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TRIG - share issue and future dividend guidance

General discussions about equity high-yield income strategies
Dod101
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Re: TRIG - share issue and future dividend guidance

#359515

Postby Dod101 » November 24th, 2020, 8:16 am

daveh wrote:
Dod101 wrote:
It is increasing the size of the pie and at the same time reducing your holding in the company. You do not notice that probably because they are buying earnings accretive assets so that they can maintain or even increase their dividend notwithstanding the extra mouths to feed. In the event of a winding up of the company your share of the assets would be reduced.

Dod


But it would be a smaller share of more assets. If the company is investing the new capital wisely it shouldn't be a problem. You'd get a smaller % of a bigger pie and if the company is doing its job your actual piece of pie should be larger.


If you want to see the sometimes effect of dilution just take a look at the dividend record of Phoenix Holdings. They have sprayed new shares around for first the takeover of Standard Life and then Reassure. The result is that they have increased the divided as a cost to the Company but the dividend per share has been static for two or three years. beware complacency in the issue of share placings.

Dod

Urbandreamer
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Re: TRIG - share issue and future dividend guidance

#359527

Postby Urbandreamer » November 24th, 2020, 8:51 am

Dod101 wrote:If you want to see the sometimes effect of dilution just take a look at the dividend record of Phoenix Holdings. They have sprayed new shares around for first the takeover of Standard Life and then Reassure. The result is that they have increased the divided as a cost to the Company but the dividend per share has been static for two or three years. beware complacency in the issue of share placings.

Dod


I certainly didn't mean to suggest that dilution is not something to worry about in general. However your example is an example of bad decisions made by a company board. The investment didn't grow the pie and the additional shares diluted holdings in a shrinking pie.

What I meant to suggest is that dilution is not an issue if the pie is genuinly growing by the aditional capital. That's how I see this and previous capital calls in this sector. The difficulty for everyone will be judging when that situation is changing.

daveh
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Re: TRIG - share issue and future dividend guidance

#359529

Postby daveh » November 24th, 2020, 9:09 am

Urbandreamer wrote:
Dod101 wrote:If you want to see the sometimes effect of dilution just take a look at the dividend record of Phoenix Holdings. They have sprayed new shares around for first the takeover of Standard Life and then Reassure. The result is that they have increased the divided as a cost to the Company but the dividend per share has been static for two or three years. beware complacency in the issue of share placings.

Dod


I certainly didn't mean to suggest that dilution is not something to worry about in general. However your example is an example of bad decisions made by a company board. The investment didn't grow the pie and the additional shares diluted holdings in a shrinking pie.

What I meant to suggest is that dilution is not an issue if the pie is genuinly growing by the aditional capital. That's how I see this and previous capital calls in this sector. The difficulty for everyone will be judging when that situation is changing.


Its one to keep an eye on. There were comments on the oil, gas and energy board (viewforum.php?f=16) on whether the CFD prices obtained for some of the large offshore wind farms now in development were sufficient to cover the development and financing costs over the lifetime of the CFD. We need to keep an eye on the new investments that TRIG and similar companies are making and make sure they are earnings accretive. The question is can we notice in time (if it happens) to exit at a profit.

ReallyVeryFoolish
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Re: TRIG - share issue and future dividend guidance

#359536

Postby ReallyVeryFoolish » November 24th, 2020, 9:39 am

daveh wrote:
Urbandreamer wrote:
Dod101 wrote:If you want to see the sometimes effect of dilution just take a look at the dividend record of Phoenix Holdings. They have sprayed new shares around for first the takeover of Standard Life and then Reassure. The result is that they have increased the divided as a cost to the Company but the dividend per share has been static for two or three years. beware complacency in the issue of share placings.

Dod


I certainly didn't mean to suggest that dilution is not something to worry about in general. However your example is an example of bad decisions made by a company board. The investment didn't grow the pie and the additional shares diluted holdings in a shrinking pie.

What I meant to suggest is that dilution is not an issue if the pie is genuinly growing by the aditional capital. That's how I see this and previous capital calls in this sector. The difficulty for everyone will be judging when that situation is changing.


Its one to keep an eye on. There were comments on the oil, gas and energy board (viewforum.php?f=16) on whether the CFD prices obtained for some of the large offshore wind farms now in development were sufficient to cover the development and financing costs over the lifetime of the CFD. We need to keep an eye on the new investments that TRIG and similar companies are making and make sure they are earnings accretive. The question is can we notice in time (if it happens) to exit at a profit.

This morning, Questor in the Telegraph is wondering if the increase in the number of projects will inflate the bid prices for the projects and render them much less profitable. One aspect he mentions, I have wondered about myself. Are oil super majors going to buy into renewable energy businesses at inflated prices in order to grow the renewable side of the company in line with promises made? The industry has a track record of paying too much buying assets at the top of the market.

RVF

Dod101
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Re: TRIG - share issue and future dividend guidance

#359538

Postby Dod101 » November 24th, 2020, 9:47 am

Urbandreamer wrote:I certainly didn't mean to suggest that dilution is not something to worry about in general. However your example is an example of bad decisions made by a company board. The investment didn't grow the pie and the additional shares diluted holdings in a shrinking pie.

What I meant to suggest is that dilution is not an issue if the pie is genuinly growing by the aditional capital. That's how I see this and previous capital calls in this sector. The difficulty for everyone will be judging when that situation is changing.


Time will tell if Phoenix made bad decisions. As Chou en Lai did not say of the French Revolution, it is too early to tell. The investments certainly grew the pie, where did you get the idea that buying Standard Life and Reassure did not? Anyway we are not discussing Phoenix; I simply used it as an example of the possible effect of share dilution.

I looked at TRIG as I mentioned on another thread and decided to give it a miss for a number of reasons, firstly, that is in but one part of the green renewables sector, secondly. I do not like the regular dilution that takes place by share placings, and thirdly, as RVF has said, windfarms have become flavour of the month and prices may no longer be that competitive. If it were that easy..........Finally the share price is about 14% or so above NAV.

Good luck to holders; I wish them well.

Dod

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Re: TRIG - share issue and future dividend guidance

#360207

Postby richfool » November 26th, 2020, 11:00 am

I wonder how this will affect the demand for TRIG and other renewable energy trusts/stock:

Picked up from the HL website under SSE news, but is also in several other sources:

UK government to double subsidies for renewable energy in 2021

(Sharecast News) - The UK government plans to double the amount of green energy it will subsidise in 2021 as it agrees to include onshore power projects.
The projects could support up to 12GW of renewable energy or at least enough to charge up to 20m electric vehicles a year.

Energy companies will compete for contracts in auction at the end of 2021 which is set to be almost double the size of the last 5.8GW auction in 2019.

The next round will include three separate auctions for different renewable energy technologies to compete for a contract.

There will be one "pot" for offshore wind projects and another for less-established technologies.

The third pot will allow onshore wind and solar farms to compete for a support contract for the first time in six years.

Kwasi Kwarteng, the energy minister, said the new auction is part of the Prime Minister Boris Johnson's 10-point climate plan, which includes a £12bn public investment, to help the country reach net zero carbon emissions by 2050.

The plan will see the UK's offshore windfarms grow four-fold to 40GW in the next ten years and an expansion of EVs on British roads.

https://www.hl.co.uk/shares/shares-sear ... lc-ord-50p
https://www.lse.co.uk/news/uk-governmen ... qykqh.html
https://www.theguardian.com/environment ... y-projects

Also posted here:

viewtopic.php?f=16&t=11176&p=360204#p360204

richfool
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Re: TRIG - share issue and future dividend guidance

#360636

Postby richfool » November 27th, 2020, 3:02 pm

Issue of new shares oversubscribed and scaled back:

https://www.investegate.co.uk/renew-inf ... 38037989G/

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Re: TRIG - share issue and future dividend guidance

#360834

Postby ukfire » November 28th, 2020, 11:15 am

I don't have an issue with the placing, just that the price was too low and no pre-emption rights. Hence why the placing was oversubscribed.

richfool
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Re: TRIG - share issue and future dividend guidance

#360845

Postby richfool » November 28th, 2020, 11:46 am

The SP on the open market eased back a bit more towards the close yesterday, finishing at 125.80p.

Having offloaded my holding a couple of weeks back, I am pondering whether to buy some more at the new lower price.

I sold because there seems to be limited upside (in terms of capital appreciation) with these renewables and whilst the dividend is good, they trade at significant premiums to NAV. They often raise more funds and dilute the SP as they evolve. TRIG does hold a variety of energy sources (wind, solar and even some storage), which I like. Future movements in the price of energy also need to be considered. So for me, the jury is still out on this one.


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