BT this week published their 4th quarter and year end results. Within that were these pearls of wisdom – “In order to deal with the potential consequences of Covid-19, allow us to invest in FTTP and 5G, and to fund the major 5-year modernisation programme, we have also taken the difficult decision to suspend the dividend until 2022 and re-base thereafter.”
Now I know that lots of businesses are currently doing it tough but I just cannot see how BT can be worse off because of COVID-19 given we are currently in a world where the majority of communication can only be done via telephone or electronic data transfer. My view, without having any knowledge of BT, is that the COVID-19 situation is just obfuscation from the fact that the board can’t figure out how to set pricing and manage their cost base to enable investment to stay competitive and give some cash back to the owners of the business.
I also take issue with term “re-base”. It’s cut or reduce. I’ve never heard anybody say I’m going to “re-base” my grocery bill.
Fortunately, other than in my FTSE100 tracker, I don’t own BT.
RateSetter is another. When I first started investing with them they had products called 3 Year, 1 Year and Monthly. Since then they’ve moved away from that model and amongst a few new products introduced a product called “Access”.
Given the current climate it’s no secret that P2P lenders are doing it tough. I can accept that it’s so tough that lenders like me might start taking capital losses or even lose the majority of it. After all with peer-to-peer it’s always stated that “capital is at risk”.
The bit I can’t accept is the obfuscation and RateSetter have two nice examples:
- As many are now finding out “Access” is anything but accessible.
- To try and manage the difficult situation they have halved the interest everybody is receiving on their lending. I get it. Better that everybody gets all/most of their capital back rather than haircuts beginning. The bit I can’t accept is how they are still advertising the going rates at the pre-halved levels.
RateSetter was a company I’ve written about a few times and I personally still have over £50,000 with them as I felt they were one of the better ones but I’m now out. I’ve asked for some investments to be released which may or may not ever happen and the rest will be extracted as the loans fall due which should mean I’m done with RateSetter within a year. It will be interesting to see how much capital is actually returned.
My final example comes after Mrs RIT asked me what seemed like a very simple question. How much would the fees be if somebody in Country X paid me this much money via PayPal? It sounded like a really easy question until I stumbled upon the PayPal ‘Consumer Fees Menu’. I mean really a ‘Consumer Fees Menu’. In the end I couldn’t figure it out which must mean yet more obfuscation as while I’m not the sharpest knife in the drawer I’m also not the bluntest. In the end I gave up and answered with can you do it any other way as the fees are going to be significant.
Is it just me or is integrity starting to be stretched during these difficult times?
If you think it is being stretched do you have any examples of your own?
