Witan (WTAN) 5 for 1 split

[monabri]

I came across this note for WTAN on " Dividend Data"

https://www.dividenddata.co.uk/dividend ... ?epic=WTAN


12/2019 Interim 1 dividend of 5.875p will be 1.175p after 5 for 1 share split on 28-May-19


( I don't hold shares in WTAN so I don't know if this has been flagged up - apologies in advance)

[Paul1384]

Hi, I am looking to invest in WTAN. Do you think this is a good time to do so after this dividend news? I can't seem to find much information on why they have done this and what it'll mean for future dividends.
Thank you,

[SalvorHardin]

Hi, I am looking to invest in WTAN. Do you think this is a good time to do so after this dividend news? I can't seem to find much information on why they have done this and what it'll mean for future dividends.

It doesn't make any difference and I wouldn't base my decision to invest or not upon the change in the dividend (I am a Witan shareholder).

Yogi Berra, the New York Yankees catcher who's best known for his many quirky sayings, when asked about how he'd like his pizza to be sliced said "You better cut the pizza in four pieces because I'm not hungry enough to eat six." What Witan is doing here the investment equivalent; it's still the same pizza but a slice now contains only a fifth of what a slice contained before the split.

Why do they do this? Well in some cases companies dislike having too high a share price, taking the view that investors will be deterred from buying their shares because of the high price (particularly when investing through a savings plan). So they split the shares. It used to be very common for British companies to split their shares when the share price exceeded £10, this is less common nowadays (e.g. Unilever's share price is £46.27 as I type this). From Witan's most recent annual report (link below):

"This will make no fundamental difference to the value of shareholdings. Assuming the proposal is approved by shareholders, the share price, net asset value per share and dividend per share can be expected to be one fifth of the level prevailing the day before the split, exactly reflecting the increase in the number of shares.

The intention is to make Witan's shares more accessible, particularly for those making regular savings or reinvesting dividends, where the approximately £10 share price in recent years may not be an ideal unit size to deal in. Furthermore, the previous position of one vote per four shares held was anomalous"

https://www.investegate.co.uk/witan-inv ... 00115184S/

Shareholders own exactly the same proportion of the company as they did before. So in Witan's case for every share you owned before the split you will own five shares after the spilt. The dividend is similarly adjusted by dividing it by five.

Take an investor who owns 600 shares before the split. At the current price of 1,056p the holding is worth £6,336. The next quarterly dividend per share was going to be 5.875p so the investor would have received £35.25.

After the 5-for-1 split the investor owns 3,000 shares and the share price will drop to 211.2p so the total holding is still worth £6,336. Similarly the same cash dividend is received, the new dividend is 5.875 / 5 = 1.175p or £35.25 on 3,000 shares.

[Paul1384]

I understand. Thank you for the comprehensive answer.

[scrumpyjack]

The downside to these share splits is that the market makers spread as a percentage can increase.

[Paul1384]

I've taken the plunge and invested in WTAN today through HL. I'm looking for a long term gain, over ten years possibly, and like the quarterly dividends. Would there be any other quarterly dividend IT that I should look at? I've already got some shares with MRCH.
Thanks,

[monabri]

I've taken the plunge and invested in WTAN today through HL. I'm looking for a long term gain, over ten years possibly, and like the quarterly dividends. Would there be any other quarterly dividend IT that I should look at? I've already got some shares with MRCH.
Thanks,

https://www.theaic.co.uk/aic/find-compa ... -companies

Have a look at the AIC website - " income builder"

https://www.theaic.co.uk/income-finder/income-builder

This is the best source of info for ITs.

.p.s. I bought a small holding in WTAN just yesterday.


The AIC website allows sorting of ITs for area in the World (Geographic Region) , income or growth or both (Investment need).

Quite a lot of ITs pay 1/4ly.

Have a look at HFEL and MYI ..they're quite popular for income seekers and are not UK biased ( unlike MRCH)

[DavidM13]

155/281 of those that pay a dividend do so quarterly. 48 annual payers, 71 semi-annual and the balance monthly.

So you have a large pool to choose from if your preference is a quarterly payer

[puffster]

To avoid any unnecessary deaths, just a reminder that today is the day of the split...

Regards, Puffster