Smith DS Half year results

[daveh]

Can be found here:
www.investegate.co.uk/article.aspx?id=2 ... 2589R&fe=1

The important bit:

Dividend

The Board considers the dividend to be an important component of shareholder returns. In considering dividends the Board will be mindful of the Group's leverage, earnings growth potential and future expansion plans. As first set out in December 2010, our policy is that dividends will be progressive and, in the medium term, dividend cover should be on average 2.0x to 2.5x through the cycle.

The Board declares an interim dividend for this half year of 4.6 pence per share (H1 2015/16: 4.0 pence per share). This represents an increase of 15%, demonstrating the confidence of the Board in the outlook for the Group and the considerable volatility in the sterling exchange rate in the half year. The dividend will be paid on 2 May 2017 to ordinary shareholders on the register at the close of business on 7 April 2017.

[kempiejon]

Thank you for bringing this to the board, It's been one of my trading shares as SMDS. I bought in May 2006, they cut my income in 2008, last year I think it had more than recovered, I happened to sell last March harvesting a gain, I moved the money into my ISA and probably bought Pearson and Pennon with the proceeds, the timings look about right. I have since repurchased SMDS outwith the tax shelter as they have a rising history of income and cover over 2.

[fisher]

I have held for many years. I remember them yielding around 6% ten or so years ago.

[tjh290633]

I have held for many years. I remember them yielding around 6% ten or so years ago.

I first bought in 2007 at 210p, when the yield from the next two dividends was 4.1%, being 6p and 2.6p.

I topped up in October 2008 at 81p, and I see that in December 2008 they had fallen to 48p, rising to 68p by June 2009. The final was cut to 1.8p and the interim following to 1.5p, The previous final and interim having been 6.2p and 2.6p respectively,

I trimmed back when overweight in November 2010 at 189p. I sold the rights, rather than go overweight. Since then the dividend has risen steadily from 6.5p to the current 13.4p (taking final and the following interim as the amount). I trimmed back again in July 2015 at 408p when overweight, at which stage I had recovered all my original outlay, not counting dividends paid, just on capital.

I have no complaints.

TJH

[Gengulphus]

In my case, I built my holding with various purchases between 2003 and 2008, at prices generally between 100p and 200p, and averaging about 171p - with some tinkering in 2003 (for reasons I don't recall) and 2007 (to 'trim' one of my largest HYP holdings at the time). More recently, I tinkered twice in 2015, once just before the tax year end (almost certainly for CGT reasons) and once later in the year (to 'trim' the holding again).

They're now paying about 1.5 times the dividend income I bought them on, despite having had a 50% cut in 2009, for an overall CAGR in the region of 4%, and are worth about 2.5 times what I paid for them.

If I'd sold in the first half of 2009 (the dividend was actually cut in June 2009, but might have been warned about before that), I'd have sold somewhere between about 60p and about 90p (from eyeballing a price chart), so in the region of 35-50% of what I paid for them, and the dividend was about 50% of what it had originally been. Selling immediately on a dividend cut would not have been a good idea in this case!

Gengulphus

[daveh]

First bought in 2008, but no dividend received until 2009. No cut in the amount paid to me since then, but was buying more through 2009. My average cost is 78p. Last thing I did was sell the nil paid rights in 2012 for almost as much as I paid for the shares originally. My best performing share - including divis and the rights sale the position is showing a 580% gain. An XIRR calculation shows an annual return of 35%.

I wish I'd bought more - it was one of my earlier purchases when my position size was ~1/5th of what I aim for now.

[Deev8]

I first bought DS Smith in mid-2005 at 156p. The first two dividends that I received were a 5.8p final and a 2.6p interim, for a yield of 5.4% on my purchase price. The recently paid final dividend of 8.8p plus the just-declared 4.6p interim mean the annual dividend is now 60% higher than it was back then despite the significant cut back in 2008/9.

I topped-up the shares in late 2008 and participated in the rights issue in 2012, then trimmed-back around six months later when they had become the heaviest-weighted share in my HYP. My final trade to-date was a top-up in 2014. In terms of capital value the shares are just over double my average purchase price, the internal rate of return is 21% pa.

Dave