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Thread: What Are Kent Reliance Up To?

  1. #1
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    What Are Kent Reliance Up To?

    This is a genuine question, I really am unclear whether the Kent are up to saucy business or not.

    In the report and accounts I just received it says that the One Bank, which I believe can be described as the FTSE (?) listed bank through which the Mutual Society does it's business, is going to pay a dividend of 3.9p per share. In my naivity I would have thought this was a, to coin a phrase, 'mutual dividend' and would be paid, at least in part, to the owners: Account holders in the Kent Reliance. Me! (Amongst others.)

    But the actual voting paper invites me to vote to approve it as a 'donation into the community fund' (which means it is paid to charity?) or, as part of the same single vote, use it to buy more shares in One Bank. To me this sounds like two Very different things and neither appears to result in money coming to me - the actual, mutual owner.

    But I could very easily be taking rubbish. I welcome better interpretations.

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  2. #2
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    I should add I do understand, or think I understand, the Kent (and it's members) only own a portion of the One Bank hence the option to buy more shares which would then increase the proportion.

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  3. #3
    Expert planteria will become famous soon enough
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    good question. is this info in paperwork you have received this week?

  4. #4
    Expert planteria will become famous soon enough
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    i have received it myself now, and yes, i agree: two very different options. if given the choice i would have chosen 'buy more shares' rather than 'give our money away', but as we weren't given the choice, i have voted against.

  5. #5
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    Quick calculation based on the figures given on page 15 of latest members annual review seems to indicate that the mutual owns 1/322 of the listed one bank(osb) and we are also told that the society's sole investment is its holding of equity in osb. The kent reliance chairmans letter tells us that the society will receive £32,000 before tax from osb as it's share of the dividend and that based on this figure each member would be entitled to 16p before distribution costs.
    What i would like to know why any of those still interested in mutual windfalls would want to be members of a 1/322th mutual and what they could possibly get from it other than a good deal from one of its products.

  6. #6
    Expert planteria will become famous soon enough
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    interesting, and good question..are you a member?

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    OK. I've had another look at the Annual Members Review they sent out and this is what I have come up with. But I make no promises of accuracy or understanding so don't TRUST my comments:

    Firstly I hadn't noticed before the sad comment on page 14. The society apparently made just £3,000 gross profit this year (which fell to a precise ZERO profit after tax) compared to £1,020,000 last year. I don't know - is this really as bad as it seems or is it some clever business model where they manipulate things to make a low profit so as to avoid tax?

    Meanwhile shares in the OneSavings Bank. Kent owns 825,655 shares but while the Review mentions 218,638,200 shares in total I looked for a current share price and found one where the total shares in existence seem to be given as 243,080,000. So Kent either owns 0.377% or only 0.339%. Either way it is a small minority holding.

    The Review mentions a dividend of 3.9p which for the 825,655 shares gives a total of £32,200. Divided by an estimated 120,000 members (an old figure I found in a article in the Telegraph newspaper - no idea how accurate it is) and that gives 26p each.

    However, my understanding, is the Kent Reliance is a 100% mutual owned by the members which happens to have an stake (and operates through) the OneSavings Bank. That suggests to me, in theory, if the Kent entirely sold up completely the entirety of it's OneSavings Bank stake which has a current share price of 317.5p is worth £2,621,454 which, for 120,000 members (owners) would equal nearly £22! Plus there is the vague question of whether it has other assets or additional hidden value.

    I'd take it!

    1User

  8. #8
    Expert planteria will become famous soon enough
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    you'd take £22 for your membership?
    they do seem to have successfully entered several niche markets and carved out some profitable business, but yes, it is disappointing that members of the mutual have such a small share of OSB.

  9. #9
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    What are Kent relience up to

    Sorry planeteria couldn't log in to reply . Yes I am a member only because I misread or misunderstood a posting which gave the impression that members were going to receive something worthwhile from osb as individuals. This was a while ago and of course members did not receive anything from oso for KR holding the tiny fraction of Osb seems to suit Osb and only tiny dividends seem likely to go to KR and hence to individual members.Also members getting nothing but the tiny dividend share for nearly the whole of KR May have been a poster getting his facts from a newspaper.

  10. #10
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    Planteria,

    I watched plenty of societies go and pay nothing so £22 (and optimists could call that a minimum) sounds attractive enough.

    Especially in light of the issue I mentioned. Kent Reliance claims it made a trivial gross profit which dropped to exactly zero profit after tax.

    I don't know how to interpret a zero profit but at face value it would suggest Kent is a busted flush (although my personal feeling is the zero profit isn't representative of what is really going on.)

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