Hello - Bought some BBYB today at a total price of 109. I think the yield comes out at a bit above 5%. Am I about right please?


  • If the total price is 109 inclusive of dealing, stamp duty etc. I make it an IRR of 5.34%
  • Yes, 109 including all costs. Thank you Laughton. I came out around there and was content with that for a 15 months risk on BB. Thank you again. D
  • Of course, YTM is a lot lower @ 3.456%. But still, better than sitting doing nothing.
  • Absolutely! Not bad given the period and the risk. Thank you again.
  • I am getting a YTM of around 5.26% inc Stamp Duty and Dealing costs - can't yet see where I have gone wrong ??
  • Wozzitworth - I wish I hadn't read your post before going to bed. I woke up worrying about percentages.

    Is that a straight yield ignoring time? So, 5.26% for the remaining 1.28 years rather than an annual yield?
  • Its very confusing. My spreadsheet gives 3.46% using the MS Excel Yield function which does not make sense to me. If I use XIRR it returns 5.38% both ignoring dealing and stamp duty, I think this is the more accurate as it takes account of the precise timing of cashflows. My crude manual calculations always align more closely with the later.
  • I'm just wondering if the Excel YTM formula is taking account of the accrued interest which would have to be paid for if this was a bond and that effects the YTM value? BBYB is a pref so there is no accrued.

    The Yield Calculator on this site gives a YTM of 3.47% using a price of 109p

    I've tried doing it manually and come up with annual YTM figure lower than 3.46%.

    But I'm satisfied that the IRR is correct at more than 5% and am happy with that.

    Come on - surely there is a mathematician out there that can give us the definative way to calculate the YTM on a pref.
  • Sorry for my sonambulistic post.

    I just used the XIRR function in Open Office - but I assumed that the price I paid includes any accrued (which I think in a perfect world is correct ), and added stamp duty and dealing cost to that

    I also usually do a ball park check by working out the effective percentage annual loss due to the capital loss and subtracting this from the yield - which I think is similar to what Beekey does.

    So in this case, a capital "loss" of roughly 8% over approx 1.25 years is 5.3%.

    Running yield is 10.375% - approx YTM 5%
  • Just seen this. I could relate to both figures. I used the calculator on this site and it produced 3.45%. Thought this was a bit low so did rough calculation on a purchase of £5,000 nominal @ 109, all up cost £5,450. Interest comes to £806.25 less the capital loss of £450 gave £356.25 net over about 15 months so about £285 p.a. on £5,450 gave 5.23%. One year fixed can earn about 2% so I was happy with 3.45% for 15 months and even happier if it is 5% plus. Long while since I have done this sort of calculation but hopefully it is close enough. Think the outlook on BB for 15 months is all acceptable. Thank you Wozzit, thank you Laughton.
  • Took opportunity to pick up some more of these this morning @ 101.90p. I really hope my calculator is working properly as I make that a YTM equivalent of 9.76% (albeit only for three and a half months).

    Hopefull the markets will have become a bit more "normal" by July and it does stop me doing anyhing stupid with the cash in the meantime.

    Not a recommendation (use your own calculator) - just trying to keep the dialogue going.
  • I thought about looking into these a couple of days ago, but then forgot whilst I was watching the indices plunging - so thanks Laughton

    Yes with dealing costs I get 9.73% and have just bought some (at same price as you paid)

    Can't wait until July so I can decided what to do with all the proceeds, not

  • Yes, thank you Laughton. Very happy to add - bought 3 lots, first at 10190 but others at 101.95. Good enough. Saw BB results a few days which were good but noticed a capital reconstruction has been, understandably, deferred. Thanks again. d
  • Pref Shares £110m. Net cash position as at year end over £500m as per results on 11/03. Commentary to the effect they intend to repay. Why wouldn't they take the opportunity to redeem an high interest obligation. Group at forefront of infrastructure spend. Topped up this a.m. at prices below par.
  • Damn I topped up last week at 101.90 and 102.10-oh well still good enough. Thanks Dandigirl anyway I will go look under the sofa to see if there's any loose change to buy a few more at sub par as much better than anything else out there for such a short period.
  • don't feel too bad sussexmade, I bought some above par last week - and just look at my first post [109!]. Am happy to live with these nomatter when bought. Just maybe they will fall further. d
  • They seem to be on offer today at 98, therefore with the half yearly div of 5.375, one could have a surplus of 7.375. Am I correct? (Redemption 1st July 2020)
    The only thing which could get in the way, is this dreadful virus
  • It's unnerving, yes, let's just buy and hold our nerves here : )
  • edited March 2020
    shaunm: Didn't feel the need to do a calculation. It's three months risk or thereabouts for 6 months of (a high) interest. d
  • Dandigirl,
    I will review a possible purchase one the markets have settled down, and probably after London has been locked down, which I suspect will come very shortly
  • I found a few coppers under the sofa ( ok the Grandchildrens piggy banks ) and am ready to go again on these though a bit nervous. They will pay out in July won't they ??? !
  • Risk only what you can afford to lose, nobody can predict the future as this is going to be determined by 8 billion people making economic and everyday decisions based on their biases
  • Sussexmade, you probably have greater certainty of a small profit by shortening the FT100 by using a EFT eg XUKS -
    BBYB a bit risky when the construction industry is closing down
    1st July is far away in terms of the Covid-19 virus, April , May & June
    Looking back at Jan, Feb & March, did you foresee what's happening now?
  • As for the short term position in shorting stocks, there is a cheaper way through OTC derivatives rather than ETFs, pls remember to put a reasonable stop loss, let your profits run rather that putting a profit target and pls remember, trend is your friend, do not go against the trend under any circumstance -

    If you have enough portfolio size/professional experience, you can get professional account for low margin outlays and more account flexibility with a UK entity, or you can even go with their offshore entity like the one in Bahamas -
  • Thanks Shaunm and arjungaur. Yes after watching tonights evening news and the close downs expected in non essential building work I think I am probably already too exposed to the resulting risk. Will stick with what I have and put the pennies back in the Grankids piggy banks.
  • Liquidity Crunch can lead to bonds default and unnecessary emotional and financial pressure, if you have spare cash, you can buy some businesses of the future and there are some great bargains out there, this might be the biggest buying opportunity for the new decade
  • Current thoughts on this maturing in a timely manner please ? Thanks.
  • I notice that today they have cancelled the Annual general meeting and therefore postphoned the divi for the ords due in july. I hope this doesn 't affect the 10.75% maturity coupon. The cancellation was due to the cov 19 restrictions.
  • Liquidity:
    Balfour Beatty continues to benefit from the strong financial position which it has built up over the last five years. As at 25 March 2020, the Group had £395 million of net cash and £375 million of undrawn facilities.

    Pref Shares: £112M @ 10.75%!!

    Still of the view they will be repaid on time especially as the ord has been postponed and is subject to another review. But it's long time to the end of June.

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