UBM

[Arborbridge]

Does anyone have any views about this company? I bought it as a pair with Pearson in the media sector, but since then it has changed its character considerably. Although it is still in media, it is almost entirely now an exhibition organiser - I've no idea if that is a good thing or a bad one.

It's been jogging along reasonably well but had a 20% dividend cut in 2013, from which the dividend is slowly recovering.
Forward yield of the order of 3.3%.

I'm thinking of trimming back the holding to the median, or selling completely as the holding is getting quite large now, and I'm not sure I can justify it. (i.e. justify a large chunk in a low-ish yielder which is not a known stalwart)


Arb.

[monabri]

I don't know anything about UBM but might I counter with "ITV" instead? Just a suggestion

( disc: I hold ITV at 2% of total HYP porfolio)

Good div cover, slightly higher yield, well known (!) and a possible takeover target.

[monabri]

http://investing.thisismoney.co.uk/brok ... M/UBM.html

[Davidsb]

...but had a 20% dividend cut in 2013, from which the dividend is slowly recovering...

On 6th November 2014, UBM announced a rights issue - 4 for 5 at £2.87 - to finance the purchase of US company Advanstar.

http://www.investegate.co.uk/ubm-plc--u ... 1345PF094/

The rights issue was successful, with 96.56% acceptances.

http://www.investegate.co.uk/ubm-plc--u ... 0000P36B2/

The 2014 results, released on 27th February 2015, showed a 2014 full year dividend of 21.3p per share. The actual dividend for 2013 was 27.2p, but the 2014 results show a comparative for 2013 of 21.1p after adjusting for the rights issue.

http://www.investegate.co.uk/ubm-plc--u ... 0000PD53C/

On 15th December 2015, UBM announced the disposal of its PR Newswire division for around £0.5bn, of which around half would be returned to shareholders via a special dividend.

http://www.investegate.co.uk/ubm-plc--u ... 0000P0988/

Completion of the sale was announced on 17th June, with the 55.3p/share special dividend accompanied by an 8 for 9 consolidation.

http://www.investegate.co.uk/ubm-plc--u ... 0000P5E14/

I have held UBM since 2011, and, with the changes outlined above and a couple of top-ups in 2015 and 2016, the company now represents 3.2% of my HYP's capital and 2.3% of its forecast dividends. Current dividend forecast is 3.13% (Morningstar), which is not low enough for me to think about tinkering.

HTH.

[Arborbridge]

The 2014 results, released on 27th February 2015, showed a 2014 full year dividend of 21.3p per share. The actual dividend for 2013 was 27.2p, but the 2014 results show a comparative for 2013 of 21.1p after adjusting for the rights issue.

Another black mark against UBM then - such complications are the very devil:)

I wouldn't take into account the special dividend.

After trimming, UBM is 2.64% of my HYP by capital, 1.02x median. The cash went towards topups which were due on two ITs, 3iN and HFEL. Higher yield, fewer complications, lower risk and good dividend growth, in my view. I could have topped up another HYP share, but as it happens, I was restricted by the holdings which happened to be in the same broker account, so there wasn't anything appropriate.

Arb.

[Davidsb]

Hi Arb -

Another black mark against UBM then - such complications are the very devil:)

Unfortunately, adjustments of this sort are inevitable when rights issues take place - I'm not sure what one can do about it - other than outlaw rights issues!

I wouldn't take into account the special dividend.

As the reason for the special dividend was the sale of the PR Newswire division, I treated it as a return of capital - other treatments are available.....

;¬)

[Arborbridge]

Davidsb,

Here's a table of recent payments, from which I was working: I've totalled what "appear to be" annual amounts received - you can see how confusion arises, whatever the cause. But generally, one would like to see a nice steady progression, but in this case that has been obliterated by the various changes. Luni did not like companies which have rights issues, and I don't blame him as they rarely do anything other than obfuscate. Apart from Greene King, I doubt that I've known a rights issue which was helpful to the cause of shareholders.



BTW, this was only one factor which caused me to trim UBM. Add this to the company being in a state of flux and the low-ish yield, ultimately I didn't feel justified having it "over--median" compared with other options.

Arb.

[monabri]

my old boss had a saying..."boring, .....boring is good!". Seems a good mantra for a HYPer.

[tjh290633]

To me, UBM means United Builders Merchants. Who are this mob?

TJH

[Davidsb]

Hi again, Arb -

I suspect that your 27.2p as shown for the final 2013 dividend might actually be the full-year dividend - I have the 2013 interim as 6.7p and the final as 20.5p, giving a total for the year of 27.2p.

I have fond memories of the United Utilities rights issue of 2003, which was as fine a piece of corporate poker playing as I have ever seen.