Phoenix: interpreting the latest dividend

[monabri]

"The company is paying an interim dividend of 22.6 pence a share, compared to 25.1p a year earlier and flat on its final dividend for 2017."

https://www.londonstockexchange.com/exc ... 13900.html

( Effect of the recent Rights Issue?)

Moderator Message:
Subject line title changed so as to remove reference to "dividend cut" -- MDW1954

[blobby]

monabri, you just beat me to a posting which was going to be:

Phoenix Half Year Report

The report is here. The report looks good to me with expectations at the upper end of targets and the share price is up so the market likes it.

http://otp.investis.com/clients/uk/phoe ... id=1156266

This ticks all the HYP boxes for me and the yield is now 6.4%

I don't regard this as a dividend cut. The dividend is less as there was a share offer placing thing this year and a return of capital to shareholders not taking part.

[monabri]

Hi Bobby
The thought on the Rights Issue occurred to me after I posted - I edited my original listing to that effect but you got in before me.

monabri

[jackdaww]

i hold phoenix - looks ok to me.

also other zombie types chesnara and aviva.

[OZYU]

Agree, far from being a divi cut, it is in fact a slight increase on the adjusted divi (adj factor 0.8953) post recent rights of 22.47p. They did announce that the planned divi increase will come with the next divi payment, should be in the region of 23.44p.

Ozyu

Disc: I Hold, well above median. Xirr 15.3%. Some zombie.

[Arborbridge]

Dod, where are you? So used to him popping up to root for Phoenix it seems like a hole in the board

[Dod101]

I am enjoying my sabbatical and actually reading the various posts as an outsider is very sobering. There is frankly a lot of stuff of not the slightest concern to me or I suspect others, but it is very easy to get bound up in it.

I read the results of Phoenix at about 7.10 am this morning and of course it is not a dividend cut but I think even if we took up our full rights we were all being diluted so it may look like one. Bear in mind that Phoenix is no longer a pure zombie, in fact neither is Chesnara. I do not know if this will have any effect or not for the future but as long as they stay focussed on cash generation we should be fine.

Back to sleep again.

Dod

[idpickering]

Good to see you about still Dod. Long may we get the pleasure of your input here.

Ian.

[Alaric]

Bear in mind that Phoenix is no longer a pure zombie, in fact neither is Chesnara.

Such is the shake out that even viable new business operations are ending up in the hands of the consolidators. Whilst keeping some of their brands open to new business, Aviva now has a large book of closed funds.

[BBLSP1]

I tail-swallowed on this one, and my ratio of new number of shares to old number of shares is 1.105. Multiply by the announced 22.6p gives old equivalent dividend of 24.97p, so a little bit down if you tail-swallowed.

Moderator Message:
Potentially confusing spelling tweaked -- MDW1954

[monabri]

Ok, I think I get my head round it!

Recapping:-
"The offer is to be made at 518 pence per New Share (the "Issue Price"), payable in full on acceptance by no later than 11.00 a.m. on 9 July 2018. The Rights Issue is expected to raise gross proceeds of approximately £950 million. The Issue Price represents a 25.1 per cent. discount to the theoretical ex-rights price of 691 pence per Share calculated by reference to the Closing Price on 29 May 2018"



The dividend of 22.6p (I=Interim) shown in RED is the amount announced today. I then use Ozyu's figure of 23.44p for a final figure (yet to be announced/confirmed).

I then take these figures into 2019 as guesstimates for the Interim and Final dividends of 23.44p and 23.44p. This would make a total dividend of 46.88p or an increase of 4.31% on the dividend per share (reference 772p).

(46.88p/ TERP of 691p)


"Supported by the additional long-term cashflows arising from the Acquisition, Phoenix announced on 23 February 2018 that it expects to increase its annualised dividend to £338 million from the date of the final 2018 dividend versus the current standalone annualised dividend of £197 million. Taking into account the impact of the Rights Issue and the associated bonus adjustment, this is approximately equivalent to a 4.3 per cent. increase in the dividend per share based on the share price of 772 pence as at 29 May 2018. "


(arbitrary choice of a round number of 150 shares)


p.s. Thank-you Moderator for re-titling the post.

[Arborbridge]

I read the results of Phoenix at about 7.10 am this morning and of course it is not a dividend cut but I think even if we took up our full rights we were all being diluted so it may look like one. Bear in mind that Phoenix is no longer a pure zombie, in fact neither is Chesnara. I do not know if this will have any effect or not for the future but as long as they stay focussed on cash generation we should be fine.

Back to sleep again.

Dod

Thanks for your popping up! I hope you will do that occasionally to offer us your opinion, even if not so regularly as previously.

[Gengulphus]

"The company is paying an interim dividend of 22.6 pence a share, compared to 25.1p a year earlier and flat on its final dividend for 2017."

https://www.londonstockexchange.com/exc ... 13900.html

( Effect of the recent Rights Issue?)

Not a company I have a holding in, and not a matter I have the spare time to investigate in detail here - but a general point is that such Alliance News articles are generally journalist-generated summaries of RNSes issued by the company. If you see something in them that looks unusual, it could be that something unusual really has happened, or that you've misunderstood something, or that the journalist has misunderstood something. Investigating to try to find out which is worthwhile, and finding the RNS concerned is usually an easy first step.

In this case, a dividend cut by 10% is distinctly unusual, basically because if a company is in sufficient trouble to need to cut its dividend, it generally needs to cut it quite a lot more than that. They do happen, for example when a company has a formula-based dividend policy like Sainsbury's current one, but such cases aren't particularly common. So I would find Phoenix's interim results RNS, search it for "dividend" and the very first result I would find is the highlighted point "Interim dividend of 22.6p per share, consistent with Final 2017 dividend rebased for July rights issue.". Reason for the 10% 'cut' found!

Not trying to get at you or anyone else here, by the way - just trying to apply the "teaching people how to fish is better than giving them fish" principle!

Gengulphus

[CryptoPlankton]

I am enjoying my sabbatical and actually reading the various posts as an outsider is very sobering. There is frankly a lot of stuff of not the slightest concern to me or I suspect others, but it is very easy to get bound up in it.

I read the results of Phoenix at about 7.10 am this morning and of course it is not a dividend cut but I think even if we took up our full rights we were all being diluted so it may look like one. Bear in mind that Phoenix is no longer a pure zombie, in fact neither is Chesnara. I do not know if this will have any effect or not for the future but as long as they stay focussed on cash generation we should be fine.

Back to sleep again.

Dod

With 6 more TLF posts by the end of the next day after this, it seems you are more prolific in your sleep than most of us when we're at our most active! Pleased to see it, though. Hope the "sobering" effect helps in avoiding further strife - I think a peaceful HYP Practical with Dod contributing would be a win-win for everyone.

You can check out anytime you like, but you can never leave,

(Sorry to go OT...)