I remember the previous rights issue
was around the 12th of January at 35p.
In February I was able to buy many more at 31.4p.
Such seems to be the nature of rights issues - IMO |
You get caught for IHT in the spouses death though |
No IHT though if left to a spouse. |
Guys - whatever is held in the SIPP is subject to IHT wef 2027, depending upon the results of the consultation. Doesn't matter what the assets are including AIM shares.Even assets that will still qualify for a 100% IHT exemption such as shares in a private limited company worth less than £1m will be subject to IHT if held in a pension.Although a pension is a type of trust, the rules are wholly different.Hope this helps. |
LaV - In our exchange at #15121-#15127 we seem to have slightly lost sight of C5's original question at #15120. Namely, if I may rephrase it: Assuming that from 2027 SIPPs and most other pension funds will be subject to IHT calculated on the notional basis that they form part of the deceased's estate (or fall to be added to it, if you prefer), will AIM stocks held within such funds be eligible for the same IHT treatment as those held by e.g. the deceased personally - namely 50% discount (making an IHT charge of up to 20%) provided held for over two years? Would you agree that the answer must surely be yes, given that anything less would discriminate unreasonably against pension funds as compared with other IHT payers?
(Let's not get into whether the proposals are discriminatory in themselves - that's a whole other debate....) |
I’ve had a few more as well, but given the mood of the market and frequent post-placing share price behaviour and results coming, have saved a chunk for 30p. Probably got too many from ages ago so if it doesn’t get down there, so be it. |
AE. Very well said ref. 'Given the relatively small extra'.
Done exactly that during the day as a meaningful amount of shares will not be possible unless you have very large holdings and even then it would be a very small amount by comparison @ 3448 per 100k shares held if at 1 for every 29.
This thought process certainly made me bite the bullet and increase my holding before the details are released, as we may see more buying action then as investors realise the small amounts they can apply for at 35p will not amount to much.
You can still also apply for your fair share when the time comes but you wont need to rely too much on it, so it can be regarded as a little top up perhaps. |
AE
As pidazzle pointed out, it would be about 1 new share per 29 existing if done pro rata, so small regardless of any preferential treatment.
But when you really think about it, £7.5 million is small compared to any reasonable estimate of what the peak working capital outflow might be on this Kuwait contract (excluding the bond). I suspect that they think that the cash inflows from the other two can cover the difference. Remember that they expect also to cover some of the bond in six months from their own resources. UKEF generally cover 80%, so that would be some $4 million.
In whatever document they produce for this, some of this may be made clearer. I suspect not as much as usual, until the results are out and even then the broker seems to want to wait until the other contracts have the green light before issuing forecasts. I suppose they might be hoping for those green lights before 2nd December? |
I tried doing what C5 suggested and rang Cavendish to ask some questions about the mechanics of this fund raise. I asked to speak to Johnny Franklin Adams who I think is the man dealing with it. I was told he wasn't answering his phone and was offered a call back. I haven't yet had that.
Given the relatively small extra, I think buying in the market may be a better bet as you have at the very least, the ability to decide how many shares you want to buy. If we do see a rerating in due course a few extra pence now will pale into insignificance.
The question of which account to use doesn't arise for me as I have very little not in an ISA. For the moment, CGT doesn't have to be factored in but I don't trust this Government to leave it that way if they find they need yet more to fund the unproductive public services, their pensions and powerful union members. |
Trouble is that being sophisticated nowadays just involves pressing a buy button. |
When is the placing going to take place? I suspect that folks will have to react quickly following a RNS which will give details of how to take part. I also suspect that the majority of the shares will end up in 'sophisticated investors hands. |
I think I’ll retrain as a finacial adviser. Kerching! |
pidazzle
No I don't mean that they will not tax it. If they follow the life interest model, the SIPP would have to bear the IHT charged on the asset value, despite its legal status as a discretionary trust. |
LaV - you are of course right that SIPPs do not form part of your estate in the sense that they can't be bequeathed by will. But that doesn't mean that the Govt can't seek to charge IHT on them on your death, although implementation of that is clearly going to be complicated.
At all events the general view seems to be that, while SIPPs don't form part of your estate now, they will do so (at least for IHT purposes) - or perhaps, will be deemed to do so - from 2027. See e.g. this discussion:
I fully accept that we are in a consultation phase and, therefore, that it may never happen (or at least not in the form envisaged): but that is the perceived reading of what is intended.
Edit. Have seen the edit note in your last posting, and am now confused as to whether or not we are still at cross purposes. Are you still suggesting that the SIPP won't (as the Budget suggests) be subject to IHT on the beneficiary's death? |
Mike should have said 'sadly Andrew it doesn't matter what it says in your will, your SIPP does not form part of your estate.'
I don't know what rules your expert is allegedly working through as there aren't any. It is in a consultation phase.
Edit. I saw your added comment. The value of the SIPP will be added to your estate. The SIPP itself will not form part of it. |
 LaV - You write "... the SIPP itself is not subject to IHT". But surely that's exactly what it will be from 2027!?
Mike Warburton [well known tax expert] writes in the Daily Telegraph:
"What should we do to prevent our children from having to pay inheritance tax?
Reader Andrew Murray has a question for Mike on the impact of inheritance tax.
Andrew says: “My wife and I’s self-invested personal pensions (Sipps) will (as our Will stands now) be passed equally to our son and daughter. As things are, as far as we know, they will not pay IHT on the money if and until they draw on them, if they don’t, they can pass them on to their children IHT free. Under the new Budget rules, we understand that they will have to pay IHT on all the money they inherit. I am 84 and my wife is 83, what should we do now?”
Mike replies: “Sadly Andrew, your children will probably be left with double taxation. Depending on the value of your other assets your executors will have to pay IHT on the value of your Sipp at death and your children will then have to pay income tax on any amounts drawn. The rules on how this is all supposed to work are absolutely horrendous. I am still working my way through them.” "
Are we at cross purposes? |
pidazzle
Not really discriminatory at all. What I meant was that there is no tax on assets inside a SIPP, so the SIPP is not itself subject to IHT.
If you would look at the current IHT taxation of a life interest in a trust (and SIPPS are probably the largest class of trust now extant), AIM holdings are valued at market value and added pure and simple to the IHT value. Similarly with periodic charges. |
LaV - I don't think C5 suggested there was CGT in a SIPP? Clearly the total value of the SIPP will be liable to IHT, as you say - but, although we have yet to see the whites of the legislation's eyes, I would be amazed if the same 50% discount for AIM stocks held for over 2 years (so = 20% IHT) did not apply equally to SIPPs* as to individuals and any other holder. Surely anything else would be gratuitously discriminatory.
-- *and indeed to all pension funds, although many aren't permitted to hold AIM stocks anyway.
C5 - please can you explain what is a PLU - people like us?? On my calculations the entitlement should be approx 3.4% = roughly 1 for 29: that's assuming all shareholders other than OI will be treated equally, though I'm aware that some have suggested otherwise. |
C5
There is no CGT in a SIPP, nor any other tax. The total value of the SIPP will be liable to IHT, regardless of what is in it.
I actually think they should have gone the whole hog and introduced CGT on death, subject to the usual reliefs on primary residence etc, and abolished IHT entirely. |
Assumptions:-
1. Share price depressed by thought of shares available at 35p. Most of these go to O I. PLU's will only be offered 1 for existing 20. 2. Systems contracts are priced at 25 to 30 % margin after ALL costs, including generous slice of company overheads. Kuwait allows for $13 for O I content. This is a luxury for Kuwait but it is meant to impress Saudi neighbours. 3. $40 million of Kuwait covers 10 year maintenance which leaves 25% of $160 going straight to bottom line, over two years. 4. Bahrain, Saudi and Indonesia only waiting for final signature.
Interesting recent Budget question:-
AIM stock held for two years will now pay IHT at 20%.
Pension value for death after age 75 becomes part of inheritance and higher values charged at 40%.
How are AIM shares held in SIPP at death after age 75 charged for IHT? 20% or 40%? |
I thought they would be issuing the paperwork promptly. For an EGM, which they will need to call, there has to be a minimum of 14 days plus (at least) the day of notice (if by website) and the day of the meeting. So if they call it tomorrow, the earliest it can be is 20th November. |
OI will know way more than the brokers: they’re more likely to be influencing what the brokers say. I don’t think there is any way of guessing margins or valuation. PE could be within a massive range, because a high margin is combined with high risk as its contracting.
Imo the value is in the moat and any IP and that could lead to a multiple of revenue as a valuation instead of earnings, whatever the broker happens to say.
If any US businesses are looking, they’ll be trying to figure out how much of maritime defence they could own in 10 years, not looking at next years forecast.
I think this is firmly in the area of being valued by the market and external interest. The forecasts might be just reassurance about base value. |
The much awaited broker's note will be analysed in detail by some shareholders, but also by Ocean Infinity, Airbus, Leonardo and others. The margins achieved by the company, and therefore the applied PE, will provide the base for valuing the company. A company earning high margins on contracts merits a high PE. I will be very surprised if the note states the operating margin which SRT applies to its contracts. I believe that SRT recognises that, not only does it have a better system than its potential competitors, but it can deliver results at a much lower cost, because it uses less satellite data. This forecast will be unique because the figures will be based on many known milestones. I also suspect that this forecast will under estimate the eventual results for the year ended June 2025. SRT will want to become known for being the company that over delivers on forecasts, rather than the other way around!! I am assuming that every cost has been accounted for in pricing contracts, (management time, flights, hotels, transport, ALL costs over eight years for Kuwait, and including a major slice of overheads. They will then apply a profit margin which goes straight through to the bottom line. I have applied 25% margin to give a year end forecast of between £25 and £35 million. Obviously there are unknowns, especially on the transceivers side of the business. I suspect that OEM sales might have been a little slower because boat sales might have been weaker due to the global recession. On the other hand EMTRAK sales may well have compensated, especially in the US where we have a good sales rep. DAS has very good margins and large orders will surely come but timing is unknown. NEXUS sales are much anticipated, but sales, as yet, are an unknown. AIS components are now readily available with reduced prices. However, SRT raised prices when there was a global shortage and I suspect that the higher sale prices have been retained, resulting in higher margins. I believe that when these figures are researched the market will award the company a forward PE of at least 20. This is a fast expanding company in a high tech industry which is clearly a global leader in its field with the Warren Buffet 'economic moat'. Don't under estimate your SRT shares!! I am also assuming that the company will be able to increase its margins on future contracts. |
AE. Why don't you speak to Cavendish and inquire if your allocation of shares can be placed where you have cash? I suspect that will be the case but others on this board would value hearing what he said.
I imagine that in the next few days Cavendish and Mr T will decide where and how to allocate the 7.5 million shares at 35p. If one assumes about 1 share for every 25 held, they could approach all of the major shareholders (including Ocean infinity?) and ask if they want their allocation and also ask if they would like a few more if some are not allocated. I suspect that holdings of less than 100,000 shares would be considered too small for the administration involved.
Bottom line is that Mr T and Cavendish make the decisions and no one else will learn the final allocations.
I suspect that Bahrain, Saudi and Indonesia will be up and running by the time that the fundraising process is completed. We will then have the much awaited brokers note giving very firm figures for the December half year and the June 2025 year end. We know that Indonesia and Saudi are ready to deliver early and substantial mile stones, including high margin data centres, hopefully well in time for the December figures. If Kuwait data centres can be delivered before June there will be some eye popping figures in the forecast (£25 to £35 million pbt?) £350 million market cap?
PS. METS Amsterdam November 19 to 21 |
No doubt from pulling his hair in frustration ' I can relate!
Hopefully , he'll be sporting a bouffant growth again soon.
'Turkey', though...hmmm!
Don't they have a long coastline..and some 'challenging' neighbours?
Maybe a visit there would be on shareholder-related matters!
GLA |
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