Marks and Spencer Group PLC (MKS)

[Breelander]

In preparation for proposed the Right Issue, M&S have just sent an email announcement to all shareholders...

Really? I don't know how they'll manage that. One of my holdings is certificated and they don't have my email address and the other is in my IWeb ISA...

Some of my MKS is certificated. I manage all my certificated holdings online, in the case of MKS by having registered with Equiniti Shareview. That's how they had my email address.
https://www.shareview.co.uk/4/Info/Port ... folio.aspx

No doubt a letter is on its way by snail-mail to the certificated shareholders for whom they don't have an email address.

[Bouleversee]

Thanks, Bree. One of the many things I should get round to but probably never will.

[idpickering]

Finals, viewtopic.php?f=15&t=17770

[idpickering]

This from TMF written by Roland Head;

The Marks & Spencer share price: what I’d do now

The Marks and Spencer Group (LSE: MKS) share price is down by 8% as I write after the retailer issued a set of results showing its turnaround is still very much a work in progress.

Investors may also be reacting to news that the £600m share issue needed to help fund its deal with online retailer Ocado has been priced at a fairly big discount. Here, I’ll explain what this means and give my view on this high street stalwart.

https://www.fool.co.uk/investing/2019/0 ... id-do-now/

[Breelander]

Results of Rights Issue

..The Company received valid acceptances in respect of 276,740,713 New Ordinary Shares, representing approximately 85.14 per cent. of the total number of New Ordinary Shares to be issued pursuant to the fully underwritten Rights Issue...

https://www.investegate.co.uk/marks---3 ... 00130400C/

Results of Rump Placing

...Underwriters, have procured subscribers for all of the 48,269,255 New Ordinary Shares for which valid acceptances were not received, representing approximately 14.86 per cent. of the New Ordinary Shares, at a price of 211 pence per New Ordinary Share...

...The net proceeds from the placing of such New Ordinary Shares (after the deduction of the Issue Price of 185 pence per New Ordinary Share and the expenses of procuring subscribers including any applicable brokerage and commissions and amounts in respect of VAT which are not recoverable) will be paid (without interest) to those persons whose rights have lapsed in accordance with the terms of the Rights Issue...

https://www.investegate.co.uk/marks---3 ... 58091056C/

[IanTHughes]

More pain for those long-suffering shareholders ....

https://www.investegate.co.uk/marks---3 ... 00033890S/

Steve Rowe, Chief Executive: "Our transformation plan is now running at a pace and scale not seen before at Marks & Spencer. For the first time we are beginning to see the potential from the far reaching changes we are making. The Food business is outperforming the market. Our deal to create a joint venture with Ocado is complete and plans to transition to the M&S range are on track.

Transformation progress
· Food business on track, with positive like-for-like sales and strong volume growth
· Acquisition of 50% of Ocado Retail completed and plans for M&S supply progressing well
· Improved sales performance in October in Clothing & Home, following a difficult first half
· Further action on UK store estate reshaping, with 17 full-line stores closed
· Cost savings of c.£75m delivered in the half
· Balance sheet strengthened, with £250m bond issue, rights issue and dividend cut

Financial performance
. Profit before tax & adjusting items down 17.1%, after weak first half Clothing & Home sales
· Profit before tax up 51.5% at £153.5m, due to lower net adjusting items in the period compared to prior year
· Food like-for-like sales growth 0.9% driven by volume. Gross margin rate slightly down, reflecting investment in trusted value
· Clothing & Home like-for-like sales down 5.5%, reflecting first half shape of buy and supply chain issues
· Free cash flow before adjusting items of £91.9m affected by timing of working capital and tax payments, partly expected to reverse in the second half
· Net debt of £4.13bn, down 3.7% largely due to cash generation over the past year
· Interim dividend of 3.9p, as previously indicated

Dividend

We have announced an interim dividend of 3.9p per ordinary share. This will be paid on 10 January 2020 to shareholders on the register of members as at close of business on 15 November 2019.

Enjoy!


Ian

[daveh]

In some senses they don't look too bad. Profit is up after exceptionals, because there are less exceptionals than usual and debt is down - so that profit looks to be real cash. The market likes it - up 5% as I write.


The dividend is down 3.9p compared to 6.8p last year - but they told us about that at the finals so its not a surprise. If you assume the dividend is split 1/3 interim 2/3 final then that suggests a full year dividend of 11.7p and a yield of just over 6% at a share this mornings share price of 191. So its still a HY share. Sits near the top of my HYPTUSS, but I won't be buying as it is a serial dissapointer on share price and dividend. Also I still can't see how companies are going to make decent money on the high street. Yes the food side is doing well, but clothing and home is down again.

[Arborbridge]

In some senses they don't look too bad. Profit is up after exceptionals, because there are less exceptionals than usual and debt is down - so that profit looks to be real cash. The market likes it - up 5% as I write.


The dividend is down 3.9p compared to 6.8p last year - but they told us about that at the finals so its not a surprise. If you assume the dividend is split 1/3 interim 2/3 final then that suggests a full year dividend of 11.7p and a yield of just over 6% at a share this mornings share price of 191. So its still a HY share. Sits near the top of my HYPTUSS, but I won't be buying as it is a serial dissapointer on share price and dividend. Also I still can't see how companies are going to make decent money on the high street. Yes the food side is doing well, but clothing and home is down again.

I wish them well - I still buy most of my clothes there. But as an shareholder I parted company with them, partly to reduce my retail holdings, but partly due to the endlessly repeating loop: "Yes the food side is doing well, but clothing and home is down again". I held for eight years, my dividends yielded well but increased at under 2% pa and the TR was -0.95%, so not a disaster but not encouraging enough to carry on with in my view.

I do hope they will prosper, and rather regret not being a shareholder as it's one of my regular haunts - maybe one day.....

Arb.

[teecee90]

I hold at an average price of 310but won’t be topping up anytime soon.

[Julian]

As good as could be hoped for I think and maybe slightly better than expected hence the market reaction.

I have a very small holding. As Daveh's analysis points out, at 6% yield still definitely in HYP yield territory but not into sky-high territory, something which adds a purely personal sense of impending doom to any of my holdings when they are at a sky-high yields.

I continue to hold since the yield is good and I do shop there regularly so the annual discount vouchers tend to put about another £30 into my pocket each year. Obviously the vouchers aren't a selection criteria but they do add about another 2% to the annual income return for me without having to distort my shopping patterns (buy stuff I wouldn't have bought anyway) to get it. That extra 2% bit of the "yield" is also tax free since it's delivered as a discount on my shopping. I've ridden the capital hit already I feel no temptation whatsoever to sell out now.

- Julian

[tjh290633]

Disposal is not justifiable, because the yield remains high. One can but hope for better thing in the future. I'm glad that I took up my rights.

TJH

[Arborbridge]

As good as could be hoped for I think and maybe slightly better than expected hence the market reaction.

I have a very small holding. As Daveh's analysis points out, at 6% yield still definitely in HYP yield territory but not into sky-high territory, something which adds a purely personal sense of impending doom to any of my holdings when they are at a sky-high yields.

I continue to hold since the yield is good and I do shop there regularly so the annual discount vouchers tend to put about another £30 into my pocket each year. Obviously the vouchers aren't a selection criteria but they do add about another 2% to the annual income return for me without having to distort my shopping patterns (buy stuff I wouldn't have bought anyway) to get it. That extra 2% bit of the "yield" is also tax free since it's delivered as a discount on my shopping. I've ridden the capital hit already I feel no temptation whatsoever to sell out now.

- Julian

You are lucky if you get discount vouchers: my broker stopped them years ago. I wonder if they get passed around their office?

Arb.

[Arborbridge]

Disposal is not justifiable, because the yield remains high. One can but hope for better thing in the future. I'm glad that I took up my rights.

TJH

Well, I decided that I'd been hoping for the tune to change for long enough, and as I mentioned, wanted to decrease my retail exposure. Purely on your method, there was no mechanical trigger to sell, but with the dividend now less than it was ten years ago, I feel justified in selling out .

The price was 312p and 279p when I sold, so for the moment the decision looks OK - however what I bought instead is the other half of the story. The capital went into Persimmon which is 14% down on purchase price, but I reckon I am still significantly up on the swap, for now.

Arb.

[PinkDalek]

You are lucky if you get discount vouchers: my broker stopped them years ago. I wonder if they get passed around their office?.

This does get mentioned from time to time but see https://corporate.marksandspencer.com/investors/shareholder-information/faq/shareholder-vouchers which includes:

I hold my shares in a nominee account and have not received any vouchers. Why is this?

Although we contact nominee companies annually to invite them to take part in the scheme, some choose not to participate and this may be the reason for you not receiving your vouchers. If you believe that your nominee company have not taken part in the scheme and would like to be sent a set of vouchers, please confirm your name, address and how you hold your shares with our Registrar on 0345 609 0810 (+44 121 415 7071 outside the UK). Vouchers will then be sent to you. (Please note vouchers cannot be replaced once the validation period has expired).

Edit: I now see you may have sold. Hopefully the extracts above will help those who haven't and don't get the vouchers.

[Arborbridge]

You are lucky if you get discount vouchers: my broker stopped them years ago. I wonder if they get passed around their office?.

This does get mentioned from time to time but see https://corporate.marksandspencer.com/investors/shareholder-information/faq/shareholder-vouchers which includes:

I hold my shares in a nominee account and have not received any vouchers. Why is this?

Although we contact nominee companies annually to invite them to take part in the scheme, some choose not to participate and this may be the reason for you not receiving your vouchers. If you believe that your nominee company have not taken part in the scheme and would like to be sent a set of vouchers, please confirm your name, address and how you hold your shares with our Registrar on 0345 609 0810 (+44 121 415 7071 outside the UK). Vouchers will then be sent to you. (Please note vouchers cannot be replaced once the validation period has expired).

Edit: I now see you may have sold. Hopefully the extracts above will help those who haven't and don't get the vouchers.

Thanks for that - I wish I had found out earlier Both my brokers stopped doing them, though they had done so on "prompting" previously. Eventually, they just refused point blank.

[Bouleversee]

I've probably asked this before but can't remember what the answer was: which is the figure which counts, the adjusted pre-tax profits (a 17.1% drop in this case) or the pre-tax statutory profit (up 52% to £153 m. and the only figure shown in the Results in Brief in The Times today)? Since the price shot up today , I assume the answer must be the latter figure, but why? I had not expected a rise, but perhaps the market was expecting even worse figures which were in the previous price. Doris is confused.

I am still sitting on a 47.53% loss for which the yield does not compensate. One might say that with the current yield it might be a buy now but I don't get the impression that anyone thinks they are going to turn things round in the foreseeable future so I am not inclined to average down. If I were going to add to my retail investments, I think I would have more faith in Wolfson and Next, where I am now back in profit with good payouts, than Rowe/Norman and M&S, although it would seem that they have at last woken up to the fact that there is more demand for some sizes than others which doesn't require genius. How much difference that will make remains to be seen.

[NeilW]

The figure that counts is the cash flow.

Cash is a matter of fact. Profit is a matter of opinion.

[daveh]

I am still sitting on a 47.53% loss for which the yield does not compensate. One might say that with the current yield it might be a buy now but I don't get the impression that anyone thinks they are going to turn things round in the foreseeable future so I am not inclined to average down. If I were going to add to my retail investments, I think I would have more faith in Wolfson and Next, where I am now back in profit with good payouts, than Rowe/Norman and M&S, although it would seem that they have at last woken up to the fact that there is more demand for some sizes than others which doesn't require genius. How much difference that will make remains to be seen.

I've held for ~11years and I'm sitting on a 1% gain, The ~£2k capital loss has been almost matched by the ~£2k dividend payments so not my best performing share.

On what figures to look at, I like to keep an eye on the direction the debt is going - I don't like to see debt increasing without a good reason (using debt to pay the dividend is not a good reason). So with debt downa little that suggests that the profit is real.

[Arborbridge]

If I were going to add to my retail investments, I think I would have more faith in Wolfson and Next, where I am now back in profit with good payouts, than Rowe/Norman and M&S, although it would seem that they have at last woken up to the fact that there is more demand for some sizes than others which doesn't require genius. How much difference that will make remains to be seen.

I've been a great supporter of Marks as a shopper - arguing in these posts in their favour. I do feel sympathy for them trying diffferent ideas to get back into the public good books, but I have my own unhappy tale for a change.

I bought some gentlemens' shirts which I thought would add to my collection of long sleeved casual shirts to wear around the place in winter. They were labelled "new improved fit". I asked what this meant and was told the were just slightly less full around the middle as people had complained about the usual cut being baggy*.
Well, I expected them to be a little tighter, and they were just about OK on that score, but what I didn't expect was that they gap at the neck and pull in at the throat. It feels as though the shirt is pulling backwards, or the yoke is put in the wrong place.
Of course, they gave me a refund, but interestingly the guy who did so wasn't at all surprised - apparently many people have returned them with complaints.

One rather wonders why they cannot find these things out at an earlier stage.

*when I hear this, the cynic in me pipes up that the real reason is to cut costs.

All in all, I do not regret selling my MKS shares as yet.

Arb.

[Arborbridge]

The figure that counts is the cash flow.

Cash is a matter of fact. Profit is a matter of opinion.

And on that basis, if these figures from Morningstar are correct, all seems OK:



Cover shown is for the five year period, but until matters improve, there isn't room for dividend increases without dropping cover a little. However, 2x cover is better than most of the companies I've looked at recently apart from WPP.

Arb.