IDP's HYP as of 26 May 22.

[idpickering]

Good afternoon all. I last put my HYP on this board on 11 Mar 22 here; viewtopic.php?p=485721#p485721

Since then I've topped up my Phoenix Group Holdings, Persimmon, and Unilever holdings. Yesterday I bit the bullet, and taking advantage of a no commission dealing offer from Halifax, sold my Tate & Lyle shares, replacing them with HSBC. tbh, I was glad of the added diversification.

Consequently, my HYP now looks like this, shown in capital value weighting terms; (nb, I don't use the HYPTUSS item).

Share                                  Weight
BAE Systems                             5.5%
British American Tobacco                5.3%
Legal & General                         5.0%
BP.                                     4.8%
Shell                                   4.8%
National Grid                           4.6%
SSE                                     4.5%
Admiral Group                           4.2%
Persimmon                               4.2%
Phoenix Group                           4.1%
M&G                                     4.1%
Rio Tinto                               4.1%
Greencoat UK Wind                       3.8%
Primary Health Properties               3.8%
AstraZeneca                             3.7%
Unilever                                3.6%
Vodafone                                3.2%
United Utilities                        3.2%
IG Group                                3.1%
Tritax Big Box                          3.0%
HSBC                                    3.0%
LXI                                     3.0%
Sainsbury                               2.8%
Schroders (non-voting)                  2.7%
The Renewables Infrastructure Group     2.6%
HICL                                    2.6%
Tesco                                   2.5%
Diageo                                  1.8%
Average                                 3.5%

The law of ish applies.

Your comments are invited.

Ian.

[MrFoolish]

What was wrong with Tate & Lyle?

[MDW1954]

Yesterday I bit the bullet, and taking advantage of a no commission dealing offer from Halifax, sold my Tate & Lyle shares, replacing them with HSBC. tbh, I was glad of the added diversification.

Ian.

I was a bit puzzled by this. When last you posted your HYP, financials made up 23.2% of it. You've since switched TATE to HSBC, and financials are now 26.2%.

So I'm not really seeing the "added diversification".

OK, so I've got Covid. But I really don't think that I'm that addled.

No issues with disposing of TATE, given its change of strategy. And granted, HSBC is cheap, with a dividend that looks sure to increase.

But "added diversification"? I don't get it.

MDW1954

[idpickering]

Yesterday I bit the bullet, and taking advantage of a no commission dealing offer from Halifax, sold my Tate & Lyle shares, replacing them with HSBC. tbh, I was glad of the added diversification.

Ian.

I was a bit puzzled by this. When last you posted your HYP, financials made up 23.2% of it. You've since switched TATE to HSBC, and financials are now 26.2%.

So I'm not really seeing the "added diversification".

OK, so I've got Covid. But I really don't think that I'm that addled.

No issues with disposing of TATE, given its change of strategy. And granted, HSBC is cheap, with a dividend that looks sure to increase.

But "added diversification"? I don't get it.

MDW1954

Fair comment Malcolm. Ok, HSBC are a financial, but they are a bank, and I didn’t have one on board. So I went for it. As for TATE, I dropped it for the reasons you mentioned, and ditto re my having bought HSBC. Now it’s on board I shall look to diversify elsewhere going forward. I hope you get better re Covid.

Ian.

[Arborbridge]

No issues with disposing of TATE, given its change of strategy.


Can someone get me up to speed on this? What is it that makes TATE "non-HYP" now, when it was OK previously?

I know the yield isn't great, but it's not down in the basement, and it's above some other historic HYP shares I own. Tate has always been the sort of boring share which causes no trouble: moderate yield with a TR better than my average. So what's changed so drastically that it's worth swapping for a bank which has arguably been a worse performer?

Thanks,

Arb.

[MDW1954]

No issues with disposing of TATE, given its change of strategy.


Can someone get me up to speed on this? What is it that makes TATE "non-HYP" now, when it was OK previously?

I know the yield isn't great, but it's not down in the basement, and it's above some other historic HYP shares I own. Tate has always been the sort of boring share which causes no trouble: moderate yield with a TR better than my average. So what's changed so drastically that it's worth swapping for a bank which has arguably been a worse performer?

Thanks,

Arb.

From the Circular to Shareholders:

As detailed in the announcement of the Transaction on 12 July 2021 and the shareholder circular seeking approval for the Transaction as published on 13 September 2021, the Transaction repositions Tate & Lyle as a growth-focused speciality food and beverage solutions business and the Board continues to recognise the importance of the dividend to total shareholder returns. In light of the Completion of the Transaction, it is intended to reduce the dividend to reflect the earnings base of the re-focused Tate & Lyle. The pay-out ratio (excluding any earnings from the business subject to the Transaction) is expected to be maintained and the dividend per share reduced by around 50 per cent., before the impact of the Share Consolidation.

MDW1954

[Arborbridge]

No issues with disposing of TATE, given its change of strategy.


Can someone get me up to speed on this? What is it that makes TATE "non-HYP" now, when it was OK previously?

I know the yield isn't great, but it's not down in the basement, and it's above some other historic HYP shares I own. Tate has always been the sort of boring share which causes no trouble: moderate yield with a TR better than my average. So what's changed so drastically that it's worth swapping for a bank which has arguably been a worse performer?

Thanks,

Arb.

From the Circular to Shareholders:

As detailed in the announcement of the Transaction on 12 July 2021 and the shareholder circular seeking approval for the Transaction as published on 13 September 2021, the Transaction repositions Tate & Lyle as a growth-focused speciality food and beverage solutions business and the Board continues to recognise the importance of the dividend to total shareholder returns. In light of the Completion of the Transaction, it is intended to reduce the dividend to reflect the earnings base of the re-focused Tate & Lyle. The pay-out ratio (excluding any earnings from the business subject to the Transaction) is expected to be maintained and the dividend per share reduced by around 50 per cent., before the impact of the Share Consolidation.

MDW1954

Thanks Malcolm. I see it all now! TATE does seem to have made itself a "sell" on that basis, which rather goes against my normal "do as little as possible" approach.

Arb.

[kempiejon]

Thanks Malcolm. I see it all now! TATE does seem to have made itself a "sell" on that basis, which rather goes against my normal "do as little as possible" approach.

You can still do as little as possible, I'll take the return of cash and consolidations and redirect the released money. Yeah the newer TATE might have a lower yield and be excluded from more money but it went through a period of exclusion in my HYP when the dividend was static for a couple of years.

[idpickering]

No issues with disposing of TATE, given its change of strategy.


Can someone get me up to speed on this? What is it that makes TATE "non-HYP" now, when it was OK previously?

I know the yield isn't great, but it's not down in the basement, and it's above some other historic HYP shares I own. Tate has always been the sort of boring share which causes no trouble: moderate yield with a TR better than my average. So what's changed so drastically that it's worth swapping for a bank which has arguably been a worse performer?

Thanks,

Arb.

From the Circular to Shareholders:

As detailed in the announcement of the Transaction on 12 July 2021 and the shareholder circular seeking approval for the Transaction as published on 13 September 2021, the Transaction repositions Tate & Lyle as a growth-focused speciality food and beverage solutions business and the Board continues to recognise the importance of the dividend to total shareholder returns. In light of the Completion of the Transaction, it is intended to reduce the dividend to reflect the earnings base of the re-focused Tate & Lyle. The pay-out ratio (excluding any earnings from the business subject to the Transaction) is expected to be maintained and the dividend per share reduced by around 50 per cent., before the impact of the Share Consolidation.

MDW1954

Thanks Malcolm. I see it all now! TATE does seem to have made itself a "sell" on that basis, which rather goes against my normal "do as little as possible" approach.

Arb.

Ditto re the thanks to Malcolm. He beat me to it with regards to replying to your post, for which I thank you too also.

In that sector I’m happy to stick with just having ULVR on board, and might be buying more of the share soon.

On 15 Jun 22 I’m buying a smallish amount of Persimmon to get in before the ex div date for their special dividend the next day. Thereafter that’ll be it for them for now at least.

Ian.

[idpickering]

Not that it matters much, but I have to correct myself. The investment into more PSN is on 09 Jun 22, not 15 Jun 22 as I said above.

Ian.

[Arborbridge]

On 15 Jun 22 I’m buying a smallish amount of Persimmon to get in before the ex div date for their special dividend the next day. Thereafter that’ll be it for them for now at least.

Ian.

Ditto to that - except that my topup of PSN was last week. Shortage of cash prevents further topup in that account, but PSN is providing 4.7% of income so quite a bit dose.

[idpickering]

On 15 Jun 22 I’m buying a smallish amount of Persimmon to get in before the ex div date for their special dividend the next day. Thereafter that’ll be it for them for now at least.

Ian.

Ditto to that - except that my topup of PSN was last week. Shortage of cash prevents further topup in that account, but PSN is providing 4.7% of income so quite a bit dose.

Thanks for your input Arb. Tbh, it’s nice to know I’m in good company on this one. Cheers.

Thereafter, I’m looking at topping up my lower weighted, but higher yielding holdings. We’ll see nearer the time. Maybe a newer option might be in the offing by then?

Ian.

[Dod101]

No issues with disposing of TATE, given its change of strategy.


Can someone get me up to speed on this? What is it that makes TATE "non-HYP" now, when it was OK previously?

I know the yield isn't great, but it's not down in the basement, and it's above some other historic HYP shares I own. Tate has always been the sort of boring share which causes no trouble: moderate yield with a TR better than my average. So what's changed so drastically that it's worth swapping for a bank which has arguably been a worse performer?

Thanks,

Arb.

From the Circular to Shareholders:

As detailed in the announcement of the Transaction on 12 July 2021 and the shareholder circular seeking approval for the Transaction as published on 13 September 2021, the Transaction repositions Tate & Lyle as a growth-focused speciality food and beverage solutions business and the Board continues to recognise the importance of the dividend to total shareholder returns. In light of the Completion of the Transaction, it is intended to reduce the dividend to reflect the earnings base of the re-focused Tate & Lyle. The pay-out ratio (excluding any earnings from the business subject to the Transaction) is expected to be maintained and the dividend per share reduced by around 50 per cent., before the impact of the Share Consolidation.

MDW1954

Thanks Malcolm. I see it all now! TATE does seem to have made itself a "sell" on that basis, which rather goes against my normal "do as little as possible" approach.

Arb.

HYPers! I do not understand. Surely it is the yield at which it settles that matters not a reduction in the cash dividend? If it reduces the size of the business the cash dividend is going to drop, but so presumably is the share price, until the share consolidation of course, which is just a bit of financial engineering to make it look better, an indulgence in kidology actually.

Dod

[Arborbridge]

No issues with disposing of TATE, given its change of strategy.


Can someone get me up to speed on this? What is it that makes TATE "non-HYP" now, when it was OK previously?

I know the yield isn't great, but it's not down in the basement, and it's above some other historic HYP shares I own. Tate has always been the sort of boring share which causes no trouble: moderate yield with a TR better than my average. So what's changed so drastically that it's worth swapping for a bank which has arguably been a worse performer?

Thanks,

Arb.

From the Circular to Shareholders:

As detailed in the announcement of the Transaction on 12 July 2021 and the shareholder circular seeking approval for the Transaction as published on 13 September 2021, the Transaction repositions Tate & Lyle as a growth-focused speciality food and beverage solutions business and the Board continues to recognise the importance of the dividend to total shareholder returns. In light of the Completion of the Transaction, it is intended to reduce the dividend to reflect the earnings base of the re-focused Tate & Lyle. The pay-out ratio (excluding any earnings from the business subject to the Transaction) is expected to be maintained and the dividend per share reduced by around 50 per cent., before the impact of the Share Consolidation.

MDW1954

Thanks Malcolm. I see it all now! TATE does seem to have made itself a "sell" on that basis, which rather goes against my normal "do as little as possible" approach.

Arb.

HYPers! I do not understand. Surely it is the yield at which it settles that matters not a reduction in the cash dividend? If it reduces the size of the business the cash dividend is going to drop, but so presumably is the share price, until the share consolidation of course, which is just a bit of financial engineering to make it look better, an indulgence in kidology actually.

Dod

The yield seems to have dropped - but I'm happy to wait and see. However, they do talk about re-focusing the business to a growth model and the dividend being reduced. On the face of it, isn't that a red flag to a HYPER, or is it just badly written or being misunderstood by MDW?
As regards the share price, it's about the same as it was a year ago.

Arb.

[Dod101]

Not being a HYPer or a holder of Tate and Lyle, it does not matter to me. If they are to go into growth mode that would suggest that the dividend will drop in importance but it seems to me that Tate and Lyle has been so difficult to read for the last few years that I would not be attracted to it anyway.

Dod

[Arborbridge]

Not being a HYPer or a holder of Tate and Lyle, it does not matter to me. If they are to go into growth mode that would suggest that the dividend will drop in importance but it seems to me that Tate and Lyle has been so difficult to read for the last few years that I would not be attracted to it anyway.

Dod

Having started a hare running, it seems to me you are rather dodging the question

I believe MDW was drawing attention to the fact that a growth focused company may no longer be a HYP company.

Arb.

[Dod101]

Not being a HYPer or a holder of Tate and Lyle, it does not matter to me. If they are to go into growth mode that would suggest that the dividend will drop in importance but it seems to me that Tate and Lyle has been so difficult to read for the last few years that I would not be attracted to it anyway.

Dod

Having started a hare running, it seems to me you are rather dodging the question

I believe MDW was drawing attention to the fact that a growth focused company may no longer be a HYP company.

Arb.

Yes I think the lack of many other postings has got me into this. I agree that in principle an announcement that an investment is going to concentrate on growth probably discounts it as a HYP investment. I will keep an eye on it and see how it develops because I am usually attracted to a share that goes for growth along with even a relatively modest dividend. We'll see.

Dod