Sylvania Platinum Share Discussion Threads

[stemis] 12/5/2023 20:38

Bought back shares aren't included in the EPS calculation, whether they are cancelled or not.

[bountyhunter] 12/5/2023 19:45

#7839 They don't need to hold shares in treasury to do that. They can simply issue new shares e.g. rights issues and offers to existing shareholders to raise capital. Imv it's always good to see bought back shares cancelled to improve eps rather than held on to.

[justiceforthemany] 12/5/2023 16:39

With further expansion, process optimisation and dividend potential as well as a share buyback programme, we continue to consider that a comfortably above 150p share price, which would currently equate to a $500 million plus market cap, is justifiable. Still a value and income.
Buy.

[justiceforthemany] 04/5/2023 23:57

Cash adjusted P/E of just 4
Edison target price is double current SP

[wooster4] 04/5/2023 21:26

WSm If shares are purchased back in the market, held in treasury and reissued at a higher price then company is a winner

[bountyhunter] 04/5/2023 20:32

Absolutely WsM812, I was about to make the same point.

[soilderboy] 04/5/2023 18:30

No, you mean investment into the business to increase profitability, I presume. If so, I agree.

[stemis] 04/5/2023 14:04

New note out from Edison. Forecasting 6p dividends for 2023 which, since they paid 3p at the interim, would mean a final of 3p. That's quite a drop from 6p implied by their "interim dividend equating to one third of the forecast full dividend", although probably in line with "Dividend Policy will be able to pay out a minimum of 40% of adjusted free cash flow for the financial year".

[wsm812] 04/5/2023 08:14

This is the key line for me "all Ordinary Shares purchased will be cancelled." Not held in treasury like some other buybacks.

[haywards26] 03/5/2023 16:31

IMO Buybacks are very subjective and many variables impact whether they are a good use of company funds or not (financial performance of entity, debt levels, dividend yield, share price level etc). It is easy to see in hindsight whether a buyback was a good idea, but very difficult to gauge at the time.

I can't see anything other than it now being a good time for SLP to carry out a buyback program, given the recent share price fall, robust financial performance and dividend pay out yield etc. The cancellation of the shares and not having to pay the approx 9% divi out on these shares is a good use of funds..

As a comparison a company completing a buyback program at share price highs is likely to be seen as a poor decision and not a good use of company funds. In very simplistic terms

[scubadiverr] 03/5/2023 12:31

Then the share price would fall by the corresponding amount and perhaps more later due to the company not having the same contingency buffer. Buy backs, while not ideal, are the best option for long term holders

[the_isolator] 03/5/2023 12:18

Not sure buybacks are such a good idea wouldn't a one off special dividend have been better if they have spare cash to use

[zangdook] 03/5/2023 11:49

The misunderstanding about buybacks is that their purpose is to increase the share price. If you once get that idea out of your head and see them for what they are, a way to increase each remaining holder's proportional interest in the company, then the "oh no, the share price has gone down" argument falls away, except if framed as "the share price has gone down so they could have waited and got them cheaper".

It may be, if there is selling pressure, that a buyback will help to reduce the effect on the share price by absorbing some of the overhang.

If you account for your investments as a share of a business, rather than as a number on a share certificate, you may see value in buybacks provided the company doesn't overpay (or reissue the repurchased shares as bonuses to directors).

[rabiddog] 02/5/2023 22:08

Yep exactly

[epicsurf] 02/5/2023 21:12

This is their usual strategy they have bought back at least 55 million shares since 2015

[stemis] 02/5/2023 20:36

The one thing it probably does is confirm that they aren't going to cut the dividend. To do that on the basis of saving money whilst at the same time buying back shares would be a pretty ridiculous thing to do...

[martinfrench] 02/5/2023 19:58

limited understanding of buybacks ?

what exactly is there to understand.

[rabiddog] 02/5/2023 18:07

All things being equal buybacks are the most efficient way(in particular from a tax perspective)of returning money to shareholders. You can pluck examples out of history but I can guarantee that “all things weren’t equal” for those examples. My original comment was also said with the full context of the current depressed share price.

[weatherman] 02/5/2023 16:43

I would rather have special dividend, or offer to buy back shares directly from all holders - not just to buy in the market.

[kenmitch] 02/5/2023 16:27

martinfrench

I won’t respond after this as you clearly have limited understanding of buybacks as have a lot of posters on the lower quality ADVFN bulletin boards.

For starters of course I wouldn’t claim that all lower share prices are related to buybacks? Of course they aren’t and that you can ask such a stupid question speaks for itself. Loads of shares fall that haven’t bought back at all.

And Whitbread for one is not a rubbish Company. They just made a mistake with their buyback decision. And on that WsM812 then made the erroneous claim that Companies only buyback if they think the share is undervalued. The sensible Companies like Next Do do that, but there are multiple examples of Companies buying back without considering that so important point.

Facts on share buybacks include:-

1. They reward those who want to sell as there is a willing buyer; the Company buying back their shares.

2. Buybacks increase eps.

3. Director bonus pay is quite often based on eps. So that’s a reason why sometimes Company bosses are so keen on them!

4. Buybacks reduce the number of shares in issue, so dividends, if paid are being paid out on fewer shares and so at less cost.

5. IF…as so many bb posters wrongly assume…..all buybacks = higher share price, all investors would have to do to guarantee share price gain would be to buy shares in those Companies. If only that WAS true.

Yf231

I had already pointed out that Next knew how to manage buybacks and that they’ve halved their share count as a result of them.

[yf23_1] 02/5/2023 16:26

Next have done well with buybacks

[wsm812] 02/5/2023 14:13

Buybacks will be good for shareholders if the company is and continues to be well-run. I believe SLP are, so must we all if invested.

Companies will only implement buybacks if they determine that the current share price significantly undervalues the company. I belive it does.

Buybacks increase the demand for a company’s shares: As a result, open-market buybacks automatically lift its stock price, even if only temporarily. I bought more on this reasoning alone.

GLA