Computacenter (CCC)

[MoVert]

I have Computacenter in my HYP. Not the highest yield by any stretch, but acceptable. It is in there on diversity grounds and has been increasing dividends handsomely. Todays announcement a 17% increase. and the impact on the share price minus 8% I guess the market was expecting more. They have just returned a pile of cash via a tender offer, so I'm not sure how much more the market realy could have expected. Looks like top up time for me. http://www.lse.co.uk/share-regulatory-news.asp?shareprice=CCC&ArticleCode=76idb3tb&ArticleHeadline=Final_Results_2017

[PaulBullet]

I purchased in November 2012 when i was setting up my HYP, since that time they are valued at 2.5x my initial stake and they have provided 50% of the initial value back as dividends or share re-consolidations.

yield on purchase price 6.6%

yield on today's price 2.4%

Paul

[Gengulphus]

I purchased in November 2012 when i was setting up my HYP, since that time they are valued at 2.5x my initial stake and they have provided 50% of the initial value back as dividends or share re-consolidations.

I have absolutely no idea what you mean by a "share re-consolidation", especially as it seems to be something that returns value to shareholders. Could you explain, please?

For clarity, I do know what a "share consolidation" is - but it is neutral or very slightly negative from the point of view of returning value to shareholders. (The "very slightly negative" case is when it produces a fractional entitlement but the corresponding cash payment is below the company's threshold for actually making the payment.)

Gengulphus

[PaulBullet]

They did a 10:9 consolidation with B shares in 2013 and then a 17:15 consolidation with B shares in 2015, so i have about 20% less shares in number.

Paul


2013 info

Computacenter plc ("Computacenter" or the "Company") announces that it proposes to make a one-off Return of Value to Shareholders of 48.7p per existing ordinary share, equivalent to approximately £75 million or approximately 10.8% of Computacenter's current market capitalisation. The return is being made using a B Share structure with an associated Share Capital Consolidation of 9 New Ordinary Shares for every 10 Existing Ordinary Shares. The approval of Shareholders is required for the Return of Value and Share Capital Consolidation. Accordingly, the Company will shortly be posting a circular to its Shareholders and convening an Extraordinary General Meeting, expected to be held on 11 June 2013, to approve the transaction.


2015 info

At the Extraordinary General Meeting of Computacenter plc ("Computacenter" or the "Company") held on 19 February 2015, Shareholders approved the Return of Value of approximately £100 million, by way of a B Share structure of 71.9p for each Existing Ordinary Share held at 5.00 p.m. on 19 February 2015 and the consolidation of Existing Ordinary Shares on the basis of 15 New Ordinary Shares in place of every 17 Existing Ordinary Shares.

[Gengulphus]

They did a 10:9 consolidation with B shares in 2013 and then a 17:15 consolidation with B shares in 2015, so i have about 20% less shares in number.

Thanks for the clarification. Basically, that means that it was the B share schemes that returned value to shareholders - the accompanying consolidations were basically just measures to counteract the sharp one-day share price falls that would otherwise have happened as the schemes came into effect.

Using B share schemes to return value to shareholders has become a lot less popular (quite possibly to the point of non-existence) since a tax law change that removed their main attraction, namely the ability of shareholders who are UK taxpayers to choose between a dividend income return that is subject to Income Tax or a capital return that is subject to Capital Gains Tax. Without that ability, special dividends are a considerably simpler way to return value just as effectively - and when they're fairly big, they are often accompanied by share consolidations for exactly the same reason as the B share schemes were. But at least it's rather more immediately obvious which part of a special dividend accompanied by a share consolidation returns value than it is which part of a B share scheme accompanied by a share consolidation returns value!

By the way, to forestall some possible reactions to what I say above, I've chosen the word "return" carefully, because returning value to shareholders is all that any of these mechanisms do - not just B share schemes and special dividends, but also ordinary dividends, capital distributions, tender offers, etc. Creating value for shareholders so that it can be returned is another matter - that's basically the job of the company's business operations!

Gengulphus