning it and how crazy that so many investors saw this as bad news instead of the good news that it is!

[warrensearle] 20/7/2012 18:27

Laugher you are correct .. Nothing has changed on the divi and I am sure they will do everything they can to avoid cutting it .. Cut the yield and everyone jumps ship I am sure they know this !!

[laugher] 20/7/2012 13:12

Don't think it's got anything to do with the dividend. This is what they stated in Nov 2011.


· commitment to cash returns and robust balance sheet:

- the £250 million buy-back announced on 7 June 2011 was completed on 26 October 2011. Resolution reaffirms its intention to return a further £250 million to shareholders in the first half of 2012 subject to the delivery of planned capital synergies expected to be delivered in 2011 and following regulatory approval;

So, presumably it's the proposed second return they are talking about cancelling.

In today's announcement they go as far as to say:

'The Company's dividend policy remains unchanged.'

So I don't think anything's changed there or am I missing something??

[warrensearle] 20/7/2012 11:33

Paid to wait if the divi is safe.... That's a big IF

[pineapple1] 20/7/2012 11:24

Its doing no worse than most of the poxy gold miners i invested in,and at least i get paid for waiting here.BAE has come good after a long wait....imho

[sawadee3] 20/7/2012 10:16

Would be ironic if Investecs 145 hit after all lol.

[zap217] 20/7/2012 09:17

Very ominous

[warrensearle] 20/7/2012 09:05

It's a pretty poorly written RNS it looks like divi cancelled until you read it properly... I too guess it means cancellation of share buy back... What return of capital was scheduled outside of divi??

[sawadee3] 20/7/2012 09:04

Looks that way, elliotset. Market not liking that news.