Donate to Remove ads

Got a credit card? use our Credit Card & Finance Calculators

Thanks to johnstevens77,Bhoddhisatva,scotia,Anonymous,Cornytiv34, for Donating to support the site

Shell Announcements

For discussion of the practicalities of setting up and operating income-portfolios which follow the HYP Group Guidelines. READ Guidelines before posting
Forum rules
Tight HYP discussions only please - OT please discuss in strategies
idpickering
The full Lemon
Posts: 11276
Joined: November 4th, 2016, 5:04 pm
Has thanked: 2468 times
Been thanked: 5763 times

Shell Announcements

#99423

Postby idpickering » November 28th, 2017, 7:12 am

Shell updates company strategy and financial outlook, and outlines net carbon footprint ambition.

Scrip dividend programme to be cancelled with effect from the fourth quarter 2017 dividend.
•Annual organic free cash flow outlook increased to $25 to $30 billion by 2020, at $60 per barrel (real terms 2016)
•Company sets ambition to reduce the net carbon footprint of its energy products in step with society’s drive to align with the Paris Agreement goals


https://www.investegate.co.uk/royal-dut ... 0027P5C1F/

And this';

Shell announces cancellation of Scrip Dividend Programme from fourth quarter 2017

Royal Dutch Shell plc (“Shell” or the “Company”) announces the cancellation of its Scrip Dividend Programme (the “Programme”) with effect from the fourth quarter 2017 Interim Dividend. The cancellation means that the fourth quarter 2017 Interim Dividend and future dividends will be settled entirely in cash, rather than the Company offering a share-based alternative.

As a result of the Programme cancellation, no scrip dividend will be offered for Shell’s fourth quarter 2017 Interim Dividend, to be announced on February 1, 2018. The third quarter 2017 Interim Dividend, payable on December 20, 2017, is not affected and provides eligible shareholders with a choice to receive that dividend in cash or in shares via the Programme.


https://www.investegate.co.uk/royal-dut ... 0049P96DA/

Dod101
The full Lemon
Posts: 16629
Joined: October 10th, 2017, 11:33 am
Has thanked: 4343 times
Been thanked: 7534 times

Re: Shell Announcements

#99430

Postby Dod101 » November 28th, 2017, 7:37 am

What on earth is organic free cash flow? I have heard of organic eggs.

Cancellation of the scrip dividend is surely a good sign in that they feel they can generate the cash not to need to encourage shareholders to take scrip instead of cash for the dividend.

Dod

Gengulphus
Lemon Quarter
Posts: 4255
Joined: November 4th, 2016, 1:17 am
Been thanked: 2628 times

Re: Shell Announcements

#99497

Postby Gengulphus » November 28th, 2017, 11:07 am

Dod101 wrote:What on earth is organic free cash flow? I have heard of organic eggs.

I believe I've seen the word "organic" used by various companies to mean "from existing operations", i.e. that they haven't tried to take acquisitions and disposals into account. Mostly in the context of "organic growth" of the company IIRC, but that meaning would also fit here.

Not the most obvious or helpful bit of financial terminology, I agree!

Added by edit:

Dod101 wrote:Cancellation of the scrip dividend is surely a good sign in that they feel they can generate the cash not to need to encourage shareholders to take scrip instead of cash for the dividend.

It should also have the side-effect that I don't believe there will be any reason after the change for Shell to delay fixing the dividend exchange rates for some weeks after the results - as far as I'm aware, that was done to resolve a timing issue about getting shareholders' scrip dividend elections. Which will get rid of the nuisance of the results telling us what the company is doing with the dividend, but needing to revisit some weeks later if we want to know exactly what we'll get. (By the way, I really do mean "nuisance", not "major issue"!)

Gengulphus

moorfield
Lemon Quarter
Posts: 3523
Joined: November 7th, 2016, 1:56 pm
Has thanked: 1546 times
Been thanked: 1402 times

Re: Shell Announcements

#99515

Postby moorfield » November 28th, 2017, 12:00 pm

Dod101 wrote:Cancellation of the scrip dividend is surely a good sign in that they feel they can generate the cash not to need to encourage shareholders to take scrip instead of cash for the dividend.



I agree. And it's a good example of the conundrum we are sometimes presented with when applying Pyad's dividend history test - eg. Terry (Wizard) (*) discounts not buying RDSB for that reason (viewtopic.php?f=15&t=8648#p98974) , on the other hand I read it as a signal of confidence in the future dividend. With a 6.3% yield on offer, why wait another 5+ years for Pyad's test to catch up?

M

(*) This should not be read as a personal attack, but as a recent example to highlight my post.

Dod101
The full Lemon
Posts: 16629
Joined: October 10th, 2017, 11:33 am
Has thanked: 4343 times
Been thanked: 7534 times

Re: Shell Announcements

#99520

Postby Dod101 » November 28th, 2017, 12:15 pm

Yes. I did not pick up Wizard on that comment but it seems that Shell has got over the worst. I have been watching it carefully because I think that there must have been a risk that the dividend could be cut but it looks as if they have got through that period. Depends I suppose though on how the oil price holds up.

Dod

Gengulphus
Lemon Quarter
Posts: 4255
Joined: November 4th, 2016, 1:17 am
Been thanked: 2628 times

Re: Shell Announcements

#100176

Postby Gengulphus » November 30th, 2017, 12:31 pm

Gengulphus wrote:
Dod101 wrote:Cancellation of the scrip dividend is surely a good sign in that they feel they can generate the cash not to need to encourage shareholders to take scrip instead of cash for the dividend.

It should also have the side-effect that I don't believe there will be any reason after the change for Shell to delay fixing the dividend exchange rates for some weeks after the results - as far as I'm aware, that was done to resolve a timing issue about getting shareholders' scrip dividend elections. Which will get rid of the nuisance of the results telling us what the company is doing with the dividend, but needing to revisit some weeks later if we want to know exactly what we'll get. (By the way, I really do mean "nuisance", not "major issue"!)

One other practical side-effect that some will find a bit more annoying: taking dividends on RDSA shares as scrip rather than cash avoided paying Dutch withholding tax on them, and if the investor's UK tax rate was below the Dutch withholding tax rate (15%, I believe), that would not be counteracted fully by an increase in the UK tax bill - or at all if the UK tax rate was 0%, as in particular it is in an ISA.

So once scrip dividends are no longer available (*), those investors who have RDSA shares in an ISA will start to suffer Dutch withholding tax on their dividends. Also, since scrip dividends were paid in RDSA shares regardless of whether the dividends arose from RDSA or RDSB shares, investors who hold either type of share in an ISA and who have chosen to receive scrip will probably have a holding of RDSA shares. Similar considerations apply to other holdings than ISA ones that are subject to a UK tax rate under 15% - I won't try to list all the ways that could be the case for a holding, as I'm not even sure I know them all!

That Dutch withholding tax is of course avoidable by selling the holding of RDSA shares and using the proceeds to buy RDSB shares, at the cost of trading costs, possible CGT and a likely change in the number of shares owned as a result of the two types of shares having different prices (currently a fall, as the RDSB price is currently a few percent higher than the RDSA price). Whether it's worthwhile can only really be worked out on a case-by-case basis, as it will depend heavily on the UK tax rate involved, whether CGT is involved, the size of the RDSA holding and current share prices.

(*) They are still available for the 3rd quarter dividend, which is the one due to be paid on December 20th, and those with registered shareholdings (i.e. held as certificates or in CREST accounts) can even still change whether they get that dividend as cash or as scrip if they really get their skates on - the deadline for scrip elections to be received by the company registrars is tomorrow. That almost certainly won't apply for ISAs or any other kind of nominee account, as I've never come across a nominee broker who passes client instructions on to registrars anything like that quickly.

They won't be available for any subsequent dividends - until and unless the company changes its mind again about offering scrip.

Gengulphus

Dod101
The full Lemon
Posts: 16629
Joined: October 10th, 2017, 11:33 am
Has thanked: 4343 times
Been thanked: 7534 times

Re: Shell Announcements

#100207

Postby Dod101 » November 30th, 2017, 1:54 pm

I read in the report about Unilever's plans that the Dutch are going to abolish the with holding tax in an attempt to encourage Unilever, so I do not think the with holding tax will be an issue for much longer. If they do I assume that the prices will even up before long.

Actually what the Dutch appear to be planning is not so much the abolition of the withholding tax as widening the scope of the current exemptions so as to benefit Unilever, but I do not know enough about it and am not really very interested anyway

Dod

jackdaww
Lemon Quarter
Posts: 2081
Joined: November 4th, 2016, 11:53 am
Has thanked: 3203 times
Been thanked: 417 times

Re: Shell Announcements

#100239

Postby jackdaww » November 30th, 2017, 2:56 pm

Dod101 wrote:What on earth is organic free cash flow? I have heard of organic eggs.

Dod


=================================

and even they cant be trusted unless you personally know the hens...

;)


Return to “HYP Practical (See Group Guidelines)”

Who is online

Users browsing this forum: No registered users and 12 guests