Standard Life Capital Return

Hal17

I appreciate everyone for all the replies. I understand it a bit better now. I guess I fell into the trap that SL said they were giving me something back, assuming it would be something extra!

Where actually they just sort of sold some of my shares and gave me the money. I could have done that myself if I wanted the cash. Might go shopping tomorrow.

Apodemus

eskbanker wrote: »

But the future dividend distribution will be spread across 7/8ths of the number of shares as before, so, all things being equal (profitability, etc), individual dividends per share should be expected to rise by a factor of 8/7, i.e. the total dividend you receive should be equivalent to what you currently get....

I guess it’s all speculation, but presumably the business that was sold also contributed to the profits? The total profits would then have dropped and the ability to pay a dividend might well remain in proportion to the number of shares in circulation. Alternatively, if the portion of the company sold was loss-making, then the profits per share will have risen and the dividend prospects should be better. Hopefully the opposite is not true and they have sold off a portion that was contributing more to profits than the rest of the company, in which case dividends would be expected to fall!

Wildsound

jonathon2412 wrote: »

If they do well I'm assuming it will get better, but I will still only get a dividend on 602 shares rather than 673.

You could just buy 71 shares with the money you just received from them?

jonathon2412 wrote: »

I don't really trust them to get me a good return on my investment.

Then why on earth do you own their shares? Sell them all NOW!

londoninvestor

Hal17 wrote: »

Where actually they just sort of sold some of my shares and gave me the money. I could have done that myself if I wanted the cash..

If it was just you, then yes.

But if all shareholders want to pull out some cash rather than have it tied up on SLA's balance sheet without a good use to be made of it, selling the shares in the market wouldn't work - it would just end up with a whole new set of shareholders holding this inefficient investment.

Now if the company bought the shares from you and other shareholders, using the surplus cash to do so, that would help - and that's fairly often done. But that can result in a taxable capital gain to shareholders. Doing it the way that SLA have is tax-neutral, which will help at least some holders.