Resolution Share Discussion Threads

[al101uk] 19/3/2014 15:49

Margins on annuities will have to be cut to make attractive if nothing else, but other products will also have to take their place... Your pension pot still has to last potentially 30 years. Higher return generally means higher risk and potentially higher fees. Going to take some time for these changes to be worked through I guess, but I think its safe to say that the money won't just disappear... New market, new products, new money, new world.

[volsung] 19/3/2014 15:45

Anyway just doubled my holding

[volsung] 19/3/2014 15:43

Why oh why did I buy these this morning. LOL in a cavernous hollow way

[a0148009] 19/3/2014 15:33

Double whammy profit sharing and now changes to pensions have to wait and see
how they settle and what the experts think but it will certainly mean there will be less annuity business which is very profitable for the pension funds.

AO

[trader2] 19/3/2014 15:32

Note a significantly bigger hit on RSL - down 15% at the time of this post whereas RSA down 2%; SL. down 3% and PRU down 2.5%

[hvs] 19/3/2014 15:28

Oh Dear,

Not looking good.

[al101uk] 19/3/2014 15:24

The budget today announced that effectively you can do what you want with your pension, no more requirement to buy an annuity.

[silkywhite] 19/3/2014 15:22

can someone explain what is going on. What pension reforms. There is no RNS so what is happening.

[al101uk] 19/3/2014 15:11

Quick buy at 306... Could not resist, compare the fall to others in the sector.

[cwa1] 19/3/2014 15:08

Oh dear. Should have held off my return after being out for ages :-( Thanks George.....

[dutch123] 19/3/2014 15:01

holy furk...

[al101uk] 19/3/2014 14:32

Never saw those pension reforms coming, annuities a thing of the past... Wow!Should have held off on the top up.

[al101uk] 19/3/2014 10:14

Agreed I'd rather we didn't have the value shares and I hope some deal can be reached. My returns include dividends, I think the value shares were in the money when I bought fro memory.

[scburbs] 19/3/2014 08:41

al101uk,

The FT link is from discussions at the time about buying the value share out when it had no real value. They didn't do it and it will now bite any shareholders buying at these levels as 10% of anything RSL make is now effectively going to the ROL team. It was less of a drag at your buy price as the value share was out of the money at that level.

A company that has to give away 10% of its future growth in value in exchange for nothing is a very current issue IMV.

If you think about it over the long term, if the sustainable dividend yield for RSL is 6% then it would have been 6.67% without the value share.

Hopefully the board will take some steps to negotiate their way out of it as it is supposed to be reward for value being added (and to be added in future) by Cowdery and his team.

[cwa1] 19/3/2014 08:12

OK. Couldn't resist a return here. Dipped a couple of toes back in the water at 345, hopefully reasonable medium term value hereabouts. Fingers crossed and all that stuff!

[skinny] 19/3/2014 08:09

RBC Capital Markets Outperform 0.00 351.00 420.00 420.00 Retains

[al101uk] 18/3/2014 21:30

Can't read your FT link, but very old news scburbs. I remember soon after I bought in all of this being dragged up and discussed to death, I'm about 40% up since then. If it's not priced in already it never will be.

[scburbs] 18/3/2014 15:48

The Resolution value share looks set to give a wholly inappropriate pay out to the old external manager at some point. It was out of the money when the management was internalised, but is now in the money.

In the event that RSL makes an amount equal to the current market cap (i.e. c.£5bn) then as of 31 December the value share was worth £145.7m! There were discussions about removing this for c.£20m at the time of the management changes, but it was left in place. At the share price peak of c.380p the value share was worth £185m. The value share is the original management teams reward for exceeding a paltry 4% shareholder return target!

This leaves a ridiculous situation where Cowdery and the other members of the Resolution Operations LLP will benefit from 10% of any value growth in excess of 4% p.a. despite Cowdery having stepped down. This is a real value drag for other shareholders.

"Total gross equity deployed in RHN1 is approximately £4,056 million and the accumulated value of net equity deployed (at 4% per annum and after the return of £1,066 million of capital returned to the Company to date) is approximately £3,543 million as shown below."



"Resolution is also expected to seek to cancel a so-called "value share" that ROL holds in the listed company.

This complex agreement entitles ROL to 10 per cent of the shareholder returns – above a certain threshold – that Resolution generates from its acquisitions of Axa's UK life business and Friends Provident.

...

They calculated the value share was worth £31m in present terms but added that a sum of about £20m would "likely be more palatable" to Resolution's shareholders."

[scburbs] 18/3/2014 11:32

Anyone after a progressive dividend in the sector might want to take a look at PHNX. Last 12 months dividend at 53.4p for a 7.2% dividend yield at 740p. They have negotiated arrangements with the lending banks (gearing is materially higher than RSL) to allow for increases of c.10% p.a.

Results due next week, 26 March.

[p49b] 18/3/2014 11:23

Dont think the market is impressed with no dividend increase, while the yield is still good one likes to see progress.Also the wording in the statement
· Progressive dividend to be considered when sustainable free surplus coverage of the ordinary dividend exceeds 1.3 times, is not very bullish,when the word "considered"is used. RSL may fall here until the divi is on up trend.

[nigelmoat] 18/3/2014 11:08

Amazing! 6% yield at current share price with future increases in dividends proposed.