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Land Securities - proposed 60p per ord cash return etc

PinkDalek
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Land Securities - proposed 60p per ord cash return etc

#70017

Postby PinkDalek » July 27th, 2017, 2:41 pm

Not the most active of boards and most will already have seen:

Landsec sells its share of 20 Fenchurch Street, EC3M for £641 million and proposes to return £475 million to shareholders
http://www.londonstockexchange.com/exch ... 08899.html

Extract only:

Landsec intends to return approximately £475 million to shareholders in the form of a payment of 60 pence per share, which would be accompanied by a share consolidation. The payment and share consolidation is subject to shareholder approval, which is expected to be sought in late September 2017.

I'm assuming this will be a capital return, rather than a dividend (it will not be a PID), and those whose holding are non-sheltered may need to remind themselves of the CGT part disposal rules or the small receipts alternative.

Small receipts mentioned here:

https://www.gov.uk/guidance/capital-gai ... -or-merger

"If you get a small amount of cash

You don’t pay Capital Gains Tax if both of the following apply:

you get less than £3,000 or an amount less than 5% of the value of your shares in the company, valued just before the takeover

the cash you get is less than the cost of your original shares"

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Re: Land Securities - proposed 60p per ord cash return etc

#70056

Postby Gengulphus » July 27th, 2017, 4:49 pm

For what it's worth, I think a special dividend plus share consolidation is the odds-on favourite for the form of the cash return. But it is in any event a reasonable possibility.

The point of which is that there really isn't much point in trying to discuss the taxation treatment until the company tells us what form the payment will take - indeed, I'd say that it's actually a bad idea, as no matter how many ifs, provideds, etc, we surround the discussion with, some people will probably carry away the impression that the taxation treatment definitely is the one they've read about. Far better IMHO to wait until the company tells us how they're going to make the payment.

Also, I'm not certain why this wasn't counted as a HYP topic. The yield is at least arguably high - above the FTSE AllShare yield - and it's got a decently high market cap and a 5-year growing dividend history. And it is actually one of HYP1's shares!

Gengulphus

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Re: Land Securities - proposed 60p per ord cash return etc

#70061

Postby PinkDalek » July 27th, 2017, 4:58 pm

Replying to self but the FT includes (my bold):

Landsec said it would return £475m to shareholders through a special dividend and share consolidation.

Source: https://www.ft.com/content/ef86b486-7cb ... 5a398a2d97
To search via Google's cache use: Hong Kong oyster sauce company buys London’s “Walkie Talkie” tower for £1.3bn

The RNS did not mention a dividend nor the precise mechanics of the proposed payment.

I have therefore spoken to the "Investors" contact number given in the RNS and the person I spoke to confirmed the details have not been decided and the FT have got it wrong.

Don't believe everything you read on the internet, even if in the Financial Times. ;)

PS As is my norm, I missed Genghu's reply whilst typing.

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Re: Land Securities - proposed 60p per ord cash return etc

#70063

Postby PinkDalek » July 27th, 2017, 5:14 pm

Gengulphus wrote:For what it's worth, I think a special dividend plus share consolidation is the odds-on favourite for the form of the cash return. But it is in any event a reasonable possibility.


Noted, thanks, perhaps I was hoping for a capital return rather than a dividend.

The point of which is that there really isn't much point in trying to discuss the taxation treatment until the company tells us what form the payment will take - indeed, I'd say that it's actually a bad idea, as no matter how many ifs, provideds, etc, we surround the discussion with, some people will probably carry away the impression that the taxation treatment definitely is the one they've read about. Far better IMHO to wait until the company tells us how they're going to make the payment.


Indeed but for my own personal reasons I'm calculating the potential outcomes in advance, as they impact on my investing activities. Hopefully people here are knowledgeable enough to understand what I meant when I commenced "I'm assuming this will be a capital return ...". At least I didn't state what it would be, unlike the FT.

Also, I'm not certain why this wasn't counted as a HYP topic. The yield is at least arguably high - above the FTSE AllShare yield - and it's got a decently high market cap and a 5-year growing dividend history. And it is actually one of HYP1's shares!


Aha, sorry about that, I read "High Yield Portfolios (HYP) - Practical" but clearly don't recall seeing them discussed much in recent times. Although I'm sure many over there hold. I originally posted on this dedicated board as it is somewhat inactive. The mention of it at "High Yield Portfolios (HYP) - Practical" was made after seeing that the proposed cash return hadn't been posted over there, nearly 8 hours after the RNS, so I'd erroneously assumed there was little interest.

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Re: Land Securities - proposed 60p per ord cash return etc

#70090

Postby mc2fool » July 27th, 2017, 6:22 pm

PinkDalek wrote:
Also, I'm not certain why this wasn't counted as a HYP topic. The yield is at least arguably high - above the FTSE AllShare yield - and it's got a decently high market cap and a 5-year growing dividend history. And it is actually one of HYP1's shares!

Aha, sorry about that, I read "High Yield Portfolios (HYP) - Practical" but clearly don't recall seeing them discussed much in recent times. Although I'm sure many over there hold. I originally posted on this dedicated board as it is somewhat inactive. The mention of it at "High Yield Portfolios (HYP) - Practical" was made after seeing that the proposed cash return hadn't been posted over there, nearly 8 hours after the RNS, so I'd erroneously assumed there was little interest.

There's nowt to apologise for and this is absolutely the right board to have posted this. It's a REIT and this is the REITs & Property Companies board. Not everyone interested in REITs runs a HYP and/or is interested in following the HYP boards.

If, as well as being an item about a REIT, and hence of interest to those following this board, it is coincidentally also deemed to be of interest to folks running HYPs, then of course it's perfectly ok to also post it in the HYP board, or cross link from there to here.

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Re: Land Securities - proposed 60p per ord cash return etc

#70106

Postby PinkDalek » July 27th, 2017, 7:48 pm

mc2fool wrote:...

If, as well as being an item about a REIT, and hence of interest to those following this board, it is coincidentally also deemed to be of interest to folks running HYPs, then of course it's perfectly ok to also post it in the HYP board, or cross link from there to here.


In case you weren't aware, I had done the latter.

Genghu's point was, I think, I'd written over there "Cross post - as I don't think LandSecs are particularly HYP, although they do get a mention here every so often. ..." and directed people over here, primarily in an attempt to discuss the nature of the beast.

It was a fair enough point of his that it is also a share that can also be discussed over there. Although in this particular case the Topic was locked. ;)

In other news, The Evening Standard has repeated the sentence from the FT, verbatim (again my bold):

"LandSec said it would return £475 million to shareholders through a special dividend and share consolidation."
http://www.standard.co.uk/business/walk ... 97586.html

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Re: Land Securities - proposed 60p per ord cash return etc

#70130

Postby Gengulphus » July 27th, 2017, 8:33 pm

PinkDalek wrote:Genghu's point was, I think, I'd written over there "Cross post - as I don't think LandSecs are particularly HYP, although they do get a mention here every so often. ..." and directed people over here, primarily in an attempt to discuss the nature of the beast.

It was a fair enough point of his that it is also a share that can also be discussed over there. Although in this particular case the Topic was locked. ;)

Yes - it was rather disconcerting to see a topic that is probably going to affect HYP1 (and CHYP1) in due course locked out of the HYP Practical board! I doubt it matters all that much - my guess is that by the time the payment is about to be made, there will be a new topic anyway! - but I did feel that the point should be made that Land Securities was very arguably a HYP share.

And I should clarify that I had (and still have) no quarrel with PinkDalek's opinion of Land Securities - it's well within what I think of as the normal range of views on what is a HYP share and what isn't. It was the locking of the thread that struck me as a bit excessive.

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Re: Land Securities - proposed 60p per ord cash return etc

#70134

Postby Lootman » July 27th, 2017, 8:39 pm

Gengulphus wrote:Yes - it was rather disconcerting to see a topic that is probably going to affect HYP1 (and CHYP1) in due course locked out of the HYP Practical board!

Was it actually locked out? Or was it merely that somebody suggested that it might or should be?

I agree with you that both property companies and REIT's are valid prospects for any HY portfolio. Perhaps the concern is that, at least for REIT's, that they are a form of collective, and so if REIT's are allowed then all IT's, and then maybe all funds, have to be allowed as well.

Not an issue in this case anyway. And coincidentally, Standard and Poors have recently formally accepted "Property" as a top-level sector for their US equity indices, thereby increasing the number of those sectors from 10 to 11. As such, it would appear to be the height of churlishness to exclude property in share discussions here.

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Re: Land Securities - proposed 60p per ord cash return etc

#70138

Postby Gengulphus » July 27th, 2017, 8:54 pm

Lootman wrote:
Gengulphus wrote:Yes - it was rather disconcerting to see a topic that is probably going to affect HYP1 (and CHYP1) in due course locked out of the HYP Practical board!

Was it actually locked out? Or was it merely that somebody suggested that it might or should be?

I'd suggest taking a look at the thread on the HYP Practical board and seeing whether it is locked...

Or in other words, DYOR! ;-)

Gengulphus

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Re: Land Securities - proposed 60p per ord cash return etc

#70139

Postby Lootman » July 27th, 2017, 9:00 pm

Gengulphus wrote:
Lootman wrote:
Gengulphus wrote:Yes - it was rather disconcerting to see a topic that is probably going to affect HYP1 (and CHYP1) in due course locked out of the HYP Practical board!

Was it actually locked out? Or was it merely that somebody suggested that it might or should be?

I'd suggest taking a look at the thread on the HYP Practical board and seeing whether it is locked...

Or in other words, DYOR! ;-)

Gengulphus

Well, that's a cross-post and so it might be locked merely to ensure that no discussions happens there, which is of course the point of a cross post. Rather than censorship.

Still, good to see you complaining about moderation rather than me, if you catch my drift . . . ;)

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Re: Land Securities - proposed 60p per ord cash return etc

#70140

Postby PinkDalek » July 27th, 2017, 9:00 pm

Gengulphus wrote:Yes - it was rather disconcerting to see a topic that is probably going to affect HYP1 (and CHYP1) in due course locked out of the HYP Practical board! I doubt it matters all that much - my guess is that by the time the payment is about to be made, there will be a new topic anyway! - but I did feel that the point should be made that Land Securities was very arguably a HYP share.

And I should clarify that I had (and still have) no quarrel with PinkDalek's opinion of Land Securities - it's well within what I think of as the normal range of views on what is a HYP share and what isn't. It was the locking of the thread that struck me as a bit excessive.


My mistake - I thought it a good idea at the time but now well understand in view of HYP1 and the CHYP1 etc.

I asked for the cross post to be locked such that the discussion of the potential cash return was discussed over here. Otherwise some would be discussing it both here and there. We often get the same RNS or press versions of the same being discussed all over the place and I was hoping to keep the initial discussion in one place. On other boards I've seen people providing a cross post link, where the reader has had to go over to the other place to read the detail, then comes back to the original place and starts commenting, totally ignoring that the discussion has already commenced in the other place ...

Should I (or someone else) ask the mods to unlock over there or are you okay with leaving it as it is until more detail is known?

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Re: Land Securities - proposed 60p per ord cash return etc

#70142

Postby Gengulphus » July 27th, 2017, 9:11 pm

PinkDalek wrote:Should I (or someone else) ask the mods to unlock over there or are you okay with leaving it as it is until more detail is known?

I'm OK with leaving it as it is - it was something I found disconcerting and worth commenting on, because of the HYP1 / CHYP1 implications, but deciding on those is probably some weeks away.

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Re: Land Securities - proposed 60p per ord cash return etc

#70145

Postby Lootman » July 27th, 2017, 9:23 pm

PinkDalek wrote:I asked for the cross post to be locked such that the discussion of the potential cash return was discussed over here.

There is a reasonable argument that all cross posts should be locked, since the entire point of them is to divert the discussion elsewhere.

In this case the issue was more your underlying assumption that discussion of this share might not be allowed on a HY board. But even if it was allowed, you might still feel that the Property board is a better place to discuss it, and so cross-post and lock.

So your only "crime" (at least in the eyes of Gengulphus) was your assumption that it might be off-topic here. And I think we now all agree it is not.

Frankly, if you, me and Gengulphus all agree it's on-topic here, I'm not sure which moderator would dare to disagree.

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Re: Land Securities - proposed 60p per ord cash return etc

#70174

Postby NeilW » July 28th, 2017, 7:01 am

It's the needless share consolidations that are annoying, since it almost always involves a loss in nominee investment accounts (pensions and ISAs) due to some broker deminimis.

The cost of such consolidations must be quite substantial. Quite how they are justified in cost benefit terms I don't know.

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Re: Land Securities - proposed 60p per ord cash return etc

#70214

Postby vrdiver » July 28th, 2017, 10:52 am

NeilW wrote:It's the needless share consolidations that are annoying, since it almost always involves a loss in nominee investment accounts (pensions and ISAs) due to some broker deminimis.

The cost of such consolidations must be quite substantial. Quite how they are justified in cost benefit terms I don't know.


I've always assumed the justification has been that the pre- and post-consolidation share price graphs join up nicely. Oh, and that the board are on a bonus related to EPS.

Seriously, I really, really hate "specials with consolidation" as it is effectively a forced sale, not a dividend.

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Re: Land Securities - proposed 60p per ord cash return etc

#70237

Postby PinkDalek » July 28th, 2017, 11:49 am

Lootman wrote:
PinkDalek wrote:I asked for the cross post to be locked such that the discussion of the potential cash return was discussed over here.


There is a reasonable argument that all cross posts should be locked, since the entire point of them is to divert the discussion elsewhere.


Yes, that was the idea. I've done it once before but will think again if a similar situation arises.

In this case the issue was more your underlying assumption that discussion of this share might not be allowed on a HY board.


No, I made no such assumption, underlying or otherwise. I knew it was an HYP candidate/was held by HYPsters but felt it was not particularly high yield and didn't get discussed much over there. I wouldn't have mentioned it over there at all if I had known it wasn't HYPable.

But even if it was allowed, you might still feel that the Property board is a better place to discuss it, and so cross-post and lock.


Yes, that was the idea.

So your only "crime" (at least in the eyes of Gengulphus) was your assumption that it might be off-topic here. And I think we now all agree it is not.


Did you mean off-topic there? No-one has said Land Securities is off-topic here or there. Although this discussion itself is getting off-topic. Gengulphus hasn't implied a post on either of the boards mentioned was a "crime". His valid concern was about the locking over there.

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Re: Land Securities - proposed 60p per ord cash return etc

#70241

Postby mc2fool » July 28th, 2017, 12:09 pm

PinkDalek wrote:
mc2fool wrote:If, as well as being an item about a REIT, and hence of interest to those following this board, it is coincidentally also deemed to be of interest to folks running HYPs, then of course it's perfectly ok to also post it in the HYP board, or cross link from there to here.

In case you weren't aware, I had done the latter.

Ah...ok. Very good! Carry on as you were ... :D

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Re: Land Securities - proposed 60p per ord cash return etc

#70254

Postby UncleEbenezer » July 28th, 2017, 1:11 pm

vrdiver wrote:Seriously, I really, really hate "specials with consolidation" as it is effectively a forced sale, not a dividend.

So what do you think a company should do when they sell off a substantial asset? Squander the cash, or return it to shareholders?

The least disruptive way to preserve the value of remaining shares would be a share buyback - if enough willing sellers can be found. But that usually seems unpopular when mentioned on these boards.

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Re: Land Securities - proposed 60p per ord cash return etc

#70272

Postby vrdiver » July 28th, 2017, 2:29 pm

UncleEbenezer wrote:So what do you think a company should do when they sell off a substantial asset? Squander the cash, or return it to shareholders?

The least disruptive way to preserve the value of remaining shares would be a share buyback - if enough willing sellers can be found. But that usually seems unpopular when mentioned on these boards.


I don't disagree that if returning the cash to shareholders is the best idea the board can come up with then that's a good idea, but I expect good companies to be identifying opportunities, not shrinking the company. If a company like Land sells an asset shouldn't they be in the business of buying another asset and making a profit? that's not squandering, that's business development. If a suitable asset is not readily available I'm happy for them to build a war chest, ready for when the opportunity comes. Right now we're less than two years from a major political event called Brexit, which is going to stir up who knows what. I'd have thought that alone would be pause for thought before parting with the cash.

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Re: Land Securities - proposed 60p per ord cash return etc

#70428

Postby SKYSHIP » July 29th, 2017, 11:15 am

At a level generally thought to be near the top of the property cycle, management is to be congratulated for making a capital return to shareholders.

This is likely to be accomplished through the temporary issue of "B" shares which will then immediately be redeemed.


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