Remove ads

Introducing the LemonFools Personal Finance Calculators

Co-op Group

Gilts, bonds, and interest-bearing shares
hiriskpaul
Lemon Quarter
Posts: 1129
Joined: November 4th, 2016, 1:04 pm
Has thanked: 22 times
Been thanked: 274 times

Co-op Group

#131487

Postby hiriskpaul » April 11th, 2018, 4:25 pm

Co-op released an upbeat announcement on its 2017 results last week:

https://www.co-operative.coop/media/new ... sults-2017

The price of the 2025 11% notes did not seem to budge and YTM still about 6%. I am very happy to hold at the current price, but I wish the Group would concentrate a little more on debt reduction instead of handing rewards to customers and running more academies. They have a £450m bond maturing in 2 years time. On current form refinancing on better terms (they are currently paying 6.875%) should not be a problem, but a lot could go wrong before then, such as a Brexit induced recession or other disruption in the retail sector.

At least there is no option to redeem/cancel at par...

hiriskpaul
Lemon Quarter
Posts: 1129
Joined: November 4th, 2016, 1:04 pm
Has thanked: 22 times
Been thanked: 274 times

Re: Co-op Group

#131490

Postby hiriskpaul » April 11th, 2018, 4:30 pm

p.s. I got online quotes to buy/sell 10k nominal of the 11% 2025s (42TE) earlier today. Buy was at 131, for a ytm of 5.9%, sell 128.561 for ytm 6.2%.

hiriskpaul
Lemon Quarter
Posts: 1129
Joined: November 4th, 2016, 1:04 pm
Has thanked: 22 times
Been thanked: 274 times

Re: Co-op Group

#167446

Postby hiriskpaul » September 19th, 2018, 1:02 pm

A rare bit of good news from the high street on Friday:

https://www.londonstockexchange.com/exc ... 90556.html

The highlights for me:

Group Profit before tax** increases to £26m (2017: £14m)** and Group Underlying Profit before tax*** increases to £10m (2017: £3m), this after £35m of reward is generated for Co-op members and their communities
...
Total net debt at the end of the first half of £707m, down from £775m at year-end


So an 86% increase in profit before tax and 233% underlying profit before tax and that is AFTER handing £35 million out in "Member Rewards".

Only negatives I can see are with the insurance businesses. It is unfortunate the Co-op want to persist with this. I would prefer it if they got shot of insurance and concentrated on groceries/funerals as the insurance businesses do not appear to benefit the Group with profits or customers (members) with competitive products.

Overall though, not a bad result for a bunch of lefties. ;)

2025 11% bonds totally unmoved by the good results. Online quotes to buy/sell 10k nominal today were 130.3495/128.16, for YTMs of 5.76%/6.07% respectively. IMHO that is currently good value for these bonds and I will continue to hold - may even buy a few more.

TheMotorcycleBoy
Lemon Slice
Posts: 967
Joined: March 7th, 2018, 8:14 pm
Has thanked: 748 times
Been thanked: 99 times

Re: Co-op Group

#167598

Postby TheMotorcycleBoy » September 20th, 2018, 6:15 am

Hi Paul,

Do you know if it's possible to purchase in lower denominations, e.g. 100s or 1000s?

thanks
M&M

FredBloggs
Lemon Quarter
Posts: 2270
Joined: November 12th, 2016, 8:42 am
Has thanked: 664 times
Been thanked: 429 times

Re: Co-op Group

#167599

Postby FredBloggs » September 20th, 2018, 6:39 am

I am delighted to hear that the business is handing money back to customers and running academies. After all, the business is a cooperative. The clue is in the name. And that is exactly how it should be run. After all the poor decisions and bad management, I would be very happy to see the Coop thrive, grow and hand more money back to customers and run more academies.

air04
Lemon Pip
Posts: 57
Joined: November 10th, 2016, 11:19 am
Has thanked: 6 times
Been thanked: 3 times

Re: Co-op Group

#167885

Postby air04 » September 21st, 2018, 10:23 am

Melanie wrote:Hi Paul,

Do you know if it's possible to purchase in lower denominations, e.g. 100s or 1000s?

thanks
M&M

100 shares 42TE can be bought for with HL, I got a online quote but did not accept it.

TheMotorcycleBoy
Lemon Slice
Posts: 967
Joined: March 7th, 2018, 8:14 pm
Has thanked: 748 times
Been thanked: 99 times

Re: Co-op Group

#167903

Postby TheMotorcycleBoy » September 21st, 2018, 11:48 am

air04 wrote:
Melanie wrote:Hi Paul,

Do you know if it's possible to purchase in lower denominations, e.g. 100s or 1000s?

thanks
M&M

100 shares 42TE can be bought for with HL, I got a online quote but did not accept it.

We use iWeb ourselves, so perhaps we should ring them and see.

hiriskpaul
Lemon Quarter
Posts: 1129
Joined: November 4th, 2016, 1:04 pm
Has thanked: 22 times
Been thanked: 274 times

Re: Co-op Group

#168117

Postby hiriskpaul » September 22nd, 2018, 10:25 am

You cannot buy these through iWeb. I do hold some at iWeb from issue, they were exchanged for various Co-op Bank securities, but iWeb will not allow me to purchase any more, just sell.

iWeb are not the best when it comes to bonds and other fixed income securities, although for the ones they do offer the phone dealing charge is only £5. I have quite a substantial position in the Balfour Beatty prefs BBYB, but iWeb suddenly dropped them without any communication, so again I can sell but not buy any more.

hiriskpaul
Lemon Quarter
Posts: 1129
Joined: November 4th, 2016, 1:04 pm
Has thanked: 22 times
Been thanked: 274 times

Re: Co-op Group

#168127

Postby hiriskpaul » September 22nd, 2018, 10:38 am

FredBloggs wrote:I am delighted to hear that the business is handing money back to customers and running academies. After all, the business is a cooperative. The clue is in the name. And that is exactly how it should be run. After all the poor decisions and bad management, I would be very happy to see the Coop thrive, grow and hand more money back to customers and run more academies.

Yes I don't really begrudge them doing that. I am a member and they send me vouchers every year as well!

It is mainly for my own selfish interest as a bond holder that I would like to see debt reduced ;)

However, if they did make more effort to reduce debt they could refinance longer dated debt at lower costs and in the longer term hand over more to lenders and their various schemes.

TheMotorcycleBoy
Lemon Slice
Posts: 967
Joined: March 7th, 2018, 8:14 pm
Has thanked: 748 times
Been thanked: 99 times

Re: Co-op Group

#168142

Postby TheMotorcycleBoy » September 22nd, 2018, 12:23 pm

hiriskpaul wrote:You cannot buy these through iWeb. I do hold some at iWeb from issue, they were exchanged for various Co-op Bank securities, but iWeb will not allow me to purchase any more, just sell.

iWeb are not the best when it comes to bonds and other fixed income securities, although for the ones they do offer the phone dealing charge is only £5. I have quite a substantial position in the Balfour Beatty prefs BBYB, but iWeb suddenly dropped them without any communication, so again I can sell but not buy any more.

Yeah, we noticed this. Mel and I bought a few other bonds through iWeb, but we are seriously considering opening another ISA account with a different provider in order to make the most of the market.

M&M

everhopeful
Lemon Pip
Posts: 58
Joined: November 9th, 2016, 12:18 pm
Has thanked: 2 times
Been thanked: 15 times

Re: Co-op Group

#168314

Postby everhopeful » September 23rd, 2018, 10:01 am

Don't open it with Barclays if you want to buy retail bonds. See the discussion on the post below this.

Laughton
Posts: 31
Joined: November 6th, 2016, 2:15 pm
Been thanked: 1 time

Re: Co-op Group

#191303

Postby Laughton » January 5th, 2019, 4:56 pm

I managed to pick up another chunk of Co-Op 42TF yesterday at 5.50p for an IRR of 6.29% which I am more than happy with. I especially like the idea that they are effectively paying back the capital as we go along.

Only downside is that they only pay once per year but that at least delays the temptation for me to invest the "coupon" in something I shouldn't. :roll:


Return to “Gilts and Bonds”

Who is online

Users browsing this forum: No registered users and 3 guests